“With 5-6m of cover I would estimate settlement to be 2-4mm based on the calculations for the Colwick crossing which is less than the 5mm requirement.”
“5.8 The positioning of UTX beneath level crossings is strongly discouraged due to the problems of installing an effective monitoring system and the disruption to road and rail services should corrective action (packing of track) be required. This could be a very expensive operation as it would require rail and road closures and the removal of the crossing surface… 5.12 The maximum allowable calculated settlement/heave is 5mm. Certain exceptional circumstances will allow for slightly higher values i.e. line speed, track category etc. For large diameter or shall UTXs the design calculations shall also indicate the projected lateral movement of the track due to the UTX installation. On large diameter UTXs pipe ovalisation might also need to be considered within settlement calculations…”
“The Subcontractor shall indemnify the Contractor against any liability or loss, that shall be incurred or imposed upon the Contractor under the Main Contract or any person or Company claiming under or through the Main Contract by reason of any act, neglect or default of the Subcontractor in the performance of the Subcontract Works.”; c) by clause 14: “The Subcontractor hereby acknowledges that any breach by the Subcontractor of the Subcontract may result in the Contractor committing breaches of and becoming liable in damages under the Main Contract and the Contractor may occasion further loss and/or expense in connection with the Main Contractor resulting from such breach and all such damage loss and expense are hereby agreed to be within the contemplation of the parties as being probable results of any such breach by the Subcontractor.”; d) by clause 29 : “The Subcontractor shall have the same design liability as the Contractor has under the Main Contract for any defects in the Subcontractor’s design for which design the Subcontractor is responsible”
“Please find attached surface settlement assessment Liam has asked for (no job title I’m afraid). Cover 5.7m in wet sands/gravel 1220mm OD jacking pipe 5mm overbreak and 2% face loss. The attached assessment is based on these input parameters. This give[s] a settlement of roughly 10mm. Liam has also asked for 10mm overbreak and for this, surface settlement would increase to about 15mm.”
“By 31st July, the maximum road and rail settlements had increased to 22.7mm and 11mm respectively”
“Network Rail, Morgan Sindall Utilities and Bridgeway Consulting met on 1 August to discuss the increasing rail settlement and how to rectify it. Network Rail stated that the track would need to be packed with ballast up to its normal level.”
“Please see attached photographs. This is an area that STW [i.e. Severn Trent Water] excavated prior to the tunnelling starting to determine the depth of the sewer. The result of which returned a depth to top of 1.7m; and depth to bottom of 2.9m. Any thoughts on cause of void, from a tunnelling perspective? I await response from STW. ”
“Between 1 and 27 August the maximum settlement of the track varied from day to day but remained between 13 and 23mm. However, the road settlement increased during this period to between 14 and 19mm. The centre line of the road [i.e. the ground immediately above the micro-tunnel] continued to show the greatest amount of settlement.”
“Risk Name – F and B Trenchless Solutions Limited… Trade : Tunnelling Contractor and Civil Engineering Trading since 2008 FORECASTED FIGURES 2013-2014 Heat welding on site 5% Steel fixing 1% 15 metre height limit max Depth limited – unlimited – av depth limits 10 to 15 metres Domestic works 33% Commercial 34% Ind/Agriculture 33% Rail works – av 4 times per year max – no lines active, controlled by Network Rail, working on rail for drainage and cables, no installation of train lines … Airport works – 1 job in last 4 years – Drainage, runway not active PL£10m EL£10m …”
“The Insurers will indemnify the Insured and any Additional Insured:1. Against legal liability and for damages and claimant’s costs and expenses in respect of: … B. Damage to Property; C. Nuisance; happening during the Period of Insurance within the Territorial Limits in connection with the Business. 2. In respect of Legal Costs incurred with the written consent of the Insurers in connection with any Event which is or may be the subject of indemnity under section 1 above.”
