The questions that an insurer asks prospective insureds on an application for insurance, and the answers given in response, can have important ramifications on the parties’ rights and obligations going forward. The proper interpretation of those questions can often prove crucial in determining whether the insured has complied with their obligation to disclose material facts and give a fair presentation of risk. The consequences of any misrepresentation or material non-disclosure can be significant, including denial of coverage by the insurer.

The Supreme Court has handed down its decision in Bresco Electrical Services Ltd v Michael J Lonsdale [2020] UKSC 25. It has returned the law to where it was before the first instance judgment and has made a firm statement that there is jurisdiction for insolvent construction companies to refer a dispute to adjudication. In the unanimous decision of the Court, Lord Briggs concluded that the operation of insolvency set off and the adjudication of construction disputes are not only compatible, but they are to be encouraged.

The case of Bresco Electrical Services Ltd v Michael J Lonsdale (Electrical) Ltd (Bresco) saw the TCC and the Court of Appeal agree that insolvent referring parties should not reap the rewards of adjudication. In fact, the TCC said that a referring party facing an adjudication brought by an insolvent party could even get an injunction to restrain that referral.