After the Fire
A Major Loss Case Study
for the Insurance Institute of Plymouth
Paul Thomas ACII, FCILA, FUEDI-ELAE
Major Loss Director, QuestGates
Format of Case Study

The Parties

Case Scenario

The Management of the Incident / Claim

Issues Considered in the Adjustment of the Claim
Who are the Parties
Freeholder
Who are the Parties
Freeholder as Owner/Occupier

Private house

Industrial unit

Office
Freeholder as Landlord

Rents the property to a Tenant

Multiple occupancy tenants
Who are the Parties
Multiple occupancy building
Private residence flats - Leaseholders
The Parties

Freeholder owns the land

Leaseholders purchase the leasehold for a set sum for a set
period (99 year or 999 year lease)

Leaseholders pay a ground rent, usually nominal, to the
freeholder

Leaseholders (or freeholder) form a Management Company
comprising all the leaseholders who elect from their number the
Officers of the Management Company
The Parties
Managing
Agents
The Parties

The grounds, exterior and common elements of the building need
to be maintained and leaseholders obligations enforced as
necessary

The freeholder can organise and manage this or the freeholder
can grant a “Right to Manage” to the Management Company
(RTM)

Where the Management Company has a RTM the Officers of the
Management Co can organise this or can appoint a Managing
Agent to represent them and undertake these tasks
Legal Relationship between Parties
Freeholder / Management Company / RTM
Management
agreement
Individual
Lease Contracts
Leaseholders
No direct
contractual
agreement
Managing
Agents
The Insured
Bristol Road Management Company
The Insured Premises
A four storey block of 28 one and two bedroom flats

The Management Company has contracted management of the
block to Managing Agents

Leaseholders in residence

Leaseholders who let their flat to tenants
The Parties
Freeholder
Bristol Road Management
Co. (RTM)
Managing Agents
Leaseholders
(as occupiers)
Leaseholders
(as Landlords)
Letting agent
Tenants
The Insured Event

Fire originating in a top floor tenanted flat

Scope of damage

Issues

Management of the Claim
Scope of Damage
Scope of Damage
Scope of Damage
Scope of Damage
LEASEHOLDER
TENANT
LEASEHOLDER
TENANT
TENANT
STAIRS
LIFT
LEASEHOLDER
LEASEHOLDER
Issues

Cause of fire

Whole block without power / lifts out of action / roof partially open

Managing agent moved everyone into hotels
Management of the Claim
Major Loss
Director
Major Loss
Surveyor
Regional Adjuster
Supported by:

QuestGates Concierge Team

Forensics

QuestGates vetted and approved suppliers (contractor,
project surveyors, damage mitigation contractor)
Management of the Claim

Power to block restored / lifts recommissioned / common areas
sanitised

All lower floor residents moved back in within 5 days

Seven top floor flats not habitable

“Top hat” the damaged roof. Reinstate ceilings / decor / electrics
of top floor common corridor

Decontaminate three lightly smoked flats
Management of the Claim

Decontaminate two heavily smoked flats. Repaired fire damaged
entrance doors

Flats habitable by week four post fire

Water / fire damaged flat had ceilings taken down and reinstated,
electrics made good, redecorated etc. Flat habitable by week
eight post fire

Gutted flat stripped out

Schedule of works for fire gutted flat and main roof tendered

Last flat habitable by week twenty two post fire
Issues in the Adjustment of the Claim

Managing Agents / Letting agent fees

Managing Agents decision to put all residents into local hotel
accommodation

Asbestos

Effective decontamination of smoked flats only if contents
cleaned as well

Pigeons
Issues in the Adjustment of the Claim

Tenant where fire originated left hospital with no forwarding address / contact
details

Informal tenancy

Unlicensed alteration to fire gutted flat
Q&A
How were the Issues Resolved

Managing Agents / lettings agents fees

Alternative accommodation costs

Cleaning of flats (contents)

Pigeons

Clearance of tenants fire damaged possessions without approval

Loss of rent where no formal tenancy existed

Unlicensed alterations to flat reinstatement
Proximate Cause
 “Proximate cause means the active efficient
cause that sets in motion a train of events which
brings about a result without the intervention of
any force started and working actively from a
new and independent source” [Pawsey v
Scottish Union and National (1908)]
 Proximate Cause – the “dominant” cause
 Separate and intervening cause
Policy Definition of Insured Rent
Rent Receivable
 The money paid or payable to the
Insured for accommodation and services
provided as landlord (including service
charges unless excluded by
Endorsement) at the Premises shown on
the schedule