“...As a condition precedent to liability, the Insured shall notify the Insurers…immediately the Insured is aware of any occurrence or circumstances which may give rise to a claim…”
“The immediate cause of the derailment was a severe dip in the track which developed rapidly under the leading portion of the train. After the derailment, severe dips of about 100mm were found in both rails of the affected line, where the rails had deformed over a large void in the ground which had left the track unsupported over a length of about 3 metres. The void under the railway and other voids found under the adjacent road surface were caused by excessive ground loss during the recent construction of a micro-tunnel along the road centre line. The RAIB investigation has interpreted the available evidence in order to identify the most likely cause of the voids. Although some alternative explanations cannot be completely discounted, the RAIB considers that the most likely explanation for the ground loss is that it was as a result of over-mining of the ground during the construction work.”
“The positioning of the voids above the path of the micro-tunnel … is the strongest indication that the voids had been caused by over-mining of the ground during the tunnelling activity. Most of the voids along the road and across the railway between the launch and reception shafts had migrated from the depth of the tunnel to a level just below ground level. Normally such voids would be expected to break through the surface soon after the tunnelling had been completed but the road and its foundations effectively bridged the voids, except for one hole which appeared in the road on 8 August … The deep voids found below the railway and each of the twin siphons do not appear to have risen higher because they were bridged by those structures.”
“We had a call this morning to say that the rails had settled 8” (200mm) whilst a freight train had been going through the level crossing. Our Managing Director Liam Burke attended site and Network Rail organised excavations under the rails and found large voids (about the size of 2 cars).”
“There has been lots of investigation on site on Monday and Tuesday with probably 50 – 100 people from different organisations. These investigations are continuing today and both our Managing Director and Operations Manager are locked in to these investigations.”
“...Everything has been verbal no formal notification. History of events. Micro tunnel breaks through on 8th July. Liam Burke (Managing Director) visits site on 9th July and is advised by Danny Kelly of Morgan Sindall that there has been some settlement of the tracks around 11-12mm but this was not cause for concern at the moment. Settlement can and does occur and is permitted by [NR] within acceptable ranges. On 17th July the undersigned visited Tom Anderson of [MS] at their offices to discuss the final account and was told that Morgans were concerned about the settlement which was now at 15-18mm as if this got any worse then speed restrictions may have to be imposed by [NR]. On the 8th August we received an email from Danny Kelly advising that one of the trial holes in the road (excavated and reinstated by others prior to our works) some distance from the railway had developed a void. Liam Burke visited and viewed this void on 13th August and stated that he did not think this was our problem. On 21st August Liam Burke, Paul Willis and the undersigned visited the site and met with Tom Anderson and Keith Gregory (Morgans’ Operations Manager) to further review the void. During discussions Mr Gregory raised the settlement issue on the railsay and stated at the moment it was 22mm and if it went further over 25mm then [NR] would have to impose speed restrictions and undertake remedial works. The track then settled by 200mm on 27th August causing a partial derailment…”
“We confirm this action [i.e. withholding further payments] will be taken as a consequence of the ground failure at the Stoke Lane Rail Crossing, and also the additional ground failure that has appeared adjacent to the Severn Trent Trial Hole. F&B representation has been on-site as [sic] various times this week and are aware that the three voids (confirmed to date by surface inspection only) all sit along the line of the tunnel route. ”
“As you are aware investigations into both the Stoke Lane rail crossing incident [of27th August 2013 ] and the void upon the highway along the line of the tunnel route are on-going. We record that the investigation to date has revealed that the grouting of the annulus of the shaft (outside diameter between the caisson and the ground) to both launch and receive pits has either not been undertaken in full, or is now defective. ”
“We consider that your Subcontract Works are defective in that railway failures have occurred due to 3 voids appearing along the tunnel route and that the voids have arisen as a consequence of your inadequate/defective grouting of the shafts.”
“….As the rail track collapse/train derailment occurred after policy inception, we anticipate that any damages associated with these incidents would fall within the scope of policy cover. We will, however, fully investigate all of the circumstances preceding the train derailment. If the Insured knew or indeed ought to have known about the voids and/or the risk of earth collapse, then Underwriters might not be prepared to provide an indemnity on this occasion. Specifically, if the Insured failed to take reasonable care and/or precautions to prevent the train derailment from occurring. Also, if the Insured knew of but failed to disclose the possibility of the earth collapse at policy inception. We will, therefore, comment further upon policy liability issues once we have had the opportunity to review the full policy wording. Also, after all of the circumstances preceding the train derailment has been established.”
