Steven Antony Elliott v The Members of Lloyds Syndicate 4444 as Constituted for the 2017 Underwriting Year of Account Acting Through their Managing Agent Canopius Management Agents Limited
| Judge | Adrian Williamson KC, sitting as a Deputy Judge of the High Court |
| Hearing | 8 to 11, 15 and 17 June 2026 |
| Judgment | 15 July 2026 |
| Court | Technology and Construction Court, King's Bench Division, Business and Property Courts of England and Wales |
| Jurisdiction | England & Wales |
| Claimant | Steven Antony Elliott |
| Defendant | The Members of Lloyds Syndicate 4444 for the 2017 Underwriting Year of Account, acting through their Managing Agent |
| Case reference | HT-2024-000249 |
Summary
A buildings policy ran from 9 August 2017 to 8 August 2018 over a Grade II listed house near Bedford. On 24 July 2018 the owner notified a subsidence claim, described then as a crack to the garage. The insurer never paid.
Two answers each disposed of the claim on their own. No subsidence damage occurred during the policy period. And the owner committed fraud: he created a builder's quotation dressing up ordinary garage conversion work as structural underpinning, then used it to ask for an interim payment.
An insured who fraudulently exaggerates a claim recovers nothing, including the honest part. The rebuild cost, double insurance and damages findings were reached only in the alternative.
Background and facts
The main part of the house dates from about 1750, with a Victorian wing and a garage block added later. The owner claimed subsidence from a previous insurer in August 2011 and settled in January 2015 for about £200,000. Underpinning followed. He then sued the contractor who did that work, settling for £50,000 and £150,000 in 2020 and 2021.
The movement history predated the policy. In April 2016 the owner told his monitoring surveyors that a five foot vertical crack had appeared in the garage wall. Suing the contractor in 2020, he alleged on a statement of truth that both extensions had moved in early 2015 and remained unrepaired.
The policy in issue was bought online in August 2017, with buildings cover of £1,000,000. It insured subsidence and heave as separately defined perils, and excluded loss arising from defective design, defective materials or faulty workmanship.
The issue
The parties agreed a list of nine issues. Two decided the case: whether subsidence damage occurred during the policy period, and whether the owner committed fraud.
The insurer said the claim had been dishonestly exaggerated, relying on the fraud condition in the policy and on section 12 of the Insurance Act 2015. The owner said an email of 20 June 2019 from the insurer's agents, saying there were no underwriting issues and liability was accepted, was a pre-action admission under CPR 14.1 never withdrawn.
The decision
The engineering experts agreed in their joint statement that there was no evidence of ground movement causing subsidence damage to the main building during the policy period. The only objective measurements covered the garage block, where levels at three monitoring points moved by a few millimetres between April 2015 and August 2017. The judge accepted the insurer's expert that this was minimal and was not subsidence damage. Damage beginning before inception was not insured in any event.
The fraud turned on two documents. A quotation dated 1 November 2021 priced converting the garages into habitable space at £18,750 plus VAT, and said nothing about subsidence, cracks or underpinning. A second quotation, dated 11 November 2021 and in the same sum, added jacks and wall supports, excavating trenches to a structural engineer's report, and concrete to underpin with anchors. The builder had no part in producing it. The owner sent it to the loss adjuster.
In closing, counsel for the owner argued that the part of the claim resting on the false quotation could be cut away and the balance recovered. That would leave insurers to sort the good parts from the dishonest, with no penalty for the dishonesty. The judge held it was not the law.
There was one claim, made in July 2018. The November 2021 emails sought an interim payment on account of it.
This is a classic case, in my judgment, of an insured, who, if found fraudulently to have exaggerated his claim, recovers nothing; he does not recover the unexaggerated part.Adrian Williamson KC, paragraph 65
The pre-action admission argument failed on the words of the email. All the insurer had admitted was that it would not avoid the policy.
The email did not admit the existence or cause of any damage within the Policy Period, still less the extent of any claim.Adrian Williamson KC, paragraph 72
The judge recorded that the remaining issues were academic, the claim having failed on the subsidence and fraud answers. Had liability been established he would have awarded nominal damages only. The repair quotation covered a far wider scope of underpinning than the garage block, and the owner's expert tried to isolate the garage element in the witness box.
This is not a case where the court should do the best that it could: there are simply too many imponderables to arrive at any satisfactory assessment of damages.Adrian Williamson KC, paragraph 81
The claim was dismissed.
Practical implications
A document created to support a claim is part of the claim. The altered quotation went to an interim payment request, not to the pleaded loss, and it still destroyed everything. Anyone assembling a payment application or a loss and expense submission is handling material on which the entitlement can turn.
An acknowledgement that there is no coverage point is not an admission of the loss. The owner read the words liability is accepted as conceding that damage had happened, that subsidence caused it, and that it fell inside the period. The judge read them as answering a narrower question: whether the insurer would avoid the policy.
Quantum failed for a reason unconnected with the dishonesty. Nobody linked a scope of remedial work to the damage found and to the period it occurred in. A court prepared to find liability will still refuse to pick a figure when that analysis is missing.
Practice points
- Read what a supporting document says before it leaves your office. A second quotation in the same sum as the first, carrying work the tradesman has never performed, is the easiest kind of forgery to detect and the hardest to explain afterwards.
- Where damage predates the cover, deal with it openly and claim only the part that does not. Monitoring readings, earlier pleadings and earlier settlements are all disclosable, and here every one of them put the movement before inception.
- Claim the peril the policy names. This claim was pleaded as subsidence, so an argument that the Victorian wing had suffered heave led nowhere, and the exclusion for defective design and workmanship would have answered it anyway.
- Tie remedial cost to the damage found and to the period it occurred in. A quotation covering the whole building will not support a claim confined to one extension, and an expert costing the difference from the witness box gives the court nothing it can use.
- A witness whose evidence is rejected takes the inferences down with him. The judge held that nothing the owner said could be accepted without unequivocal documentary support, which left every inference he invited the court to draw with nothing underneath it.