Archive of NAYPIC/Youth Parliament fighting Corrupt Court Case with the powers that be within days of Mary's Mum's death 2011 11/11/11

Events concerning the Financial Ombudsman

Lease – There are no repairing obligations on either the landlord or the tenant as it is covered by the building insurance, drafted in the lease. We lessees pay a premium towards the building insurance.

In the insurance policy it states that in the event of a claim, lessees are to be treated as if they had insured under a separate policy. The building insurance is a joint policy holding separate cover in the event of a claim. Lessees are a ‘noted interest’ therefore treated as a separate customer of UK General (UKG) building insurance, a requirement and contractual obligation set out in the lease. Lessees are also contractually prevented from insuring the building except through the landlords insurance.

Our ‘business interruption’ and ‘cessor of rent’ claim was as a result of the landlord (fault) liability, which is fortunately a cover insured in the buildings policy with a section called ‘Property Owners Liability’. All parties are covered in the event any of us are at fault, as long as notice is given on time.

However ‘Liability’ for these repairs was neither, admitted or denied by the landlord, the insurers do not allow a landlord to admit liability, as it may in some cases prejudice a claim so that is the general rule.

Unbeknownst to us UKG however wrote to the landlord to state that they had breached the terms of their insurance by not reporting the losses to the insurance company and also by not mitigating the losses by failing to repair in a timely manner. This further breached a contractual obligation set out in the leases (and the policy) that the landlord is to repair with speed subject to having made a claim, both of which the landlord failed to do.

We lessees in 2005 were asked to provide evidence of why they believed the landlord was at fault to the loss adjuster Alan Hines of QuestGates, for the ‘Property Owners Liability’ (POL) building insurance cover with UKG and much later with another loss adjuster Graham Ward of the Royal & Sun Alliance liability insurers who were brought in (RSA being an extra ‘integrally based combined policy’ forming part of the UKG building policy offering further ‘liability cover’ and POL) because UKG had unbeknown to us refused cover causing mass delays in the process, since the landlord failed to mitigate their losses.

The issue of liability being left unanswered breached the rules of pre-action protocol in construction and engineering disputes, which strictly and legally allows 3 months for any liability insurer to admit or deny liability (or even accept liability without admitting it on behalf of the insured landlord, which is why liability insurance exists to protect the insured and shoulder any financial liability). We therefore in accordance with the pre-action protocol were entitled to know if liability was accepted or denied, instead we were left in a position of indifference for years not knowing if we would ever have our losses recouped. The financial burden, interest and immense stress caused a great strain on us as a business and on a personal and organisational level.

In 2007 we asked the Financial Ombudsman to intervene and they told us to get a ‘final notice’ from UKG. UKG gave a ‘final decision’ notice to say that we were not covered under the terms of our policy despite POL being in place. We believe that the insurer should have acted in our interest and paid us immediately which would have mitigated any further continuing losses and then they should have recouped their losses from the landlord as well as told us the landlord breached the cover. However if that were to be the case the UKG would of had to pay us for the landlord being ‘liable’ for our loss under the POL, which covered the landlord. We believe that the UKG made a ‘commercial decision’ not to recover our loss and chose instead to view us a third party and treat us at arms length. UKG however much later, to avoid an embarrassing and potentially publically damaging ‘satellite dispute’ with RSA were forced by the legal team of RSA Plexus Law to trigger the very same POL cover that they had avoided using and pay equally with Royal and Sun Alliance to try to resolve the claim, as RSA insisted the claim was valid under UKG POL cover for which the landlord still held cover. At this stage we appointed one of the best loss adjusters in the country as we could not understand what was taking so long and we needed someone who did, as we wanted to settle quickly and get on with work.

However in a tri-party meeting, RSA, UKG and the landlord they decided together to force us into litigation and try their best to reduce quantum rather than resolve the claim and insisted we appoint solicitors all of which would be more money for us at this very difficult time anyway. We knew we could not afford a legal team and also believed that the UKG should provide us with the legal support under the cover we held with them or why were we paying for a building insurance in a building issue that did nothing to help us mitigate further losses if even UKG said the landlord was liable inadvertently because they had refused the landlords claim under the POL on the grounds that they failed to stop the losses and report the damage to UKG so they actually agreed with us yet did nothing to help us as a separate policy holder in the event of a claim to recoup the losses even if it was only for their own benefit to stop what has been a case for them of further financial loss defending a policy holder whose wrong.

All parties now very interestingly took a unified battle stance towards us, which was so transparent to us. Firstly the landlord wanted to save face with the disrepair because as a Residential Social Landlord it had a political agenda at the time to take over local authority stock and our disrepair case being so severe in delays only served to reflect on the way they treat their tenants. The local councillor and later the Mayor had written to the Housing Minister Caroline Flint expressing these concerns.

The UKG were never interested in paying the claim being the head building insurer and a relatively new firm from Leeds and HQ in Dublin. CEO Paul Smith was aware of the claim as the claimants had written to him in Bermuda and he asked Ansell West to deal with us.

Finally the RSA because we threatened the press and FOS thought they could beat us down through the laborious legal route saying we had not properly presented our claim and forcing us into court. Attempting a very old fashioned trick by costing us out of any justice by dancing us into court which cannot be legal?

According to the Financial Services Ombudsman now (who we contacted again this year since the case has been heard against the landlord in court so the facts are in place to make it clear for FOS and the insurers have never been investigated for their behaviour) we are still pursuing a claim for business interruption losses, which they say is not in the policy cover. We are actually making a claim for liability, fault, error which caused massive losses business interruption and two material damage claims ignored for so long as to put us out of business in both premises. That means POL covers it and the general material damage covers! The FOS are trying to say we are not a customer and therefore they can’t deal with it but we believe that having taken the time to read the case that they are scared to look into the case due to the huge losses occurring until today and would now amount to a serious decision FOS are far too scared to make as the implications are we could walk into any solicitor with the FOS decision are sue both insurers for the ruining of not only our lives but of the Youth Parliament Social Enterprise and Youth Economy. The legal fees alone are £388,000.00 to date that UKG and RSA have had to already pay to represent the landlord and if its found by FOS that UKG too would have to pay our legal fees under the policy, the claim really should have been resolved without litigation as they would end up paying far more and it is looking very suspicious as to why they are all spending so much to take us down and still today. Yes the claim today is large but at the beginning it was a modest claim. If insurance people want to go around avoiding claims they should check who they are dealing with because with nothing left we do not go away and if they had anything on us they with all their legal might would have taken us out by now. We have the truth! A true case of financial corruption by the big people trying to take down the little people.

DISP 2.7.6

The Financial Ombudsman Services rules when dealing with a complaint about insurers are:

(1) The complainant is (or was) a customer,5, 6 payment service user4 or electronic money holder5, 6 of the respondent

(2) The complainant is (or was) a potential customer,5, 6 payment service user4 or electronic money holder5, 6 of the respondent

(5) The complainant is a person for whose benefit a contract of insurance was taken out or was intended to be taken out with or through the respondent

(6) The complainant is a person on whom the legal right to benefit from a claim against the respondent under a contract of insurance has been devolved by contract, assignment, subrogation or legislation (save the European Community (Rights against Insurers) Regulations 2002)

The FOS are saying that these rules get the FOS off the hook and don’t allow them to deal with this claim as they say we are not a customer and therefore they cannot investigate. So the question is how on earth are we not a customer it makes no sense at all!!

Under the POL of our insurance policy, the landlord was at fault. It was not just that the building had disrepair but the landlord failed to repair with any speed or diligence as set out in the contractual obligations that requires them to in the lease, therefore making the landlord ‘liable’ for our losses (business interruption or otherwise). Had we simply been interrupted and this interruption was not exacerbated by the landlord’s inaction, we would in no way have had any claim against the landlord to pay us compensation whilst we could not trade including rent paid which unduly enriched the landlord. The insurance and the POL would not be triggered. Our claim is for them to admit ‘liability’ and pay!

UK General Insurance (UKG) did not defend the landlord initially and said that they had breached the terms of the insurance because firstly they failed to mitigate our losses and secondly they failed to give notice to the insurance company. The insurance then failed legally or in any other way to represent us!!