“ … 5. Liaise with all interested parties to determine when any risk was first detected to the railway tracks. 6. If this was before inception of policy cover, then investigate whether there are grounds for disputing the operation of policy cover in respect of the train derailment incident. 7. Review the policy wording once this can be provided together with the full Underwriters file and establish whether a policy indemnity can be provided for any of the losses arising from this incident. 8. Issue a reservation of rights whilst our investigations are continuing.”
“KW [i.e. Keith Wise] also advising that Brit might think that their failure to tell them about the void, which occurred on 8 August, is non-disclosure and this might also allow Brit to pull cover, but it depended on whether this is something which would be material information for the underwriter to make a decision on, on whether or not to provide cover to F&B.”
“KW Why not tell us? Brit Defence most imp but might be no cover”
“First void would have to be Novae. Derailment would have to be Brit but they may say that we never advised before renewal But if not our problem then doesn’t matter anyway…”
“...Our instructions relate to the validity of the contract of insurance in light of information that was in your client’s possession prior to inception of policy. These issues were initially raised at our meeting with your client and [Mr Wise] on3 October 2013 . Whilst these investigations are ongoing it is necessary for Brit to fully reserve its rights with respect to the validity of the policy until such a time as Brit has sufficient information to determine its stance. All investigations and steps which we undertake in the meantime are wholly without prejudice to that reservation. For the avoidance of doubt, Brit’s reservation of its rights will remain in place until we inform you and your client otherwise in writing…In the meantime, Underwriters are content for their representatives (ajdusters/lawyers) to continue assisting in the defence and handling of the claim so as not to prejudice your client’s position. Such assistance should not be construed as indicating that they affirm the contract in any way and nothing in this letter should be considered as representing Brit’s final position.”
“We have now finalised our investigations and Underwriters regret to advise you that it is their unequivocal opinion that your client is responsible for a material non-disclosure, which renders the policy void ab initio. This means that your client is without insurance cover going back to19 August 2013 . Whilst Underwriters expressly reserve the right to rely on further facts and circumstances, we summarise below the material information that was within your client’s knowledge following the completion of its sub-contract tunnelling works for [MS] at [the Site] but was not disclosed : We understand that F & B were advised by [MS] of settlement in or around the vicinity of their works when they visited site on9 July 2013 . [MS] made your client aware that the settlement was worsening on or around17 July 2013 and raised the possibility of speed restrictions being imposed on the railway line. Your client was advised in writing on8 August 2013 that a void had developed in the vicinity of their works (namely at a trial hole in the carriageway although not necessarily part of F & B’s works). Your client physically viewed the void on13 August 2013 . A meeting or visit took place on21 August 2013 when Liam Burke, Paul Willis and Graham Gibson of your client met two representatives of [MS] to further review the void. [MS] indicated that settlement had further increased and was now at 22mm. F & B were advised that ifsettlement was to go over 25mm then [NR] would impose speed restrictions and undertake remedial works. This letter is not intended to set out Underwriters’ position in full, nor is it intended to be an exposition of English law on material non-disclosure… Underwriters do consider that the appearance of the void in the road together with worsening of the settlement of the tracks subsequent to completion of your client’s tunnelling works to be material as they would influence the judgment of the underwriter…”
“Our investigations have concluded that the voids were caused by over-mining during the Works. In other words, your method for constructing the tunnel removed excessive material from the ground, causing, through natural settlement of material, the voids to appear.”
“…the assured must disclose to the insurer, before the contract is concluded, every material circumstance which is known to the assured, and the assured is deemed to know every circumstance which, in the ordinary course of business, ought to be known to him. If the assured fails to make such disclosure, the insurer may avoid the contract.”
