High Court penalises Zurich for extraordinary conduct in a consumer insurance dispute

On 24 June 2025, His Honour Judge Hodge KC handed down a consequential judgment in Bellhouse & Anor v Zurich Insurance PLC [2025] EWHC 1551 (Comm) following judgment on the Claimants’ underlying application to strike out parts of Zurich’s pleadings and for summary judgment against it on those parts (Bellhouse & Anor v Zurich Insurance PLC [2025] EWHC 1416 (Comm)).

Although the Claimants only succeeded in striking out a minor limb of Zurich’s defence, HHJ Hodge awarded indemnity costs against Zurich in the sum of £82,290.40, due to its extraordinary behaviour which necessitated the application by the Claimants.

Background and the Underlying Judgment

The Claimants, Mr and Mrs Bellhouse, insured their home in Chiswick (“the Property”), and its contents, with Zurich Insurance Plc. Within the period of insurance and whilst contract works were being carried out at the Property, a fire broke out which caused substantial damage to the Property and its contents. The Claimants consequently made a claim against their home insurance policy with Zurich. Zurich sought to avoid liability on the basis that it would never have entered into the policy of insurance if the Claimants had not made a misrepresentation that they had no plans to carry out major works to the Property within the next 12 months. Zurich also sought to rely on a contract works exclusion in the consumer insurance contract.

The Claimants therefore issued a claim against Zurich in March 2024 for a declaration to the effect that Zurich is obliged under the insurance policy to indemnify them in respect of the claim. On close of pleadings the Claimants applied for summary judgment against Zurich in relation to certain specified paragraphs of Zurich’s Defence and Counterclaim (which they also sought to strike out) given that they were inadequately particularised, not least because they failed to explain how the alleged misrepresentation was made or relied upon, but also failed to plead any factual basis for applying the contract works exclusion. Despite the Claimants’ repeated requests over the course of a year, Zurich had refused to amend them.

In summary, and without going into the substance of any party’s submissions, HHJ Hodge KC held that the Claimants’ application must fail except in relation to one minor aspect of the contract works exclusion defence. The Judge found Zurich’s pleadings to be “overly long, rambling, and digressive” and suggested that “their very complexity and length were intended to conceal the lack of essential substance at their very heart”. Notwithstanding these scathing comments, the Judge held that the court should not strike out statements of case or enter summary judgment against a party without first providing them with an opportunity to cure any defects and/or omissions in the pleaded case.

It should be noted that the Judge was apprehensive in allowing Zurich the opportunity to add further to its lengthy pleadings, allowing it to further conceal its substance. Zurich was thus ordered to file pleadings of strictly no more than 6 pages in length.

Costs and Consequential Matters

Ordinarily, where the Claimants only succeed on a very limited part of their application, Zurich would appear to be the successful party for costs purposes – the general rule being that the unsuccessful party pays the costs of the successful party.

However, despite Zurich being allowed to maintain most of its pleaded Defence and Counterclaim, HHJ Hodge KC held that the Claimants were the successful party. Principally, this is because Zurich was only allowed to maintain its pleadings where it corrected serious deficiencies therein – i.e. if Zurich did not agree to amend, the Claimants’ application would likely succeed. Zurich submitted that whilst it was required to file further particulars, that is not what the application sought to achieve, the application sought the strike out and summary judgment of parts of Zurich’s pleadings, and save for a minor limb, that application failed.

However, HHJ Hodge KC agreed with the Claimants that this was not a sudden or opportunistic application by them; it was made after a year of requests by the Claimants that Zurich rectify the clear deficiencies at the heart of its pleaded case. Throughout that period, Zurich:

• maintained that its pleadings were not deficient;
• refused to amend or further particularise them; and
• failed to answer the Claimants’ reasonable Part 18 Request for Further Information.

Although Zurich sought to submit that the appropriate application for the Claimants to make would be one for an order on its Part 18 Request, the Judge shut this argument down, noting that “having received the answer, ‘There is no-one at home’, I do not consider that a litigant is obliged to knock on the same door again”.

HHJ Hodge KC accordingly found that Zurich’s extraordinary behaviour necessitated this application and that this case fell outside of the norm for consumer insurance disputes. He further noted that Zurich’s behaviour necessitated a vast and wholly unnecessary expenditure of costs by private individuals who were already dealing with the consequences of substantial damage to their home. Furthermore, it had significantly delayed the proceedings by putting the timetable for the case back by almost a year, diverting the parties’ focus (and resources) away from the underlying issues in the case and causing an avoidable drain on the court’s scarce resources. It was particularly noted that all this stems from the conduct of a well-represented and well-resourced insurer which “should have known, and acted, better”.

For these reasons, HHJ Hodge KC conducted a summary assessment of the costs on the indemnity basis to penalise Zurich for its dilatory conduct of the proceedings and to compensate the Claimants for the same. Accordingly, costs of £82,290.40 were awarded to the Claimants.

Analysis

This judgment sends a strong message to insurers about the importance of procedural fairness and clarity, particularly in consumer insurance disputes. While Zurich ultimately retained most of its pleaded case, the High Court’s decision to award indemnity costs against it underscores the judiciary’s intolerance for obstructive or evasive litigation tactics—particularly when deployed against individual policyholders already facing hardship.

For policyholders, this ruling is significant. It affirms that courts will scrutinise insurers’ conduct closely and will not hesitate to penalise behaviour that causes unnecessary delay, expense, or distress. The case also highlights the importance of clear and properly particularised pleadings from insurers, and the ability of consumers to challenge deficient defences effectively. Ultimately, this decision reinforces the protective ethos of consumer insurance law and should encourage more proactive and transparent engagement from insurers in future disputes.

Should you have any enquiries regarding this judgment or need guidance and support with an insurance claim or dispute, please reach out to Nicola Maher or a member of the Insurance Litigation team.

Read the full underlying judgment here, and the consequential judgment, here.