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Palmer v Palmer and PZ Products Ltd

[2008] EWCA Civ 46


The Court awarded costs directly against the limited liability insurer.  Liability was founded on the insurer's failure to recognise or inquire into whether its insured had any real commercial interest in continuing to contest liability, even where the insured had also failed to address that question.  Where a deal would secure the insured's financial future, but losing a trial would lead to the insured's inevitable closure, winning or settlement were equally in the insured's interest and, inferentially, further support for a defence with any real risk would only benefit the insurer.