Skip links

Ted Baker Plc Triumphs in Employee Thefts Claim

WarehouseAn Internationally renowned fashion company whose business suffered due to a spate of clandestine warehouse thefts by a trusted employee has triumphed in a marathon legal tussle with insurers who disputed their liability to cover the loss.

Over a five-year period, Ted Baker plc fell victim to more than 500 incidents of theft by the employee. The company made a claim under its commercial insurance policy to reflect the value of the goods stolen, lost profits and business interruption.

However, insurers refused to pay out, claiming that the policy did not indemnify Ted Baker against non-forcible and non-violent thefts by employees. In the alternative, it was submitted that the company’s cover did not extend to consequential losses arising from the thefts.

The High Court accepted Ted Baker’s interpretation of the insurance contract and found that the company was covered for both the direct and indirect losses it suffered due to the employee’s dishonesty.

The insurers then presented fresh evidence in support of their case that the parties had negotiated the contract under the shared assumption that non-forcible thefts by employees would not be covered. Whilst not challenging the judge’s interpretation of the policy, the insurers argued that its wording did not reflect the parties’ true intentions and that Ted Baker should therefore be estopped from claiming under it.

In refusing permission to appeal, however, the Court was not satisfied that the fresh evidence would have had an important influence on the outcome of the case. The evidence had been presented late and, in any event, the insurers’ attack on the judge’s conclusions had no real prospect of success. Remaining issues as to liability and the quantum of Ted Baker’s claim would be determined by the High Court at a later date.