2.6 The position of a not co-insured liable third party in the project
It may be that the third party liable for the damage to the assured’s economic interest is not part of the co-insurance arrangement. An example is the Ocean Victory case where the owner and bare-boat charterer were jointly assured, but where the directly liable party was a sub-charterer that was not co-insured. The bare-boat charterer was liable for the breach of the safe port warranty against the owner, the time charterer was liable against the bare-boat charterer and the sub-charterer was liable against the time-charterer. Similarly, in a building project the builder and main-contractor may be assured/co-insured, but fire is caused by a not co-insured sub-contractor. The sub-contractor is liable for breach of contract against the contractor, who is similarly liable against the owner. The question then is whether the fact that the insurers are prevented from claiming recourse against the assured(s) and the co-assured(s) will prevent them from pursuing a subrogated claim against this third party.
The starting point according to the tort act § 4-3 cf. § 4-2 for a professional tort feasor and NP § 5-13 is as mentioned that an insurer having paid compensation under a casualty insurance contract may claim subrogation from the liable third party. A complicating factor is however that the right of subrogation is tied to the relationship between the liable party and the injured party (tort act § 4-3 cf. § 4-2) or a claim from the “assured” against a third party (NP Cl. 5-13). In a case where the insurer has covered loss of the owner’s economic interest, but the subrogation claim against the co-insured who is liable against the owner is barred, the subrogated claim must be raised against a not co-insured party further down the contractual chain who is liable for the damage against his contractual partner, but not against the owner.
However, the wording in NP Cl. 5-13 may be reconciled to this situation; It may be argued that the insurer in this case first has covered the assured’s loss of his economic interest in the vessel, and thereafter compensated the co-insured bare-boat charter for his liability for this loss through waiver of subrogation. The insurer then is “subrogated to the rights of the assured against the third party concerned”, i.e. subrogated to the co-insured’s right against the third party concerned. It is clear that the co-insured qualifies as “assured” under the policy, and this assured “has a claim against a third party” – namely the charterer, who in turn may claim from the sub-charterer.(1) For UK marine insurance, this issue is governed by MIA sec. 79.
It is less natural to say that a co-insured contractor who is protected against this liability against the builder gets the status as injured party according to tort act § 4-3 cf. § 4-2 and thereby opens the door for a subrogated claim against the not co-insured liable contractor. This requires a shift from being a liable party to an injured party due to the waiver of subrogation and is conceptually difficult.
On the other hand, the general principle according to the Norwegian Supreme Court is as mentioned that a party that has covered another's party's obligation, normally and as a starting point, has a valid recourse action, and that a limitation of such recourse action requires specific legal basis.(2) Rt. 1997 p. 1029 (at p. 1036). The Supreme Court here refers to court cases permitting recourse from insurer B against another insurer A being liable for loss paid by B,(3)Rt. 1986 p. 381and Rt. 1993 p. 1018. and the recourse claim in the case where the statement is given concerned a payment from the insurer that the insurer denied liability for. These situations are therefore not directly comparable to the issue at hand, although it could be argued that the casualty insurer as indirect liability insurer for the co-insured liable party is covering the liability of the not co-insured sub-contractor. It could also be argued that it is a case of joint and several liability between the casualty insurer and the sub-contractor for the co-insured’s liability, which should be solved through an analogy from the tort act § 5-3 regulating the situation when more than one party are liable for the same damage.(4) Wilhelmsen 2019 p. 19. The rule here is that the liability between the jointly liable parties should be divided according to the degree of fault and other relevant circumstances, where i.a. causation is a relevant issue.(5) Wilhelmsen 2019 p. 19, Hagstrøm/Stenvik 2014, p. 537; Trine-Lise Wilhelmsen and Birgitte Hagland, Om erstatningsrett, 2017, p. 374. It appears to be an open question which of these legal routes one should apply as a legal basis for subrogation in such cases.