Gable Insurance AG wanted more of a director's near-£5 million debt classed as fraud. On July 3, 2026, the Court of Appeal said no.
The ruling settled a narrow but costly question for the collapsed insurer: how much of what its chief executive and director owed counted as dishonesty - and so how much would survive his bankruptcy.
Gable Insurance AG (GIAG) was a Liechtenstein insurance underwriter, regulated by the Liechtenstein Financial Market Authority and owned by an AIM-listed Cayman Islands parent. The group's chief executive was also a director of the insurer and the largest individual shareholder in its parent, with about 20% of the shares. The court found he had effective day-to-day control of the insurer.
A company he owned outright, Hogarth Underwriting Agency Limited, handled GIAG's underwriting and claims. It also ran trust accounts holding GIAG's own money - accounts that, the court said, "were to be used only to receive premiums and pay claims, commissions and other insurance-related costs." Asked about the company at trial, he said, "Hogarth is me."
Hogarth's debt to GIAG grew steadily, reaching £3,239,721 by June 30, 2016. The group's books called it a "balance outstanding" rather than a loan. Behind the scenes, the insurer was failing: actuaries put its provision for insurance liabilities £15.2 million below the best estimate of those liabilities, and by late 2016 the regulator had barred payments to associated companies, brought in PwC as administrator and opened insolvency proceedings.
The trial judge found the director liable for breaching his duties under Liechtenstein law, to the tune of £4,957,788.52 - covering the Hogarth debt, later diversions of insurer money and payments made despite a regulatory freeze.
Then came the twist. He had been made bankrupt shortly before trial, and under section 281(3) of the Insolvency Act 1986 bankruptcy does not wipe out a debt tied to "any fraud or fraudulent breach of trust." So the estate's real recovery hinged on how much of the judgment a court would call dishonest.
The trial judge held the director dishonest over money taken from the trust accounts, over the diversions and over payments that breached the regulator's order - but not over the wider "excessive payments" behind the Hogarth debt that did not come from the trust accounts. Of the total, the court recorded that £3,247,977.52 was "with respect to a fraud or fraudulent breach of trust on his part, of which £1,530,000 is with respect to dishonest misappropriation from the Hogarth Trust Accounts." That left £1,709,721 outside the dishonesty finding.
GIAG appealed, arguing there was no sensible reason to treat the remaining payments differently. The Court of Appeal rejected that. It held that the trial judge had applied the right test and reached a conclusion he was entitled to reach: the judge had found the director believed the payments were authorised and disclosed to the auditor, expected the debt to be repaid, and had guaranteed it. Trust-account money, the court added, could fairly be treated differently because it broke an express trust. The appeal was dismissed.
The lesson for insurers is about what happens after judgment. When a former director is bankrupt, the label on the debt decides what the estate can collect - and a finding of dishonesty on some counts will not automatically carry across to the rest.
