Murphy v Swinbank

The case of Murphy v Swinbank involved a dispute between the Murphys, who were the solicitors for the Estate Mortgage Trusts, and Swinbank, the professional indemnity insurer. The collapse of the Estate Mortgage Trusts led to claims against the Murphys for their role in the preparation of the loan and security documents. Swinbank sought to disclaim liability under the insurance policies on several grounds, including exclusions for dishonest acts or omissions and known claims circumstances. The Murphys argued that the conduct of the solicitors did not amount to dishonest conduct and that the exclusions did not apply.

The court had to determine whether the Murphys' conduct amounted to dishonest acts or omissions under the insurance policies, whether the known claims circumstances exclusion applied, and the proper construction of the exclusion in the context of the individual contracts of insurance. The court also had to consider whether the conduct of the solicitors breached their fiduciary obligations and if this amounted to dishonest conduct under the policies. Additionally, the court needed to decide whether the known claims circumstances exclusion required that the claims circumstances must be known to each and every one of the separately or severally insured.

The court found that the Murphys' conduct did not amount to dishonest conduct within the meaning of the insurance policies. The court held that the known claims circumstances exclusion did not apply because it was not necessary for the claims circumstances to be known to each and every one of the separately or severally insured. The court also determined that the proper construction of the exclusion required that the claims circumstances must be known to at least one of the insured parties. Furthermore, the court held that separate and distinct causes of action leading to separate and distinct heads of loss or damage could give rise to two claims under the policies.

The court ordered that Swinbank was liable to indemnify the Murphys for the claims brought against them in relation to the Estate Mortgage Trusts. The court also found that the known claims circumstances exclusion did not apply, and the insurers were not entitled to disclaim liability under the insurance policies.