Correspondence from the Financial Ombudsman in 2011

13th April. 2011 Letter of acknowledgment providing a reference 6416403/JN/CCDG
18th April. Request for a copy of the ‘Final Decision Letter’ to give referral right to the FOS
5th May. Request for signature of complainant Chantal Cracy
18th May. Acknowledgement that our correspondence has been received (two files).
19th May. Consumer fact sheet enclosed and acknowledgment that the insurers have been contacted to provide information, once received the FOS will start work on the case within 8 weeks.
14th July. Acknowledgement that the complaint will be now handed over to an adjudicator
19th August. The case has now been referred to an adjudicator Mr Mike Ward who writes that he specialises in settling disputes informally. He will look at both sides and weigh up the information. Where a complaint cannot be settled informally he can issue a more formal recommendations about whether a complaint can be upheld or not. If either side do not accept what he says they can ask for the complaint to be reviewed by an Ombudsman. The time taken on the outcome will depend on what is involved and whether he needs further information. He explains that there may be issues, which could prevent the Financial Ombudsman Service considering the complaint. There is now a new reference number 6416403/MW/IS19
26th August. Email from Jo to Mike Ward following Mike make a telephone call to Jo to say “the insurer may have made a commercial decision to avoid the claim” which apparently and according to Mike they would be “perfectly entitled to” and further that the FOS may not be in a position to deal with the complaint according to rule 2.7.6. The email thanks Mike for his call and goes on to ask for Mike to let Jo know where to find the rules he quotes as she has looked but she could not find them. Jo does not get a reply but eventually she finds the rules after a day or so and copies/pastes them into a further email to Mike saying she finds it suspicious for Mike to only mention this flimsy rule and that she believes that she is a policy holder which on the phone Mike denies she is and further states the rule does not apply to her.
16th Sept. Mike emails Jo apologising for not getting back sooner and says he has a particular issue that he needs to be cleared up with UKG saying it does not affect her claim but it is an issue which needs to be clarified. Jo responds and attaches the permission to appeal skeleton argument she has just issued at the High Court (after a nine month wait to receive the transcripts from the courts paid for by public funds with which without unusually and according to the organisation Liberty uniquely she has not be allowed to ask for permission until received as ordered by the Judge. The document outlines the corruption to date. Jo further asks a pressing question about what Mike said to her on the phone “I also need to know is a company taking a commercial decision really 'legally entitled' like you said it was on the phone, to do that? If so which law backs that? Then well, what is the point of getting insurance cover?” Jo adds “Final point in the light of the fact that I still have no legal representation and that you the Financial Ombudsman finds that the building insurance failed to give me legal cover even though I was covered under the policy, how soon can they start to pay that? I really want a lawyer to talk to although I have learned a substantial amount about the law. I would probably represent our side still in the High Court at Appeal as you know its a serial complex case plus the lawyers from what I have observed get so many things wrong, it is hardly worth getting them involved at this late stage. To which Mike again does not respond.
22nd Sept. Jo sends Mike an email asking has he got the information that he mentioned he needed from UKG and she asks Mike to give her a call. Mike responds and says he will call tomorrow morning or afternoon which ever suits her.
23rd Sept. Telephone call between Mike and Jo reveals Mike is wondering who the underwriter is as it is important to go after the correct people. He had thought it was AXA but it later turns out to be Lloyds. Jo tells Mike her Great Aunt Helen Mary Lloyd was married to Thomas Owen Lloyd and Mike say’s that the Lloyds Society cannot be involved as UKG have permission to deal with complaints.
29th Sept. Mike writes to Jo to tell her, the policy was written by the lead insurer under its former identity of Primary Insurance Company Limited (PICL). Therefore UKG is authorised to deal with complaints against the insurer. He says that the identity of the insurer is not relevant to the complaint although the complaint must be set up against the correct insurer. He goes on to make several points in his assessment to date:
The policy provided 2 million pounds cover in respect of POL.
This cover was for accidental bodily injury or accidental material damage to the property arising out of a defect in the buildings.
The policy was for the landlord and leaseholders given that we would be joint policyholders.
Additionally the landlord held a liability policy with RSA but no joint interests are noted on that particular schedule.
Our claims constituted mainly of business interruption and consequential losses as opposed to those insured under the policy.
It was not made clear to you by the landlord that you could make claims for some time.
The broker made it clear that our claims were not covered and we acknowledged that.
Monies were paid by UKG for the material damage. The liability claim was ongoing.
Court proceedings followed and continue.
Your complaint to FOS is that you should have had your legal costs covered by the building insurers to recoup your losses (and their own Jo adds). You are dissatisfied about the way the UKG handled your claim as a joint policyholder.

Mike goes on to say the FOS is not free to consider every complaint referred to it and is governed by Dispute Resolution Rules of the Financial Services Authority. Mikes position is DISP 2.7.6 (1), (2) & (5). He says “I do not believe you were named on the policy and so you were not a customer or potential customer. You were not bringing a claim directly under your policy but as a third party against the policy holder.” No claim could have been brought against the insurer except in very narrowly defined circumstances not applicable here. Mikes conclusion is that “you were not seeking to assert any rights against the insurer as a customer or potential customer and therefore (1) & (2) do not apply to this scenario”

Mike then agrees with my email now were I assert I was a customer and copied the rules out, he states, “Insofar as I believe you were parties for those benefit a contract of insurance was taken out leaseholders were included in the schedule as “Policyholders” you were allowed to deal with your own claims and if anyone had brought an action against you as a result of a defect in the building the POL would protected and covered you. However the policy did not provide legal cover for an action brought by you or the landlord or for business losses suffered by either party.

Therefore you are not seeking to recover contractual benefits entitled under the policy. The policy provides a part for defence and is being utilised by the landlord to defend your claim.

Therefore you are the third party and the insurer is entitled to deal with you at arms length.

The loss adjuster dealt with the claim and I can see no dispute between you both after 2006.

If the Ombudsman found in your favour and awarded £100,000 you would forfeit any rights in law to pursue the balance of the £400,000 claimed Andrews v SBJ Benefit Consultants [2010] EWHC 875.

I believe RSA would have no case to answer although I can only deal with one insurer. This is because the policy does not name any other party other than the landlord on the policy.

30th Sept. Jo Flores (cross over correspondence) emails: Since it has now been established (as I have always stated from the beginning) that I am a policy holder in my own right as if I had insured separately from the landlord:
1) How soon can I get my building insurers to give me legal help as with the appeal pending I'll want that?
2) Will I get my legal fees back of £55,000 that I had to spend and will the £388,000 of the other side’s fees be wiped out?
3) Even if you award compensation can I sue Lloyd's?
4) What happens about suitable or alternative accommodation to run my businesses from for which I was insured?
5) How does one begin to sort of the mess of what has been done to me so I get back to some sort of normal position and so what will you be recommending?
6) Do I finally get to meet the insurance and would you be there and can I bring my loss adjuster Alan Harris?

I still can't believe this has happened to me, can you let me know when you will adjudicate? I've had enough of waiting, its enough now, really!
3rd Oct. Jo writes an email to Mike she says: Yes funnily enough I got your letter the same day I sent my email about suing Lloyds who you said was the insurer. 

I think bearing in mind that the action of trespass was against me so technically although claimant in the whole scenario I was defending a trespass, which lead to all the issues being looked at by the courts I still have a case to be answered as to why I wasn't defended legally.

Also since I asked the insurers to give me the facts (which I many years later got on disclosure but knew already from the start) about whether they were not paying for my losses under the combined insurance policy, specifically the POL, because of CHA not mitigating their losses by acting expediently and they did not give me this information as my insurers should have and should have advised me legally then as I asked them to, then again they still have a case to answer.

Again we discussed that too on the phone before your quick ruling on that they were only able to defend claims, which they certainly did not in my case and left me in the dark all along.

Look it is obvious to me and my loss adjuster at the time and the satellite dispute goes some way to proving it that CHA had breached the terms, none of them wanted to cover them and then between the lot of them they danced me into court knowing that the premium would cover them putting me the 'problem' at arms length as they all watched me fight for my life. Making me stupid offers not reflecting my losses at any point.

I will sift through emails today and tomorrow to show you what I mean but in the meanwhile I will be also looking into suing Lloyds as I know I'm right. Again on the 3rd Oct Jo writes another email to Mike: Mike this is the start of us being put to legal expense and having to employ a solicitor. It is obvious that the CHA are starting to try to evict when the problems are stemming from defects in the building...

-----Original Message-----
From: David Wise [mailto:DWise@steeleslaw.co.uk]
Sent: 21 August 2008 14:36
To: info@spaceshift.co.uk
Subject: Cromer Street FAO JO GAVIN
Importance: High

Dear Jo,

1.) I refer to our telephone conversation today.

2.) I attach a letter for your approval. Please approve and I shall send.

