Quantum Claims

4.04.11

After the event: subsequent conduct and interpretation

See further DP No 147 Chapter 4, paragraph 4.17, Chapter 5, paragraph 5.21 and Question 8, paragraph 7.18

Lord Hodge's opinion in Quantum Claims Compensation Specialists Ltd v Wren Insurance Services [2011] CSOH 61 provides valuable Scottish guidance on the position of subsequent conduct of the parties as evidence of the construction of a contract.  In this dispute over the construction of the parties' insurance contract, Lord Hodge held that the pursuers' reliance on how the parties acted in implementing the contract was misplaced, and noted that such subsequent conduct can generally not be admitted as evidence of how the contract should be construed.  Lord Hodge noted that subsequent conduct cannot (currently) be regarded as part of the relevant matrix of fact, which Lord Hoffmann discusses in Investors Compensation Scheme Ltd v West Bromwich Building Society [1997] UKHL 28. 

Lord Hodge has confirmed that such evidence cannot be relied upon for now, but should the position change in future?  We welcome consultees' views on this topic, which is addressed at question 8 in paragraph 7.18 of our recent Discussion Paper on Interpretation (DP 147).