The claimant was not entitled to recover under holiday insurance for a permanent disability which prevented her from doing all her usual pre-accident activities where her disability prevented her from carrying out at least one of those activities, namely horse-riding.Appeal by an insurer ('DT') from a judgment of HH Judge Darlow that the respondent ('M') was entitled to a payment of ?50,000 under a single trip holiday insurance policy. In 1998, M went on holiday to Turkey. She obtained insurance cover from DT, which in s.6(3) provided for a payment of £50,000 for a permanent physical disability which prevented the insured from doing any paid work or from doing all his or her usual activities. On holiday M was involved in a road traffic accident and suffered serious injuries from which she made a good but not complete recovery. She made a claim under s.6(3) on the basis that she had been left with a permanent disability which prevented her from working and from doing her usual activities. The judge held that M was entitled to recover on the basis that she was prevented from carrying out at least one of her pre-accident activities, namely horse riding, and was therefore unable to pursue "all" her usual activities within s.6(3), which on its proper interpretation meant any one or more of them. The judge construed the provision against DT ('contra proferentem') on the basis that it was ambiguous. DT appealed arguing that s.6 was clearly aimed at a disability radically affecting the insured's whole way of life not just preventing her from following one or more of her usual pre-accident activities.HELD: (1) The judge had erred in finding that the phrase "all your usual activities" was ambiguous and in applying the contra proferentem rule. (2) He had further erred in considering s.6(3) in isolation and dismissing the first limb (prevented from doing any paid work) as irrelevant to the issue of construction. (3) It was necessary to consider the words in issue together with the alternative first limb and in the context of s.6 as a whole. (4) Both limbs of s.6(3) required a broad range of serious consequences of the permanent disability specified in s.6(3) to entitle the insured to recover the lump sum. The two alternative limbs were intended to provide cover for broadly the same level of permanent disability. The all or nothing basis of recovery, coupled with the fact that the section did not elsewhere provide comprehensive personal accident cover, underlined the exceptional nature of the permanent disability for which it was intended to provide. On that basis there was nothing ambiguous about the second limb of s.6(3). (5) The second limb was intended to cover disability which prevented the insured from doing all significant non-working activities of a social, sporting, domestic or personal nature which constituted so substantial an intrusion on his way of life as to compare with an inability to pursue his normal occupation or one similar to it. "All" in the context did not mean "any one". (6) The case should be remitted to the judge for rehearing according to that construction to determine whether M had crossed the s.6(3) threshold.Appeal allowed.

[2003] EWCA Civ 1606

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