3.) From a file set-up point of view, I note that Chantal is the Co- Lessee
of 106/108. As such, we shall also be acting for her. As such, I need to take
a means of identity for her (passport/utility bill for home address) as we
did for you. You will both also need to sign a revised client care agreement.
When are you both available to come in and do this?

Look forward to hearing from you asap.

Kind regards
David. 
David J Wise
Associate
Steeles Law
for Steeles (Law) LLP

Another email was sent on the 3rd Oct from Jo to Mike: Just forwarding the run up to that email... To make it clear to you the landlord had issued a section 25 notice to double the rent if we did not pay £5,000 to have the floor renewed which was an insured risk.

The insurance refused to pay for the floor until the liability claim was over.... why? It was an insured risk and we could not trade. It should have been a very common consequential damage material damage claim. Just because they would not pay we got the letter from the landlord to double are rent on 104 or pay for the floor. They said it was a reasonable offer but it was harassment and improper inducement. Why did the insurers not pay and if AGAIN it was because they were all having a dispute as to who was to pay then how is that our problem?

Thee insurers should have been defending our position but they left us in the dark because they were all not wanting to pay leaving us in a position of indifference.

Had the UKG just told us that the delays were due to the landlord and defended our position and their own instead of fobbing us off then they and us would be in a better position today.

From: spaceshift [mailto:info@spaceshift.co.uk] 
Sent: 18 August 2008 17:13
To: Allison Sandiford-Austin
Cc: David Wise
Subject: RE: need your advice before you go
Hi Allison,
Regarding the list of insured risks, I have attached a copy of the building insurance which covers insured risks for both spaceshift and Scarlet. This is the old Building Insurance, they have now changed to another insurer, for which I don’t have a copy of the policy. However I suspect it should be similar and have just requested for that to be sent to me – which they may or may not do.
Also attached are copies of the two letters from CHA dated 14/08/08 with demand for rent payments. We have always ended up paying full rent on both shops right until 1st July 2008, which is the quarter they are now referring to. The lease also seems to imply that they are insured for rent loss in the case of damage to the premises covered by the insurance.
You are right that we need the lease sorting out first strategically but in this instance the landlord as per usual is coming at us with any angle that puts us out of business, just like they did with the rent review. This will render us unable to afford to continue with the Scarlet rent review if we lose the money maker spaceshift, which we did say we wanted to tackle after the rent review is completed but now seems much more urgent.
I have attached a copy of the lease for spaceshift and yes, it does state the same as within the Scarlet lease re insured risks, which should apply to previous and recent disrepair at spaceshift; but in the case of lack of ventilation it may be more than that, i.e. a serious breach of building regulations.
I will also forward the recent correspondence by email with the landlord for you to see the state of play at present re recent leaks and lack of air in spaceshift. I have been in to the Building Control Department at Camden this morning and have requested copies of the original plans showing whether air vents should have been put in as standard and this should hopefully be sent to me in a few days. Building Control also advised that we should speak to environmental health to have the space closed down until standard air vents are put in.
The landlord are saying in their email that this is our responsibility but I think this is not.
We shall appoint a surveyor for market value and for the floor damage at Scarlet and now for the air vents at spaceshift to help the overall case.
So as they take us seriously and that they don't dare repossess etc., can you respond to both rent demand letters on our behalf, highlighting the legal clause about non payment of rent? If you need further payment and/or ID to represent us with 106-108 Cromer Street , please let us know and we will drop it off to your offices tomorrow. I certainly don't want a situation of guarding my own front door from a drill taking the locks off or we will be really in a bad position then.
Kind regards
Jo
From: Allison Sandiford-Austin 
Sent: 18 August 2008 14:53
To: 'spaceshift'
Subject: RE: need your advice before you go
Hi Jo,
Insofar as the exchange of correspondence between you and the landlord relates to Scarlett Maguire, can I please see copies?
With regard to Spaceshift, as you know, I have not seen the lease in relation to this site and therefore, I cannot advise you on how the terms of that lease affect your position (also strictly speaking, as I understand it, I am instructed to deal with the lease renewal of 104 Cromer Street (?)).
That said, the lease of 104 Cromer Street (Scarlett Maguire)  at the bottom of page 29, clause 6(3) states the following:
"If the Demised Premises or any part thereof shall be destroyed or so damaged by fire or any other risk for which the Landlord is indemnified under the insurance of the Demised Premises so as to be unfit for occupation or use then unless the insurance of the Demised Premises shall have been vitiated by the act neglect default or omission of the Tenant the rent hereby reserved or a fair proportion thereof according to the nature and extent of the damage sustained shall be suspended and cease to be payable until the Demised Premises or damaged portion thereof shall have been reinstated or made fit for occupation or until the third anniversary of such destruction or damage whichever shall be the sooner"
It strikes me however, that there is no list of "Insured Risks" attached to the lease (or at least there isn't one attached the the copy of the lease that I have - is such a list attached to your copy of the lease?
Notwithstanding this, it is clear from this clause in the Scarlett Maguire lease that you are not required to pay rent for the premises if it is rendered unfit for occupation or use as a result of damage or destruction cause by an Insured Risk (provided that you, as the tenant, are not responsible for the cause of the damage or destruction).  There will no doubt be some debate as to what amounts to "rendered unfit for occupation or use" but in principle the term is clear and it is a reasonable starting position from your point of view.
With regard to Scarlett Maguire, once I have seen and considered the correspondence,  I or David (in my absence) can write to the landlord and their legal representatives in appropriate terms drawing their attention to this clause.
Have a look at the Spaceshift lease to see if there is a similar clause. 
In addition to sending me the correspondence that you refer to in your email, please also give me details of when you last paid rent in respect of Scarlett Maguire.  Do you have an up-to-date rent statement?  What does the landlord say the arrears are?
I am copying David into this email so that you have his email address.
I await hearing from you as soon as possible in view of the landlords 7 day threat.
As you know, tomorrow is my last day in the office until 3rd September but David returns from his leave tomorrow so I will fully update him.
Rgds
Allison

From: spaceshift [mailto: info@spaceshift.co.uk ] 
Sent: 18 August 2008 12:24
To: Allison Sandiford-Austin
Subject: need your advice before you go
Importance: High
Dear Allison,
We just received 2 nasty letters dated 14th Aug 08’ from the landlord on Saturday. They are basically stating that if we don’t pay the rent due on both shops since 1st July within 7 days, they will either send bailiffs or would consider repossession. This is following some email exchanges we had with them in the last 3 months to do with spaceshift (our other business at 106-108 Cromer Street) where business has been interrupted since 13 may due to a couple of leaks and where we also realised there is no ventilation at all in the premises – i.e. not even the basic air vents which should allow air to naturally come in and out of the building and should have been fitted in the 1st stages of refurbishment, according to UK building regulations. We asked them if they would agree to cover the costs of fitting in vents, which they refused in an email last week and to also give us a rebate on the rent since we could not trade due to these problems and that was their response. They also blatantly denied that the building may not be complying with building regulations and standard health & safety requirements.
For us this is extremely bad news, as the lack of ventilation means that we will not be able to proceed as we planned with finding a client to hire the premises on a long-term contract, thus guaranteeing a regular income, even if much lower than it would be with a succession of short-term hire.
We therefore end up being in a total static position on both businesses: unable to trade but forced to pay rent and business rates on both shops. We need to know from you asap whether we have the right to demand from the landlord that rent payments should stop while repairs are still pending.
Thanks Allison, I look forward to hearing from you
Jo (07916 325 037)
PS: On a brighter note, spaceshift was hired for a day’s shoot by a production team from Channel4 last Friday which is major exposure and marketing: because the shoot they had to do was supposed to take place in a sauna, they said they did not mind the lack of air having taken an enormous shine to the space and it was a very successful day, starring T4 presenter Steve Jones in a brief promo to be shown on TV at least ten times a day starting 28th Aug on Channel4 to introduce a programme entitled “When Women Rule the World”… ;-) so there’s always hope if we can get things tied up quickly!

3rd Oct. A further email was sent from Jo with 4 attachments, Jo wrote: Dear Mike,

These letters prove that the legal action was first taken by CHA with the full legal backing of their insurer and ours too as they paid the legal costs. It would then fit that we defended our own position when we had peaceable made known to the landlord and all their insured who were now plotting together to get rid of us and the claim. Please see attached 4 documents, two rent demands, letter to the directors and finally a letter of repossession where the landlord trespassed despite us being forced once more to pay rent they drilled the locks off to conceal the evidence of disrepair.
4th Oct. Mike writes: I note you have referred to Lloyd's. However, Lloyd's syndicates were co-insurers with UK General Insurance (Ireland) Limited and the latter made all decisions as lead insurer. That is the normal market practice and the co-insurers would not handle claims or complaints, instead leaving that to the lead insurer. As such Lloyd's is not involved in the process and will not have any input. Can you confirm whether there are any further points you wish to make? I will be dealing with the points raised in due course but want to ensure you have included everything you wish to add before I do so.
4th Oct. Jo wrote: I have just taken some independent legal advice from three different people.

