A peculiar case involving an unearthed and detonated bomb in Exeter has now been decided on by the High Court of Justice in London, with Allianz Insurance Plc emerging victorious following a judgment that is considered likely to be contested.
The proceedings centred on the insurance claim lodged by the University of Exeter over the damage and business interruption it suffered in 2021 from a bomb detonation at a construction site adjacent to its campus.
“In summary,” noted Judge Bird, “in 1942 a bomb was dropped by hostile German forces in Exeter. The bomb did not explode but lay undiscovered until 2021 when it was unearthed during building works. Bomb disposal experts were called in. They determined that the bomb should be exploded and that it could not safely be transported away. The damage was caused when the bomb exploded as the result of a controlled detonation.”
Allianz had declined the claim, arguing that it fell within the scope of the policy’s war exclusion clause.
In his ruling, Judge Bird said: “The common sense analysis is this: the loss was caused by an explosion. The explosion was triggered by the reasonable (and indeed obviously correct) decision to detonate the bomb. That decision was necessitated by the presence of the bomb.
“If there had been no bomb, there would have been no explosion. The bomb provided both the explosive payload and the absolute need for the detonation. In my view, the dropping of the bomb was the obvious proximate cause of the damage.”
The judge also asserted that the passage of time had no impact on the danger posed by the bomb, which contained between 520kg and 630kg of high explosive.
He stated: “If the bomb had exploded when it landed (and if the damaged buildings had been there), the conclusion that the bomb was the proximate cause of the damage would have been inevitable. Does the reasonable and necessary human act of detonating the bomb change that analysis? In my view, it does not.
“It is the presence of the bomb that leads to both the need for the detonation and the inevitability of the damage. As a matter of common sense, the dropping of the bomb and its consequent presence at the site, was the proximate cause of the damage.”
Among those who have reacted to the judgment is Signature Litigation partner Hermes Marangos.
“The Court ruled that the dropping of the bomb and not its later detonation was the proximate cause of the loss or at least ‘a’ proximate cause of the loss,” wrote Marangos on LinkedIn. “The dropping of the bomb, the judge ruled, was an act of war and so fell within the exclusion.
“In circumstances where the Court acknowledged the procedure followed by the insurer to be unusual, to say the least, there was no detailed reference to the fact that the elapse of some 80 years between the bomb being dropped and then once degraded and corroded being detonated, placed it in an entirely separate category very well understood by the industry, of ‘derelict weapon’ for which the war exclusion clause should have no application.”
He went on to point out that there was also no analysis of the architecture of the exclusion and how causation operates within the clause’s context.
“In essence,” said Marangos, “to a reasonable observer the judge simply applied a ‘but for’ test. In the circumstances, one expects that the judgment is likely to be appealed and a different analytical approach taken, given the importance of this issue to a world-renowned insurance industry. If left to stand, the present ruling will sit as an anomaly in the interpretation of war risks exclusions.”
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