1. After the Fire A Major Loss Case Study for the Insurance Institute of Plymouth Paul Thomas ACII, FCILA, FUEDI-ELAE Major Loss Director, QuestGates

2. Format of Case Study  The Parties  Case Scenario  The Management of the Incident / Claim  Issues Considered in the Adjustment of the Claim

3. Who are the Parties Freeholder

4. Who are the Parties Freeholder as Owner/Occupier  Private house  Industrial unit  Office Freeholder as Landlord  Rents the property to a Tenant  Multiple occupancy tenants

5. Who are the Parties Multiple occupancy building Private residence flats - Leaseholders

6. The Parties  Freeholder owns the land  Leaseholders purchase the leasehold for a set sum for a set period (99 year or 999 year lease)  Leaseholders pay a ground rent, usually nominal, to the freeholder  Leaseholders (or freeholder) form a Management Company comprising all the leaseholders who elect from their number the Officers of the Management Company

7. The Parties Freeholders / Management Companies Managing Agents Leaseholders Tenants Letting Agents

8. The Parties  The grounds, exterior and common elements of the building need to be maintained and leaseholders obligations enforced as necessary  The freeholder can organise and manage this or the freeholder can grant a “Right to Manage” to the Management Company (RTM)  Where the Management Company has a RTM the Officers of the Management Co can organise this or can appoint a Managing Agent to represent them and undertake these tasks

9. Legal Relationship between Parties Freeholder / Management Company / RTM Management agreement Individual Lease Contracts Leaseholders Managing Agents No direct contractual agreement

10. The Insured Bristol Road Management Company The Insured Premises A four storey block of 28 one and two bedroom flats  The Management Company has contracted management of the block to Managing Agents  Leaseholders in residence  Leaseholders who let their flat to tenants

11. The Parties Freeholder Bristol Road Management Co. (RTM) Managing Agents Leaseholders (as occupiers) Leaseholders (as Landlords) Letting agent Tenants

12. The Insured Event  Fire originating in a top floor tenanted flat  Scope of damage  Issues  Management of the Claim

13. Scope of Damage

16. LEASEHOLDER TENANTLEASEHOLDER TENANT STAIRSLIFTLEASEHOLDER

17. Issues  Cause of fire  Whole block without power / lifts out of action / roof partially open  Managing agent moved everyone into hotels

18. Management of the Claim Major Loss Director Major Loss Surveyor Regional Adjuster Supported by:  QuestGates Concierge Team  Forensics  QuestGates vetted and approved suppliers (contractor, project surveyors, damage mitigation contractor)

19. Management of the Claim  Power to block restored / lifts recommissioned / common areas sanitised  All lower floor residents moved back in within 5 days  Seven top floor flats not habitable  “Top hat” the damaged roof. Reinstate ceilings / decor / electrics of top floor common corridor  Decontaminate three lightly smoked flats

20. Management of the Claim  Decontaminate two heavily smoked flats. Repaired fire damaged entrance doors  Flats habitable by week four post fire  Water / fire damaged flat had ceilings taken down and reinstated, electrics made good, redecorated etc. Flat habitable by week eight post fire  Gutted flat stripped out  Schedule of works for fire gutted flat and main roof tendered  Last flat habitable by week twenty two post fire

21. Issues in the Adjustment of the Claim  Managing Agents / Letting agent fees  Managing Agents decision to put all residents into local hotel accommodation  Asbestos  Effective decontamination of smoked flats only if contents cleaned as well  Pigeons

22. Issues in the Adjustment of the Claim  Tenant where fire originated left hospital with no forwarding address / contact details  Informal tenancy  Unlicensed alteration to fire gutted flat

23. Q & A

24. How were the Issues Resolved  Managing Agents / lettings agents fees  Alternative accommodation costs  Cleaning of flats (contents)  Pigeons  Clearance of tenants fire damaged possessions without approval  Loss of rent where no formal tenancy existed  Unlicensed alterations to flat reinstatement

25. Proximate Cause  “Proximate cause means the active efficient cause that sets in motion a train of events which brings about a result without the intervention of any force started and working actively from a new and independent source” [Pawsey v Scottish Union and National (1908)]  Proximate Cause – the “dominant” cause  Separate and intervening cause

26. Policy Definition of Insured Rent Rent Receivable  The money paid or payable to the Insured for accommodation and services provided as landlord (including service charges unless excluded by Endorsement) at the Premises shown on the schedule