The views are relatively the same but with a few differences.

1) As a policy holder the insurance company should have sought to recover my losses in the first instance and my landlord should have been viewed as the 3rd party.

2) The insurance company should have paid my losses and taken action against the landlord to recover their losses since they breached the terms of the policy so the insurance owed them no duty even under the POL.

3) Although cases of insurance companies being sued are difficulty especially Lloyds who have some immunity if as I have done I manage to negotiate through a family friend to settle then that may be the most fastidious move. Any judgment by the FO will help.
5th Oct. Jo emails Mike:
You clearly state as a leaseholder I was a policy holder.

You say that I probably wouldn't have a claim against RSA yet although not named FARR PLC refer to RSA as part of a combined policy with the building insurance policy.

I may have told Alison Gibson at the time very early on in the claim and before I had access to the terms of the insurance policy that I understood her point that does not mean that I accepted it, I simply accepted her point that she was saying time and loss were not covered under POL but suffice to say Graham Ward the loss adjuster did say later that we had a claim that could be treated under the POL now he was acting for RSA yet referred to the POL as part of UKG's policy. I believe the two were therefore combined as it says at the top of the building insurance policy written by FARR PLC.

It does not just say that the insurers can defend claims they can also take legal action to recover costs as I asked them in the first instance in 2005 to do, if the policy had been made void by the landlord.

Did RSA have the right to force UKG to pay for some of the costs? Did UKG cave in due to any legal threat or undue pressure from Plexus Law. UKG had made their position clear to not pay towards anything due to terms being breached, they made it clear to us and to the landlord. In fact the landlord threatened to sue them through Woolf Simmons Solicitors when Jaqui Greene was commercial manager. In no uncertain terms the landlord was forced to back down.

Why did our building insurer team up later with a liability insurer when according to them they had no case to answer. Why were we left in the dark as to the reasons behind their decisions, being that the landlord has breached the terms. They should have taken on our claim from the start and legally backed us to recover our losses. They had a conflict of interest investigating liability against effectively themselves paying us if they had found the landlord had breached the terms which they already knew they did. They should have put us in the picture and backed us. Had they taken that position, backed by the breaches, then RSA could not have effectively dragged them into the saga that was then allowed to ensue involving other legalities effectively that would not have been allowed to occur had we been not been left defenceless against a powerful public body landlord and Plexus Law.

You say they had no contractual duty but in fact they did, they had a duty to recover our losses from the 3rd party but for whose lack of action breached terms and led to us not being covered for cessor of rent or the floor and finally the lack ventilation airbricks which could have again been pursued by our building insurer because of actions arising out of defects in the building and HAPM insurance was there for that too.

5th Oct Email from Jo to Mike: I need to ask you something in relation to that case law you quoted me. Also another email from Jo -  
Dear Ms Flores

Thank you for your email. Just to clarify, although I would regard the cases against CHA and UK General as separate, I cannot legally advise you as to any potential effect the latter would have on the former. That is for you and your legal advisers to consider.

Unfortunately I cannot guarantee a swift resolution to the complaint. The case is not straightforward and you have raised a number of further issues which I have to consider. As I said, I assume you have nothing further to add, although if you do I would appreciate receiving this by the end of Friday 7 October 2011 at the latest.

If I am unable to provide you with a favourable outcome by reason of eligibility or otherwise, you will have the right to refer that to an ombudsman for a final decision. I would have no control over the content of that final decision and the matter would be looked at afresh.

Perhaps I might also reiterate for the sake of completeness that this complaint does not and could not involve the Society of Lloyd's or any of its underwriters. The lead insurer is UK General Insurance (Ireland) Limited and this is the only insurer we could consider a complaint against.

I will deal with your additional points as soon as possible and hope to be in a position to do that by 4 November 2011.
Yours sincerely
Mike Ward 
Adjudicator | Financial Ombudsman Service
South Quay Plaza | 183 Marsh Wall | London | E14 9SR
Tel: 0207 964 1486 | Fax: 0207 964 1487 
Email: mike.ward@financial-ombudsman.org.uk



From: Scarlet Maguire Gallery [mailto:scarletmaguire@yahoo.com] 
Sent: 05 October 2011 15:44
To: Ward, Mike
Subject: RE: Your complaint about UKG (Our ref: 6416403)


5th Oct email from Mike to Jo: Thank you for your email. Just to clarify, although I would regard the cases against CHA and UK General as separate, I cannot legally advise you as to any potential effect the latter would have on the former. That is for you and your legal advisers to consider.
Unfortunately I cannot guarantee a swift resolution to the complaint. The case is not straightforward and you have raised a number of further issues, which I have to consider. As I said, I assume you have nothing further to add, although if you do I would appreciate receiving this by the end of Friday 7 October 2011 at the latest.

If I am unable to provide you with a favourable outcome by reason of eligibility or otherwise, you will have the right to refer that to an ombudsman for a final decision. I would have no control over the content of that final decision and the matter would be looked at afresh.

                  Perhaps I might also reiterate for the sake of completeness that this complaint does not and could not involve the Society of Lloyd's or any of its underwriters. The lead insurer is UK General Insurance (Ireland) Limited and this is the only insurer we could consider a complaint against.

I will deal with your additional points as soon as possible and hope to be in a position to do that by 4 November 2011.
7th Oct Jo to Mike email: You say the RSA policy was for the landlord only but it is listed that this is a combined policy with the UKU buildings insurance and as such states commercial premises as covered and forms an integral part of the policy.
It is further noted that although commercial properties are on the schedule there seems to be a two page 'note' added in on page 210 and 211. I would suggest this since it has no lettering that seems authentic at the foot of the page has been added by solicitors after the event. One cannot throughout the policy schedule in a leaseholder and then some peculiarity that serves no real purpose in the landlords definition which is not a legal definition, i.e a leaseholder is not a tenant and has responsibility for the building by paying insurance for it unlike a tenant. I therefore conclude this is corrupt.
It is further noted that the building in question throughout has to date in ten years, 'no fire certificate' which invalidates the policy.
Also can a loss adjuster legally write the defendants surveyors witness statement?
Finally and most crucially the legal costs can be paid by the insurer to the party who has suffered as a result of defects in the building to investigate, defend and pursue cases.
7th Oct. Jo writes email: On the liability cover on page 157 of the first bundle I sent you you'll see; Insured 2) Associated Companies of Community Housing Association Limited details of which have been lodged with the Company. Then on page 168 (under Liability Insurance page 167) point 6. Business shall mean that which is specified in the Schedule.
Marie Livings from FARR PLC on request from me sent me a letter stating I was a 'noted interest'.
9th Oct. Jo writes final email to Mike before Monday deadline. Dear Mike,

I was worried when you said 'except for narrowly definable circumstance' I was covered by the policies so I have double checked the insurance file (IF) this weekend, I hope this helps. 

1) You say we were the 'claimants' the insurers put 'solicitors'/ a legal firm onto us on the 3rd Dec 2007 during what was initially an investigation into liability. Page 155 of (unheard case of insurers) UCOI file. From then on we 'defended' the claim to them, their representatives including the landlord who they were acting for. This was the start of legal costs, it was action to legally defend a claim without a legal action commencing from us.2

2) Liability was never admitted or denied, breaching pre-action protocol page 205 UCOI. 

3) As a leaseholder who paid a specific 'building insurance premium' (a separate and distinct bill with Excesses which were always paid for by us the lessee which would not be allowed if we were not a distinct building insurance policy holder and would breach the terms of our lease) evidence of which can be sent to you, we were an 'insured' party all covers therefore apply to us as if we were insured as a separate policy. See page 79 of first 'insurance file' IF covers sent to you.

4) There are a number of reference points that I will as a result of the above IF draw to your attention:

Page 5. Commercial Property - Shops - In connection with the Business of the policyholder

Page 6. Full Rebuilding Costs - including the cost of complying with local authority and or other statutory requirements

Page 7 Property insured (Commercial Property where required) The terms of the policy apply separately to each property as though each had been insured by a separate policy.

Page 9 If the property is made inhabitable by any cause insured We will pay the: Rent, Reasonable additional costs of comparable accommodation incurred by the policy holder

Page 12 Search and Trace - locating the source of damage to the property insured caused by escape of water.

