Subrogation & Contribution

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Subrogation & Contribution follow on from Indemnity

Support the principals of indemnity

Apply to insurance which are contracts of indemnity

Do not apply to non-indemnity contracts

Principal of indemnity prevents insured recovering a greater amount from their insurers than the loss they have sufferred.

An insured may be in a position to claim more than twice for the same loss.

More than one policy - loss shared under principal of contribution

Entitled to indemnity under contact and a claim against another person/entity - law prevents making of a profit & achieving more than an indemnity

If insured claims from insurance they give up their right to claim from other person so leaving the insurers to claim payment from the other party

There are 2 definitions of subrogation

the leading case of Castellain v Preston preserves the principal of indemnity and the case of Burnand v Rodocananchi preserves the legal right or claim against some other person for the same loss.

Main purpose of subrogation is to prevent unjust enrichment and preserve the principal of indemnity and equity