Prejudice not dependent on delay

Shinedean employed Alldown Demolition (London) to carry out excavation works. Alldown's work caused the partial collapse of a wall on a neighbouring property. Alldown notified its public liability insurers. The neighbours sued Shinedean, which sought a contribution from Alldown. Alldown became insolvent and Shinedean sought to recover against Alldown's insurers, Axa Insurance UK, under the Third Parties (Rights against Insurers) Act 1930.

Axa refused cover. Alldown's all-risks policy contained a condition precedent requiring Alldown to provide all necessary information to Axa. The clause did not contain an express time limit for doing so and so the trial judge held that the insured was impliedly required to comply within a reasonable time.

However, Alldown failed to provide the information for more than two and a half years; therefore, Axa refused to indemnify, even though it could only show (to use the trial judge's word) "miniscule" prejudice.

The trial judge held that the fact the prejudice was miniscule should be taken into account in deciding whether the information had been provided within a reasonable time.

However, the Court of Appeal held that whether information had been provided within a reasonable time was a question of fact in each case and was not necessarily dependent on whether prejudice had been suffered. In this case the information had not been provided within a reasonable time.