Page 13 We will pay for cost of repairing damaged parts including the cost of complying with building regulations.

If property insured has not been kept in a good state of repair we will pay for cost of repair or replacement

Page 15 We will not pay for Loss or damage resulting from Faulty Workmanship, defective design

Page 18 POL All of this page especially the legal title and 7 years which leaves claim open

Page 19 Defective Premises. Any liability under paragraph 1b in respect of which policy holder lessee is entitled to indemnify from any other source (HAPM insurance for structural defects)

We will also pay defence costs and other expenses incurred 

Page 20 Denial of access (fire escapes and electricity cupboard) This policy extends to include any claim resulting from interruption of or interference with the business in consequence of accidental loss destruction or damage to any property in the vicinity of the insured premises which prevents or hinders the use of or access to the insured premises whether the insured premises or property in it is damaged or not.

CROSS LIABILITY CLAUSE

If more than one policyholder is named in the schedule each policy holder so named shall be considered as a separate and distinct entity and cover shall be construed as applying to each policy holder as though each had been insured separately

Page 20 Notice of Interests - The interest of leaseholder is noted 

Page 21Conditions which apply to the whole policy 1. 2. 3. 5. 8. (For the avoidance of doubt as to whether we are a policy holder) the Company agrees to accept the designation under which such property has been entered in the policy holders books.

Page 26 Notify us immediately

We may take over and conduct in the name of the policyholder exclusive control in settlement of any claim

We may also start legal action/proceedings

Fraud benefits thereunder shall be fortified 

Page 27 Policyholder will not be prejudice by the actions of leaseholders (same applies)

Subrogation All neccessary steps for enforcing rights (did this mean possession as dates for rent payment were changed to repossess both shops on same day)

Page 41 Combined Liability - 2a Legal liability for damages and costs in respect of Property damage, Nuisance, Trespass or interfrence with right of AIR

Page 42 6. Excess POL Principle Extensions Compensation for court attendance £500 per day for directors which we were

Page 43 Warranties/Conditions Fire Certificate is to be kept in force for any premises. There are none.

Page 44. The Business Commercial Properties & leasholders each that deem to be noted

Page 92 Insured Interest 1. property 2. Business Interruption loss of rent and/ or alternative accommodation 2005/2006

Page 102 Commercial Property Shops which we have been notified

Contents

Page 105 We will not pay for wear and tear or damage caused by the policyholder or their employees, we will pay for loss or damage caused by escape of water

Page 107 This section provides cover for accidental damage for which you are legally responsible to pipes

Page 109 Search and Trace caused by escape of water

Page 111 Contents paid for in water escaping

Page 130 2005 paid the premium (or our part)

Page 157 RSA combined liability Insured associated companies lodged with the company (noted interest lodged)

Page 158 Section 6 Excess POL Primary Policy is UKU 

Page 162 Combined Liability Insurance - Schedule which forms an integral part of the policy

Shall be considered one document

Page 164 Irrespective of the number of Persons Entitled to Indemnity under this policy shall be treated as one party or legal entity so that there will be only one single contract of insurance between the company as one party and all the persons entitled to indemnity as the other party 

Page 166 General Conditions 2a maintain all buildings. b. any defect or danger to be made good 3. Every letter in connection with circumstance forwarded to company. Written notice given to Company. Company has right to defend, settle or prosecute any claim in the name of the insured.

Page 168 Business shall mean that which is in the specific schedule

Page 170 Attending court as a witness daily rate £500

Page 171 Public Liability 1 C) Nuisance - Trespass - Interference with Easement right of Air 

other than legal liability for damages which result from a deliberate act or omission of the insured or natural consequence of ordinary conduct 

Page 174 Extensions to Section 2a 1. Cross Liabilities If the insured compromises more than one party the company will provide indemnity to each in the same manner and to the same extent as if a separate Policy had been issued to each

2. Compensation for court attendance per day Directors £500

Page 179 A) Legal costs and other expenses B) Costs awarded against the insured Part B) 1. The landlord not covered 2. Same.

Page 180 The company shall pass notification to First Assist Group LTD they did not.

Page 183. Section 5 JCT The company will indemnify the insured parties in respect of any expense liability loss claim or proceeding, sustain by reason of damage to property, or by reasons of carrying out works. 1. Provided that; the insured parties contribution will be payable before the company is made liable 2. pay all costs in defence, investigation or settlement

Exclusions to section 5 1. A. Caused by the neglect omission or default of the contractor (landlord not covered as breached terms on all counts as proved by notice) 

Page 184 Extension to section 5 A) Insured parties indemnified by reason of damage to any property happening during period of insurance B) Pay all costs in Defence or Investigation or settlement of claims

If the policy is not renewed the period of insurance under JCT shall extend to the completion date including maintenance or defects (floor)

Page 185 Conditions applicable to Section 5 (regardless of insured's contributions)

the defence or settlement of any claim to prosecute any claim in the name of the insured parties singly or jointly 

Page 186 1. Excess POL. in accordance with the terms of the Primary Policy, which shall run concurrently with this policy 3. in addition where the primary policy provides. Provided that; in the event of the underlying insurers exercising a right under their policies to pay the limit of Indemnity, the company will provide indemnity for costs and expenses for which underlying insurers would have been liable had they not exercised that right B) in the event of total exhaustion continue this policy in force as the Primary insurance subject to the terms of this policy

Page 190. Limit of Indemnity shall be the maximum amount payable by the company in the circumstances stated in the schedule or elsewhere in this policy irrespective of the number of persons entitled to indemnity under this policy in respect of any insured event or during any period of insurance.

all persons entitled to indemnify under this policy shall be treated as one party or legal entity so that there will be only a single contract of insurance between the company as one party and all the persons Entitled to indemnify as the other party.

Page 192 General Conditions 2 A) and B) and 3 all breached by the landlord (3rd Party).

Page 193 Persons entitled to indemnity shall mean 1. A) The Insured 6) Business shall mean that which is specified in the schedule and conducted solely from premises in Great Britain and shall include C) fire and security and security services (security shutters and fire exit part of the claim) 

Page 194. 8. Event one occurrence or series attributable to one source or original cause 9.) Insured's Contribution shall mean the amount specified in schedule which the insured agrees to pay

Page 195. The insurance provided by section 1 is on a costs inclusive basis whereby costs and expenses of the claimant and the costs and expenses (incurred by the company or with the company's written consent) of any person Entitled to Indemnify are included within the limits of indemnity stated in the schedule

Page 200. Extensions to Section 2 ( each of which is subject otherwise to the terms of this policy) 1 Cross liabilities If the insured compromises more than one party the company will provide indemnity to each in the same manner and to the same extent as if a separate policy had been issued to each.

NOT PART OF THE POLICY - 

Page 211 Community also own some shops, etc which they rent out to tenants. Although Community call these people Leaseholders - ( This needs checking badly worded derogatory and possible not written by the insurers at all so needs double checking!)

Community pays the £1000 excess and we should deal with - (same as above) We as lessee's have always paid excess on all claims. 

Page 261 Zurich over 2005/2006 Part C - Business Interruption Section 2. Page 14.

Odd reference August 2002 at bottom of page - Needs clarification. Some policies are kept in existence for years or are standard.

Page 262. Insured paying the first premium the Insured will provide insurance in terms of the policy in respect of injury, loss, Damage or liabiltiy for injury or Damage as defined.

The schedule and certificates form part of and should be read in conjunction with this policy

Page 263 Consequential Loss - Loss resulting from interruption of interference with the BUSINESS carried on by the INSURED at the PREMISES in consequence of the DAMAGE to the Property used by the INSURED at the premises for the purpose of BUSINESS

Contents - Tenant's improvements, alterations and decorations.

Page 264 (d) Personal belongings of any Director, Employee, Volunteer, customer or visitor but only for an amount not exceeding £1,000 in respect of any one person 

Damage Material loss or damage

Insurer Zurich Insurance Company

Premises The premises specified in the schedule owned and/or occupied by the INSURED for the purposes of BUSINESS

Page 266 Each part of this policy is declared to be a separate contract

Warranties Non-compliance with any such warranty insofar as it increases the risk of Damage will be a bar to any claim 

Page 267 Claims procedure (a) Action by the Insured. On happening of any event which could give rise to a claim or on receiving verbal or written notice of any claim the Insured will: as soon as possible give notice to the INSURER (b) Rights of the Insurer. The Insurer may take over in the name of and behalf of the Insured the absolute conduct and control of all negotiations and proceedings (c) Subrogation The Insurer may take legal proceedings in the name of the Insured - for its own benefit any right of recovery of the Insured against other party and this condition will be evidence of the Insurer's right so to do whether before or after the Insured has received an indemnity. 

