CA-2024-002563 - [2025] EWCA Civ 932

Fraud

There is an entirely separate point, unconnected with insolvency which, in my view, also answers the insolvency point decisively against the NHBC. As I have noted, Section [B] is concerned not only with insolvency, but also provides cover where the contractor commits fraud. In such circumstances, it could not sensibly be argued that Peabody’s cause of action accrued at the moment that the contractor committed the fraud (which, by parity of reasoning with the insolvency argument, must be NHBC’s case).

An employer in the position of Peabody will almost certainly not know if or when the contractor commits fraud. Indeed, that may not become apparent to anyone for months, if not years, after the relevant acts or omissions. If the cause of action accrued at the moment the contractor committed fraud, Peabody’s time for commencing proceedings under the policy may be severely truncated, if not completely extinguished, before it even knew that a fraud had occurred. So, in the context of fraud, it makes perfect sense for the cause of action under the policy not to accrue until the principal requirement is fulfilled, namely Peabody having to pay more to complete the building of the homes as a result of that fraud.