DOUBLE INSURANCE,

CONTRIBUTION &
SUBROGATION
Dr Nurjaanah Chew Li Hua
 DOUBLE INSURANCE

Same insured
Same risk
Same interest on the property insured
Two or more policies
 Section 32 MIA 1906
Where two or more policies are effected by
or on behalf of the assured on the same
adventure and interest or any part thereof,
and the sums insured exceed the
indemnity allowed by this Act, the assured
is said to be over-insured by double
insurance.
 Section 32 MIA 1906

… The assured, unless the policy

otherwise provides, may claim
payment from the insurers in such
order as he may think fit, provided
that he is not entitled to receive
any sum in excess of the indemnity
allowed by this Act;

chewlihua
 Section 32 MIA 1906

… Where the assured receives any

sum in excess of the indemnity
allowed by this Act, he is deemed
to hold such sum in trust for the
insurers, according to their right of
contribution among themselves.

chewlihua
CONTRIBUTION

Double insurance
To call on another insurer to
bear his share of loss and pay his
proportion of the amount
already paid under the first
policy
 CONTRIBUTION

 Equity
 Terms of contract – may restrict or
exclude the right of contribution
 Indemnity

chewlihua
Section 80, MIA1906
Right of contribution
 (1) Where the assured is over-insured by double
insurance, each insurer is bound, as between
himself and the other insurers, to contribute
rateably to the loss in proportion to the amount
for which he is liable under his contract.

 (2) If any insurer pays more than his proportion

of the loss, he is entitled to maintain an action
for contribution against the other insurers, and is
entitled to the like remedies as a surety who
has paid more than his proportion of the debt.
 SUBROGATION

Indemnity
Equitable doctrine – solely for
the purpose of preventing the
insured from recovering more
than the a full indemnity by
placing the insurers in the
position of the insured.
chewlihua
 SUBROGATION
 Two rights enforceable by
insurer under subrogation:
 To claim any other benefits
received by insured that
compensates against the loss
 To take action against third parties
in the name of the insured
chewlihua
Right of subrogation – c.o.a rests with
insured

In exercising the right of subrogation

Insurer sues TP resp in d name of insured OR

Take an assignment of the insured’s c.o.a.

 Limitation of the doctrine of
subrogation
Express term in the policy
contract
Express agreement to oust the
application of the doctrine
Excess clause
Exclusion clause

chewlihua
 Cases

 Castellian v. Preston
 Page v. Scottish Insurance Corp
 Scottish Union & National Insurance Co. v
Davis
 Lord Napier & Ettrick v. Hunter
 Lin Lin Shipping Sdn Bhd v. Govindasamy
Mahalingam
 Darrel v. Tibbitts
 Burnand v. Rodocanachi
 Teo Kim Kien & Ors v. Lai Sen & Anor

chewlihua
Castellian v. Preston

Brett LJ – the doctrine of

subrogation extends to the
underwriter being entitled to
the advantage of every right
of the insured, whether in
contract or in remedy for tort
or in any other right, legal or
equitable.
Darrel v. Tibbitts

 CA – An insurer who indemnified the

insured for an insured loss was entitled
to every benefit recovered by the
insured from a TP
 Darrel v. Tibbitts

Lease
– obli
to House
repair

Street repairs – damaged Insured – Hse

gas pipeline – explosion. fire & gas
explosion
sold 2
Corporation of Brighton
D
Lessee
compen-
sated by
Insurer pd D (policy
CB - assigned)- subrogation
repair
Lord Napier & Ettrick v. Hunter

HOL – an insurer’s right of

subrogation gave the insurer a
proprietary interest in the
proceeds of a settlement
concluded between the insured
and a TP
Teo Kim Kien & Ors v. Lai Sen & Anor
[1980] 2 MLJ 125
 FC – an insurer exercising his right of subrogation
could require an insured to sue the tortfeasor
responsible for causing the insured’s loss or injury.

 Chang Min Tat FCJ:

… under the doctrine of subrogation, the insured
must bring an action against the wrong-doer if he is
called upon by the insurer to do so and is indemnified
against the costs, but it is his own cause of action, not
that of the insurer that he sues on. Against the wrong-
doer, the insurer has no cause of action on his own.
When does the right of subrogation
arises?

Injury/loss

CLAIM
- PAID

SUBROGATION
Page v. Scottish Insurance Corp

 CA – Insurer has NO right of

subrogation b4 they FULLY indemnify
the insured.

 Scrutton LJ:
…the right to be subrogated to the
rights of the assured does not pass to
the underwriter until he has satisfied
ALL the claims under the policy in
respect of the particular subject-
matter…
Scottish Union & National Insurance Co. v
Davis
 CA – an insurer has no right of subrogation if he
has not fully indemnified the insured.
 Bentley – 3x repairs

 Russel LJ:
You have a right to subrogation in a case like
this when you have indemnified the assured,
and one thing that is quite plain is that they
have never done that. The repairs, incidentally,
have never been done…