Page 270 Part A Material Damage Section Definitions Damage Accidental Damage by any of the Insured  perils specified in the schedule

Page 271 Section 2 Cover In the event of Damage to the Property insured specified in the schedule and occurring at the Premises during the period of insurance the Insurer will pay to the insured the value of the property at the time of the Damage or the amount of such Damage or at the insurers option replace, reinstate or repair the Property or any part of it 

Rent The insurance on rent applies only whilst any part of the Building is sufficiently damaged to render it unfit for occupation.

Drains and Gutters - Cleaning and/or repairing drains and/or sewers and/gutters

Page 272 Tenants Subrogation Waiver - (b) the tenant contributes to the cost of insuring the buildings against the peril which caused the damage

Trace and Access In the event of Damage arising following the escape of water this insurance is extended in addition to the Sum insured to pay costs incurred in locating the source of Damage, effecting repairs and general making good

Mortgages, Freeholders and Lessors Clause Any increase in damage resulting from an act of negligence will not prejudice the interest of the lessor 

provided that such risk is without their knowledge or authority

Tradesmen may be employed to effect repairs or minor structural alterations in the building without prejudice to this insurance

Page 273 Work in Progress Section 2 (b) Existing buildings and contents including any period for maintenance or making good defects

Section 3 - Cover In the event of damage to the Property insured the Insurer will pay to the insures the value of the property at the time of Damage

Section 4 Other Persons Indemnified The Insurers agree that: (a) all interests in the insurance by this part will be vested jointly in the Insured

Page 274 - Professional Fees - The insurance by each item on Works in Progress include an amount in respect of architects, surveyors, legal and consulting fees necessarily and reasonably incurred in the reinstatement or repair of Property insured consequent upon its Damage but not for preparing any claims

Exclusions (a) (i) The insurer will not be liable for the cost of repairing or reinstating any work executed as a result of it's own defective design

which was defective

Page 275 Part C - BUSINESS INTERRUPTION section 1 Special Definitions 
Annual Gross Revenue The Gross Revenue during the 12 months immediately before the date of the incident

Gross Revenue The money paid or payable to the INSURED for goods sold or for SERVICES rendered in the course of the BUSINESS at the PREMISES, excluding rent for housing premises

Incident - Damage to property used by the Insured at the premises for the purpose of BUSINESS

Indemnity Period The period during which the results of the BUSINESS are effected in consequence of the Incident, beginning with the Incident and lasting not longer than the maximum Indemnity Period specified in the Schedule + Office Buildings + Standard Gross Revenue

Notes 2. Provision will be made for the trend of the BUSINESS and for variations in or other circumstances, either before or after the date of the incident, which affect the BUSINESS or would have affected the BUSINESS had the incident not occurred, and the figures for Annual Gross Revenue and Standard Gross Revenue adjusted to represent as nearly as reasonably practicable the results which would have been obtained during the relative period after the Incident if the Incident had not happened.

Section 2 - Cover (a) Additional Expenses for the sole purpose of avoiding or diminishing the interruption of the interference with the BUSINESS

Page 276 Provided that (i) insurance in force at the time of the incident covering the interest of the Insured in the Property at the Premises against such damage

and 

(ii) Payment has been made or liability admitted for such damage (or payment would have been made or liability admitted for such damage but for the proviso excluding liability for losses below a certain amount)

Alternative Trading If during the Indemnity Period goods are sold or services rendered elsewhere than the premises for the benefit of the business either by the insured or by others on behalf of the insured the money paid or payable in respect of such sales or services will be brought into accounting in arriving at the gross revenue during the indemnity period

Basis of Claim settlement - (a) in respect of Additional Expenditure (i) additional costs incurred in order effectively to continue administration and maintain services including fitting of out temporary premises, costs of removal, hiring of vehicles, plant, and machinery and incidental expenses relating thereto (ii) increased costs incurred for rent, rates, taxes, lighting, heating, cleaning and insurance due to the enforced occupation of temporary premises (iii) legal, clerical and other charges incurred in the replacement or restoration of deeds, plans, specifications, documents, books of account, card indices and other office records less any sum saved during the indemnity period in the insured's normal expenditure which may have been affected in consequence of the incident

(b) (ii) In respect of an increase in Costs of Working: the additional expenditure incurred solely to avoid or diminish the reduction in Gross Revenue which but for that expenditure would have taken place during the Indemnity Period in Consequence of the Incident, provided that such additional expenditure: (1) is necessarily and reasonably incurred

Page 277 Professional Accounts - Any detail contained in the Insured's business books required by the Insurer for the for the purposes of investigating or verifying any claim may be produced by professional accountants if at any time they are regularly acting as such for the Insured and their report will be prima facie evidence of the details to which such reports relates. Te Insurer will pay to the insured the reasonable charges payable to its professional accountants for producing such evidence and reporting to the Insurer and the Insured that such details are the liability of the insurer as specified

Section 4 - Special Circumstances 
1. Any loss as insured by this Part resulting from interruption of or interference with the Business in consequence of the Damage to the Property at the under noted situation within the territorial  limits will be deemed to be an incident: (a) any generating station or sub-station of any public electricity supply undertaking (b) any land-based premises of any public gas supply undertaking or any natural gas producer linked directly to them (c) any water works and pumping station of any public water supply undertaking (d) any land based premises of any public telecommunications undertaking from which the insured obtained electricity, gas, water or telecommunications services (e) in the vicinity of the Premises which prevents or hinders, the use of or access to the Premises excluding any Damage to the Property of any supply undertaking to the prevents or hinders the supply of services by an electricity, gas, water or telecommunications undertaking to the premises
2. The insurance by this part is extended to include loss resulting from interruption of or interference with the BUSINESS carried on by the insured at the Office Buildings in consequence of: (a) (ii) any discovery of an organism at the office buildings likely to result in the occurrence of a Notifiable Disease (iii) any occurrence of a Notifiable Disease within a radius of 25 miles of the Office Buildings and the discovery of vermin or pests at the office buildings (c) any accident causing defects in the drains or other sanitary arrangements at the Office buildings on the order or advice of a competent local authority (Environmental Health)

Page 278 Special Provisions: (b) for the purposes of this Special Extension:  (i) Indemnity Period will mean the period during which the results of the BUSINESS are affected in consequence of the occurrence, discovery or accident, beginning with the date from which the restrictions on the Office Buildings are applied (or in the case of (d) above the date of the occurrence) and ending not later than the Maximum Indemnity Period thereafter. Maximum Indemnity Period will mean three months. 

Page 279 Insured Perils 2. (a) Damage or Consequential loss arising from (i) confiscation, requition or destruction by order of the government or any public authority (ii) cessation of work (c) Consequential Loss arising from deliberate erasure, loss, distortion or corruption of information on computer systems or other records, programs or software 6. Escape of water from any tank, apparatus or pipe 10. Loss of rent/temporary accommodation 11. Accidental damage to supply pipes and cables. Accidental damage to fuel oil supply pipes, water and gas supply pipes, sewerage and drainage pipes.

Page 280 15. Theft or attempted theft, other than: (c) involving parting with title and possession of any Property insured if induced to do so by fraud, trick or false pretence 

The Insurer will also indemnify the Insured for the cost of: (i) repair of Damage to Buildings caused by theft or attempted theft of the PROPERTY insured where the Insured is legally responsible for the cost of repairing such Damage

16. Subsidence or Ground Heave of any part of the site on which the property stands or landslip excluding: (b) Damage or Consequential loss caused by or consisting of: (iv) defective design or workmanship or the use of defective materials (c) Damage or consequential loss which originated prior to the inception of this cover (d) Damage or consequential loss resulting from (i) demolition, construction, structural alteration or repair of any Property 

17. Accidental Damage being all risks of Damage to the Property insured excluding: (b) Damage or Consequential loss caused by latent defect, gradual deterioration, wear and tear, its own faulty or defective design or materials but this will not exclude subsequent Damage or Consequential Loss which itself results from the cause not otherwise excluded

Page 282 Part D 'All Risks' Section 1 - Cover In the event of accidental Damage to the Property insured specified in the schedule arising during the Period of Insurance within the territorial limits the Insurer will pay to the insured the value of the Property at the time of the Damage or any part of it provided that the liability of the Insurer will not exceed: (a) in the whole the total sum insured.

