A seemingly straightforward client instruction to secure “like for like” insurance coverage has escalated into a high-stakes legal battle, as Tysers Insurance Brokers Limited now faces a negligence claim of nearly £2.74 million set to proceed to a full High Court trial. The case, brought by Henderson & Jones Limited, scrutinizes the fundamental responsibilities of a broker and highlights the costly consequences of alleged discrepancies between old and new policies. A judge’s recent refusal to dismiss the lawsuit has sent a clear signal that the broker has significant questions to answer regarding its professional duty.
When is Like for Like Not Alike The £2.7 Million Question at the Heart of an Insurance Dispute
At the center of this complex legal dispute lies a simple, yet profoundly ambiguous, industry term. The lawsuit pivots on the interpretation of a “like for like” replacement, questioning whether the policy Tysers arranged truly mirrored the coverage its client previously held. This very question is what a High Court judge determined is worthy of a full trial, dismissing the broker’s attempt at an early summary judgment.
The claim was initiated by Henderson & Jones, a company that specializes in acquiring and pursuing legal claims from insolvent entities, in this case, the original property owners. The court’s decision to allow the case, originally filed in late 2023, to move forward ensures that the broker’s actions and the precise meaning of its mandate will be rigorously examined in a public forum, with potential ramifications for the entire brokerage industry.
From New Year’s Fire to Courtroom Clash The Genesis of the Claim
The chain of events leading to the courtroom began with a catastrophic fire at Liverpool’s Echo Arena on New Year’s Eve in 2017. While the blaze itself was contained, the emergency response had severe collateral effects. Firefighters utilized two adjacent apartment blocks as a staging ground, which resulted in extensive water and structural damage to dozens of serviced apartments within the buildings.
This unforeseen damage rendered the apartments uninhabitable for a prolonged period, causing a significant loss of rental income for the property owners. When they turned to their insurer, NIG, for compensation, they were met with a settlement of just £150,000 for lost rent. This figure was a fraction of the £2.6 million indemnity limit stated in the policy, a discrepancy that prompted an investigation into the terms of the coverage and the role of their broker, Tysers, in arranging it.
Unpacking the Alleged Negligence A Tale of Two Policies
The core of the negligence allegation traces back to a 2016 directive from the property owners to Tysers. The instruction was explicit: secure a replacement for their existing insurance policy on a “like for like basis.” This established a clear benchmark against which the broker’s performance would later be measured and formed the basis of the duty of care owed to the client.
The critical discrepancy emerged when comparing the prior policy, underwritten by Travelers Insurance Company, with the new one arranged by Tysers through NIG. Henderson & Jones argues the Travelers policy offered an open-ended indemnity period for rental income losses, providing coverage for as long as was necessary to restore the property. In stark contrast, the Tysers-arranged NIG policy contained a crucial limitation, capping the indemnity period for such losses at just 36 months. This difference is the entire foundation of the claim. The claimant calculated the £2.74 million damages figure by projecting the rental income losses over a potential 69-month recovery period, an interval they argue would have been covered had the original, more favorable terms been replicated.
The Broker’s Defense and the Judge’s Decisive Rejection
In its bid to have the case dismissed, Tysers mounted a two-pronged legal defense. First, it argued that the assignment of the claim to Henderson & Jones was champertous—an unlawful arrangement to fund litigation in exchange for a share of the proceeds—and therefore void as a matter of public policy. Second, the broker relied on a limitation clause within its Client Service Agreement, which purported to exclude liability for “loss of revenue” and other “indirect or consequential loss.”
However, His Honour Judge Bird firmly rejected these arguments for a strike-out. He ruled that Henderson & Jones possessed a legitimate commercial interest in pursuing the claim, nullifying the assertion of champerty. More significantly, the judge addressed the limitation clause, stating it is “at the very least strongly arguable” that the lost rental income was a direct and primary consequence of the alleged negligence, not a secondary or consequential loss. This judicial opinion critically weakened Tysers’ defense, paving the way for the case to be heard on its full merits.
Lessons for the Brokerage Industry The High Cost of Ambiguity
This ongoing legal battle serves as a stark reminder to the insurance brokerage industry of the inherent dangers lurking within vague client instructions. The term “like for like” is a common shorthand, but this case demonstrates that without meticulous comparison and explicit, documented communication of any material differences in coverage, brokers expose themselves to immense liability.
The court’s narrow interpretation of the broker’s limitation clause also provides a crucial lesson. The distinction between a direct loss and a consequential loss can become a multi-million-pound question, and firms cannot assume that boilerplate exclusion clauses will offer blanket protection against negligence claims. This case underscored the need for brokers to conduct detailed policy comparisons, clearly present any changes to clients—especially reductions in coverage or indemnity periods—and meticulously document these communications to mitigate future risk. The outcome of this trial was poised to set a significant precedent for professional standards and liability across the sector.
