An insurer must pay out a disputed claim for a fire at a waste company, the High Court has ruled.
The 2014 fire hit Wheeldon Brothers, a waste processing plant in Ramsbottom, near Manchester. It was insured against fire risk by Millennium Insurance, which declined to pay out, citing various breaches by Wheeldon of its policy during the processes by which materials were sorted for use as solid recovered fuel.
Millennium claimed these breaches included storage of gas cylinders, combustible materials and baled materials in ways that breached the policy.
Jonathan Acton Davis QC, sitting as a deputy High Court judge, held that, on the facts of the case, Millennium was liable.
A separate hearing will be held to determine how much it must pay to Wheeldon, which had claimed £1.5m. An earlier stage of the case had settled a dispute about the involvement of an expert witness.
Law firm Clyde & Co said in a commentary that the decision turned on both its specific facts and wording in the policy. It said the policy required Wheeldon to store materials more than 6m from fixed plant and machinery.
The judge said this did not mean the policy was invalid if such materials happened to be placed nearer because the term ‘storage’ meant “a degree of permanence and a deliberate decision to designate an area to place and keep material”.
He also said that ‘combustible’ meant those materials an ordinary person would consider fell under this heading.
“If the underwriters had intended ‘combustible’ to have a meaning other than that understood by a layperson interpreting the policy, it was for underwriters to make that express in the policy,” the judge said.
“I find that ‘combustible’ as used in the policy is the meaning which would be understood by a layperson. To take the example given by the experts, a layperson would not consider diamonds and metals to be ‘combustible’.”