Section 2. Exclusions The insurer will not be liable for: (b) DAMAGE caused by: (i) latent defect

Page 284 Additional Cover - 1. European Community Legislation, or 2. Building or other Regulations or Bye-Laws of any public authority (thereafter referred to as "the stipulations") in respect of Damage to Property insured - Undamaged portions Excluding: (a) the cost incurred in complying with the stipulations: (i) in respect of Damage occurring prior to the granting of cover by this extension (iii) under which notice has been served upon the insured prior to the happening of the Damage (iv) for which there is an existing requirement which has to be implemented within a given period (b) the additional cost that would have been required to make good the Property lost, distroyed or damaged to a condition equal to its condition when new had the necessity to comply with the stipulation not arisen (c) the amount of any charge or assessment arising out of capital appreciation which may be payable in respect of the Property or by the owner thereof by reason of compliance with the stipulations

Special Conditions 1. The work of reinstatement must be commenced and carried out without unreasonable delay and in any case must be completed within 12 months of the Damage or within further time as the insurer may allow (during the said 12 months) and may be carried out upon another site (if stipulations so necessitate) subject to the liability of the Insured under this extension not being thereby increased. 2. If the liability of the INSURED under this Part other than from this Additional Cover shall be reduced by the application of any of the terms and conditions of this part then the liability of the Insurer under this additional cover shall be reduced in like proportion. 3. The total amount recoverable under any item of this part in respect of this Additional Cover shall not exceed: (a) in respect of the loss, destroyed or damaged Property: (b) in respect of the undamaged portions of Property (other than the foundations) 15% of the total amount for which the Insurer would have been liable had the property insured at the premises where the Damage has occurred been wholly destroyed. 

Page 285 Non-Invalidation This insurance will not be invalidated by any act omission or by any alteration which increases the risk of Damage without the authority or knowledge of or beyond the control of the insured, provided that immediately the insured becomes aware of the increased risk of Damage notice is given to the Insurer and any additional premium paid.

Professional Fees The Insurance by each item on Buildings and/or Contents includes an amount in respect of Architects', Surveyors', Legal and Consulting Fees necessarily and reasonably incurred in the reinstatement or repair of the Property insured consequent upon its damage but not for preparing any claim. The amount payable under each item will not exceed in total its Sum Insured.

Page 287 Special Conditions Designation For the purposes of determining where necessary the heading under which any Property is insured, it is agreed to accept the designation under which such Property has been entered in the Insured's books.

Other Interests It is agreed and understood that where the Insured so intend the interests of parties other than the Insured in this insurance are admitted, the nature of such interests to be declared in the event of loss.

Page 288 Exclusions 1. the Excess will apply to each and every loss in respect of each separate Premises. 2. Pollution or Contamination Damage to Property or Consequential Loss caused by or resulting from pollution or contamination but this will not exclude Damage or Consequential Loss not otherwise excluded, caused by (b) any of the insured perils 1-15 if insured which itself results from pollution or contamination 3. This exclusion does not apply to Damage or Consequential loss by theft if the Insured Perils 15 is specified in the schedule.

Page 289 4. (a) Damage to any Property more specifically insured by or on behalf of the insured (b) consequential loss of any kind other than loss of rent if insured.

Page 291 (c) The insurer's liability for Damage or Consequential Loss as set out in the sub-clause 2(a) above shall not exceed in respect of all losses arising out of any one occurrence and in the aggregate in any one period of Insurance the lower of either any limit of Liability or Sum insured stated in these parts or the Limits shown against the items in (i) to (iii) below (where insured by these Parts) after the application of all provisions of this Policy including any contributions by the Insured.  (ii) (1) Houses and blocks of flats including associated loss of rent £2,500,000 (2) The costs of Alternative Accommodation and Rent in respect of Buildings described in (ii) (1) above £2,500,000 (iii) (1) Business Interruption including Rent Receivable not associated with houses and block of flats £100,000 (d) For purposes of sub-clause 2(c) above if any block of flats is partly occupied for retail or other commercial purposes the limits shall apply as follows: (i) where the proportion, designated for residential use is at least 80% of its Sum Insured the above Limit(s) of £2,500,000 shall apply to the residential portion and additionally the £100,000 limit(s) specified above shall apply to the remainder

Page 292 Special Conditions 1. The liability of the Insurer for repair or restoration of Property which is only partially damaged will not exceed the amount which would have been payable had such Property been wholly destroyed. 3. Any additional amount which may be payable solely due to this Reinstatement Condition will be paid only if: (a) Reinstatement commences and proceeds without unreasonable delay 4. (b) All the terms and conditions of this Part will apply: (b) where claims are payable as if this Reinstatement Condition had not been incorporated. 

Page 293 (c) When the Buildings continue to be unoccupied after 120 days

Special Definitions Declared Value the insured's assessment of the cost of reinstatement of the Property Insured arrived at in accordance with the Reinstatement provisions at the level of costs applying at the inception of each Period of Insurance (ignoring inflationary factors which may operate subsequently) together with, insofar as the insurance by the item provides, due allowances for: (a) the additional cost of reinstatement to comply with European and Public Authority requirements (b) Professional fees

Page 294 B. Event The Insurance will not be liable for the amount of any deductibles specified in the schedule in respect of the total of all losses arising from any one occurrence as ascertained after the application of all other terms and conditions of the relevant Part(s) including Average. For losses attributed separately to Insured Perils 5 or 6 an occurrence means any separte period of 72 consecutive hours during the currency of the insurance. 

Page 297 Public Liability Part F - Public Liability Section 1 - Special Definitions Financial Loss Loss or Damage other than arising from Injury or Damage to Property.

Pollution and Contamination (a) All pollution or Contamination of Building's or other structures or of water or land or the atmosphere and (b) all loss or Damage or Injury directly or indirectly caused by such pollution or contamination. Products. Goods (including containers, packaging, labeling and instructions) sold, supplied, repaired, altered, treated, erected or installed by the Insured in connection with the Business

Page 298 (d) (i) in defending any claim for damages

Section 3 - Financial Loss. The Insurer will indemnify the Insured in respect all sums which the Insured may become legally liable to pay damages and claimants cost and expenses for Financial Loss arising as a result of a negligent act or accidental error or accident omission committed or alleged to have been committed, within the geographical limits, by any employee or volunteer in, or about, or in consequence of, their duties arising out of the Business occurring during the period of Insurance. 

In addition the insurer will pay all costs and expenses incurred with its written consent: (i) defending a claim. Exceptions The insurer will not be liable for Financial Loss: (a) caused by the failure of the Insured to fulfil its obligations under any contract entered into with the claimant. Section 4 - Indemnity to Other Persons. The Insurer will indemnify under the terms of this Part at the Insured's request: (d) any principle for whom the insured is or has been carrying out work but only to the extent required by the contract for work (e) (1) is not entitled to indemnify from any other source

Page 343 Legal Defence (4) The Insurer will represent the Person Insured in appealing against the imposition or terms of any Statutory Notice issued under legislation affecting the Business (The Section 25 Notice and Eviction) 

Section 5 Property Protection and Bodily Injury. (A) Property Protection. Insured Incident. The Insurer will negotiate for the Insured's legal rights in any civil action relating to Property which is owned by; or the responsibility of the Insured following: (1) any event which causes or could cause Damage to such Property; or (2) any Nuisance or Trespass

Page 344 Exceptions. (5) defending a person's legal right other than in defending a counter-claim (Section 25 Notice to double the rent unless we fixed the floor (an insured risk) and an improper inducement, then illegal eviction, before any emergency court action took place to get an injunction which was upheld upon the issues of disrepair being insured risks and it being ordered that that was to be dealt with in the county court proceeding which it was further ordered were to be dealt with very expediently, no rent was to be paid further by order and Quiet Enjoyment (including the fixing of outstanding repairs) was also ordered.

