Including the question of allocation of the burden of proof in insurance cases.
The Supreme Court considers that the collapse of a roof as a result of defects in the structure of the building and the fact that snow had accumulated on it for two weeks nevertheless constitutes sudden and unforeseen damage in the context of insurance law. This is clearly set out in a new ruling in an insurance case concerning compensation in which a roof collapsed as a result of the weight of the snow on the roof. In the judgment, the Supreme Court issues a detailed description of what is meant by damage being sudden and unforeseen. In that regard, the Supreme Court notes that sudden damage means that the occurrence of the damage itself is instantaneous, in other words that it is not possible to prevent the progress or extent of the occurrence of the damage. Because the damage in the case occurred immediately as a result of the collapse, the damage was sudden. The Supreme Court also repeats earlier case law regarding what is meant by damage being unforeseen and notes that it must not be interpreted as meaning that no-one should actually have foreseen the damage. Instead, it must be understood as meaning that the damage was not foreseeable in any reasonable sense. The Supreme Court further explains that circumstances that have become known during the insurance period must also be taken into consideration. According to the Supreme Court, the assessment must be made objectively on the basis of what is typically foreseeable. The Supreme Court thus notes in the judgment that the damage caused by the collapse of the roof was unforeseen because the lack of load-bearing capacity could not be detected with the naked eye and that a previous inspection of the building had not revealed any circumstance indicating that the structure of the building was defective. Nor had it been shown that either the property owner’s previous or current representatives or works management had been aware of the defective structure.
In the judgment, the Supreme Court also repeats earlier case law on how allocation of the burden of proof should be assessed in insurance cases. Case law shows that the burden of proof has often been allocated in such a way that the policyholder bears the burden of proof for circumstances that mean that the terms and conditions governing the scope of the insurance contract are applicable, whereas the insurance company bears the burden of proof for circumstances that make exclusion clauses applicable. However, in accordance with case law, the Supreme Court repeats that even if such an allocation is the starting point, the court should also take into account factors that are typically considered when allocating the burden of proof in civil cases, including the parties’ ability to secure evidence. Nevertheless, it is clear from the grounds for the judgment that, in the case in question, the Supreme Court allocated the burden of proof for the conditions for exclusion, such as failure to clear snow or neglect of maintenance, to the insurance company. Because the insurance company had not proved those circumstances, the Supreme Court dismissed the insurance company’s objections with regard to those aspects.
The Supreme Court’s ruling is in line with the conclusion reached by the Court of Appeal. The Supreme Court thus upheld the Court of Appeal’s ruling and ruled in favour of the property owner. However, it is interesting that both the Court of Appeal’s and the Supreme Court’s rulings go against the initial ruling by the district court. The insurance company was successful in the district court because the district court found that the property owner had failed to carry out the maintenance because no action had been taken to check the load-bearing capacity of the roof when additional insulation was fitted five years prior to the collapse. The roof had also not been reinforced. The district court thus found that the collapse of the roof, which was overloaded as a result of the snow, was not unforeseen. The district court also added that the damage was not considered to be sudden because snow had been accumulating on the roof for a period of two weeks.
We consider that the judgment is important and provides guidance on how insurance terms and conditions should be designed and interpreted and also on what evidence should be secured in the event of an insurance claim. We therefore recommend reading the judgment.
