Of Proprietary Restitution, Insurers' Subrogation and Insolvency Set-Off - The Untenable Case of Re Ballast

19 Pages Posted: 17 Sep 2007

Date Written: September 13, 2007

Abstract

The court in Re Ballast [2006] EWHC 3189 (Ch) rejected the proposition that an insurer via subrogation has a proprietary interest in the insured's cause of action, but its reasoning is strewn with confusion and fails to appreciate the impact of insolvency set-off on the principle of indemnity.

All the reasons the court gave in Re Ballast for rejecting proprietary subrogation are in fact compatible with proprietary subrogation.

Academic criticisms against proprietary subrogation failed to pay sufficient regard to the principle of indemnity.

Lord Templeman's preference in Napier v Hunter [1993] AC 713 for proprietary subrogation is correct and is consistent with plenty of North American case-law.

Keywords: subrogation, set-off, principle of indemnity, liquidation, insolvency, unjust enrichment

JEL Classification: K10, K11, K12, K13, K19, K30, K39

Suggested Citation

Ho, Look Chan, Of Proprietary Restitution, Insurers' Subrogation and Insolvency Set-Off - The Untenable Case of Re Ballast (September 13, 2007). Available at SSRN: https://ssrn.com/abstract=1014451 or http://dx.doi.org/10.2139/ssrn.1014451

Look Chan Ho (Contact Author)

Des Voeux Chambers ( email )

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