Page 345 Exceptions The insurer will not provide indemnity in respect of or arising from or relating to: (1) any claim relating to: (ii) a lease, licence or tenancy of land or buildings other than a dispute with a professional adviser in connection with the drafting of a lease, licence or tenancy agreement

Page 346  Debt Recovery - Insured Incident (d) the insurer has the right to select the method of enforcement, or to forgo enforcing judgement if the Insured is not satisfied that there are, or will be, sufficent assets available to satisfy judgement. Exceptions The Insurer will not provide indemnity in respect of or arising from or relating to (1) the recovery of money and interest due from another party where the other party intimates that a defence exists
31st Oct. Mike Ward write a letter to Jo Flores and Chantal Cracy. To recap:
The claim was against the landlord the policy provided no benefit to you.
I feel the policy only provided liabilities attaching to the landlord so you were not a policyholder.
You are not eligible to bring a complaint against the insurer who owed you no duty as a third party.
You feel as a joint policyholder UKG was under a duty to recover your losses, the same duty as the landlord and it ought not to have taken sides with the landlord to the detriment of the other.
I do not dispute that you might also be a party entitled to benefit under the policy and a building claim was in fact paid directly to you.
The section of the policy states; ‘We may take over conduct in the name of the policyholder with complete and exclusive control the defence and settlement of any claim”. We may also start legal action in the name of the policyholder (but at our expense and for our own benefit) to recover from others (except those who do not have the benefit of their own insurance cover in respect of their liability) compensation in respect of anything covered by this policy”. I both cases the word “may” owes no duty and the business interruption was not covered anyway. Plus the benefit of such an action would be for the insurers. It means where the insurers pay out they may pursue the party responsible for the loss.
I do not agree the section 25 notice issued by the landlord would have triggered the policy and forced UKG to defend the action against you by the landlord for possession. Any desire for the landlord to take possession would not have afforded you protection covered by the policy.
The damaged flooring you say remained outstanding at £5,000 and the insurer refused to pay it until the liability claim was concluded. I see no reference to this and it may have been because of continuing risk of further damage. I can see no outstanding issue between you and the loss adjuster Alan Hines in 2005/2006. The floor does seem to surface in 2008 but it seems the landlord was dealing with this and not the insurer.
You mention that RSA and UKG policies were combined. There is mention of the word combined to describe the cover offered but they are separate policies. UKG’s policy is for lessees as policyholders, whereas the RSA’s is for the landlord and companies logged with RSA. This has no impact on who was strictly the third party claimant and who was the defendant policyholder seeking indemnity from the insurers. Overall the losses you claim were uninsured. You wish to transform your position as a third party to one where the defendant insurer owes you a direct duty or one of care or one under the policy contract. I cannot find such a duty for the purposes of business interruption.
UKG was entitled to deal with you as an unconnected party to the policy.
The policy could only defend the landlord and they are the only ones entitled to make a complaint to FOS.
The UKG’s cross liability clause does not in my view support you. This indicates that each policyholder shall have cover construed as applying to them as if they are insured separately.
UKG was entitled to defend its policyholder and no co-extensive duty to all policyholders existed.
The action to regain possession does not bring the policy into play, it does not provide for defence of possession proceedings or provide compensation for possession.
Having considered the further comments you have made I have to say I do not consider you an eligible complainant I am unable to recommend that the merits of your complaint can be considered against UKG.
6th Nov. Email from Jo to Mike: I do despair when we go around the houses with this complaint as meanwhile I suffer on a daily basis financially and psychology and am desperate to be reinstated back into my businesses. 

It is clear to me that by just giving you one, the official insurance documents files 
and secondly 
the correspondence between ourselves, the landlord and the insurer that you simply have no real grasp on the case. That however is hardly surprising since there are in total 22 bundles produced for the courts.

It is with this in mind that I wonder whether you would be so kind as to come to my house and then at least we can address points on the spot making this now arduous process of back and forth emails less time consuming and stressful.

To address some of your points however:

1.) Graham Ward RSA met with us directly and stated the interruption was eligible for POL part of the building insurance policy so there is no dispute we could claim for losses.

2.) I perfectly understood the cover that was in place from 2005 as I had requested a copy of the policy. Although my first correspondence with the broker FARR PLC clearly requested that the insurance act in my interest 'equally' as a policy holder to recoup my losses, I understand from our conversation that the insurer is perfectly entitled to make a 'commercial decision' to ignore me. I have never used the word 'duty' I simply wonder if this is acceptable under FSA guidance in terms of fairness, David vs Goliath somewhat!

3.) I gave you as stated above all the insurance documents given to me (mostly at the last minute before the court case last year) and when I made the complaint to you I did say that I wasn't entirely sure who the complaint was directed at, so I find it incredulous that you use UKG all the time when clearly some other insurer was at fault. For some of the times that I complain about, 'Zurich' were the ones who were covering the building for example 2008 the time of the floor. I simply am not getting your thrown together logic?!

4) Although you mention several time actions 'may' be taken by the insurers for their benefit only, to recover losses, it just seems a bit strange that the insurers have wasted more money trying to get 'rid' of this eligible claim instead of just paying for the damage so where is the logic in that? 
They will too keep on and on and on spending, as it is a building claim which certainly does not satisfy your opinion that our losses are not eligible as they were losses due to faults in the 'building' and nothing else!
Insurance companies do not 'benefit' for 'themselves' they only 'recover' when generally they have had to pay out!! It would be interesting to later find (since they have substantial evidence because of the court case) they have at a later stage recovered their losses from the landlord. 

5.) The Section 25 (an improper inducement to fix the floor or they would double our rent) was a vicious act by the landlord but UKG still should have fixed the floor as it was covered as 'consequential damage' which they did not dispute, so why didn't they? I don't know what you mean by a 'continuing risk of further damage' please explain this?

6.) Trespass is covered in the 2008 policy.

7.) Who are you saying is the third party in this complaint?

8.) What losses exactly do you mean were uninsured?

9.) Why if Marie Livings from FARR PLC wrote to us (and this has been accepted by the courts) and said we were a policy holder are you disputing this?

10.) Why do you always say UKG through Alan Hines dealt with the claim promptly is that a relatively speaking comment comparing worse cases?

11.) A strained construction has been placed on events, is really insulting what do you mean?

12.) I am going to have to check with a solicitor about cross liability but why aren't you absolute in your views?

Finally UKG were forced to defend a claim that they had already washed their hands off to both parties. They owed no duty to the landlord because they breached the terms of their own insurance to which we had joint cover but they should have in our opinion recouped our losses as a separate policyholder entitled under our buildings policy.

I look forward to a possible date to trash this out.
7th Nov. Email from Mike: I will look at the your points shortly, although I believe this case is now better referred for an ombudsman's final decision as to your eligibility to bring a complaint directly against the insurer. That means the decision will be taken out of my hands and once made, this will represent the final step in our process.

                  I am sorry if you feel insulted by my reference to 'strained construction'. This is an ordinary term used in these types of situation and was not meant to insult anyone. In my view, the way the policy reads is clear, but to achieve the result you seek, I believe the policy cover and the circumstances of the loss need to construed in a way which I do not believe is correct. I feel I do have a grasp of the case, although my view will not now decide the outcome. I hope to be contacting you within the next few days to commence the ombudsman's final decision process.
          27)   As you stated in your letter of the 31st Oct I would have 14 days to respond to your letter. I only received it on the 4th   November and the email I sent to you I drafted immediately after I read your letter suffice to say I have not entirely addressed your letter point by point. I would like to take the opportunity to do that and so I will need 14 days to do so.

In reference to my main question in the email as of yesterday I had an idea that we could meet at my flat in St Pancras as I have all the files and I would like to have a solicitor present to as I have found you have contradicted yourself so many times as to whether I am a policy holder or not it is very unclear.

Can you meet with me and a solicitor at my flat?

If not I will take some advice about what you have said but as I said I will need the 14 days offered to me to respond. In the meantime please feel free to reply to the points you wanted to.
         28) Thank you for your email.

The Financial Ombudsman Service does not conduct visits to consumers. However, I would be happy to speak with       your solicitor by telephone should you so wish.

You are correct that you have 14 days to respond. Beyond that, the ombudsman's final decision process gives 21 days to make any further submissions before the complaint will be considered afresh.

On Friday 11th Nov Jo Flores forwarded 50 emails explaining the corrollation of how the floor and the lack of air both ‘material damage’ claims for which Mike Ward states in his correspondence we are recognised as ‘policy holders’ for led to the businesses being closed down. How trickery was involved and how the strength of many interested parties in not paying and not admitting liability has left the situation still unresolved today. To add insult to injury now Mike Ward will not even comment on the floor or the structural defect. He will not open the case and has failed the so called independence of the ombudsman. DISP 2.7 is a joke another nail in our coffin which will prove to be another injustice.

I asked him yesterday (my mum died on Monday) answer the question on the material damage claim….

He did not!

I asked him three times and he finally said he is passing it to an Ombudsman… for a final decision… and that my dear will be the end.

I said I’d get a legal opinion (got until the 4th Dec) but no legal help so if you are a GOOD lawyer (and can give a free opinion on all this maddness) and can read what amounts to a novel reading all this and you live in a world of JUSTICE and have not gone mad like the bankers with your time and pay then email me jo@spaceshift.co.uk NOW!!!!!