“A circumstance may be material even though a full and accurate disclosure of it would not in itself have had a decisive effect on the prudent underwriter's decision whether to accept the risk and if so at what premium. ”
“…in general terms, a fact or matter is material if it would have been taken into account by a hypothetical prudent insurer when assessing the risk.”
“Every material representation made by the assured or his agent to the insurer during the negotiations for the contract, and before the contract is concluded, must be true. If it be untrue the insurer may avoid the contract.”
“In determining whether there has been an express representation, and to what effect, the court has to consider what a reasonable person would have understood from the words used in the context in which they were used. In determining what, if any, implied representation has been made, the court has to perform a similar task, except that it has to consider what a reasonable person would have inferred was being implicitly represented by the representor's words and conduct in their context.”
“…if the misrepresentation or non-disclosure of a material fact did not in fact induce the making of the contract (in the sense in which that expression is used in the general law of misrepresentation) the underwriter is not entitled to rely on it as a ground for avoiding the contract.”
“In order to prove inducement the insurer or reinsurer must show that the non-disclosure or misrepresentation was an effective cause of his entering into the contract on the terms on which he did. He must therefore show at least that, but for the relevant non-disclosure or misrepresentation, he would not have entered into the contract on those terms. On the other hand, he does not have to show that it was the sole effective cause of his doing so.”
“Waiver arises where the insurer, faced with the conflicting choice of avoiding the policy or maintaining it in force, adopts the latter approach: waiver thus consists of an election between contrasting outcomes, and once the election has been made unequivocally the insurer is unable to go back on it.”
“Avoidance for non-disclosure is a drastic remedy. It enables the insurer to disclaim liability after, and not before, he has discovered that the risk turns out to be a bad one; it leaves the insured without the protection which he thought he had contracted and paid for. Of course there are occasions where a dishonest insured meets his just desserts if his insurance is avoided; and the insurer is justly relieved of liability. I do not say that non-disclosure operates only in cases of dishonesty. But I do consider that there should be some restraint in the operation of the doctrine. Avoidance for honest non-disclosure should be confined to plain cases.”
“5. In the section headed “Proposal”
“… [Mr Kelly] told me that the settlement at track level was 11-12mm. That gave me no cause for concern because the ground conditions were wet, sandy gravel and I always expected some degree of settlement, which is an inevitable consequence of micro-tunnelling…I would have been concerned if there had been an immediate settlement of anything above 25-30mm…”
“... at the time I got this email we were looking at claims. We were not looking at a policy point. I was not looking for what the insured told me and going back through the underwriting file to have a look and see if they had been disclosed. This was purely a claim notification. I was forwarding it on to the claims team to make further investigations. As a result of those investigations, policy points were raised.”
“Risk Name – F and B Trenchless Solutions Limited… Trade : Tunnelling Contractor and Civil Engineering Trading since 2008 FORECASTED FIGURES 2013-2014 Heat welding on sit 5% Steel fixing 1% 15 metre height limit max Depth limited – unlimited – av depth limits 10 to 15 metres Domestic works 33% Commercial 34% Ind/Agriculture 33% Rail works – av 4 times per year max – no lines active, controlled by Network Rail, working on rail for drainage and cables, no installation of train lines … Airport works – 1 job in last 4 years – Drainage, runway not active PL£10m EL£10m …”
“it does not mention employers’ liability in there. It is just a risk as a whole…This is a tunnelling contractor…As my statement says, there is inherent risk with tunnelling. That is increased when a train is active on the railway line above it.”
“…It would not be good practice for insurers to rush to repudiate a claim for late notification, or even to destabilise their relationship with their insured by immediately reserving their position.”
“KW Why not tell us? Brit Defence most imp but might be no cover” and “KW [i.e. Keith Wise] also advising that Brit might think that their failure to tell them about the void, which occurred on 8 August, is non-disclosure and this might also allow Brit to pull cover, but it depended on whether this is something which would be material information for the underwriter to make a decision on, on whether or not to provide cover to F&B.”
“First void would have to be Novae. Derailment would have to be Brit but they may say that we never advised before renewal But if not our problem then doesn’t matter anyway…”