Here, we outline how a complex contractual pursuit claim was successfully resolved under a Rural Protect policy, resulting in the recovery of a substantial sum following a breach of contract.
The claim related to an arable farmer who had engaged a third-party contractor to drill maize seed and apply fertiliser across 14 fields, covering approximately 265 acres over four separate blocks of land. Responsibility for the correct placement and depth of fertiliser sat with the contractor.
As the crops began to emerge, it quickly became evident that something had gone wrong. Only around 50% of the maize rows emerged, indicating a serious issue with the drilling process and resulting in significant crop failure.
An initial investigation was carried out by the farmer’s usual agronomist, who identified that the fertiliser placement was either too close to the grain or unevenly distributed. To provide further clarity, an independent agronomist was instructed. Their findings confirmed that the fertiliser had been placed too close to the seed, effectively overdosing it and causing toxicity that prevented successful germination.
As a result of the failed crop, the farmer suffered an estimated financial loss in excess of £160,000. Additional remedial costs were also incurred, including further soil analysis to assess soil health, increased weed control where crops failed to establish and maize stubble clean-up from plant residue left on the soil surface.
At this stage, the matter was referred to insurers and a contractual pursuit claim was pursued against the contractor under the farmer’s Rural Protect policy.
Due to the value and complexity of the claim, the case was allocated to rradar’s high-value commercial disputes team. rradar are the specialist litigation and commercial law firm that acts for Rural Protect policyholders as a part of their cover when a claim is made. A clear strategy was agreed, supported by expert evidence and a defined settlement range.
A senior rradar solicitor specialising in high-value commercial disputes prepared a detailed letter of claim, setting out the breach of contract and clearly evidencing the financial losses suffered. Throughout the process, the legal team:
- drafted and managed correspondence with the contractor
- instructed and liaised with appropriate expert witnesses
- agreed and reviewed legal strategy
- instructed counsel where required
- negotiated directly with the contractor’s legal representatives
Following sustained negotiation, the claim was successfully settled for £150,000, without the need to issue court proceedings. The outcome aligned with expectations and avoided the additional cost, uncertainty and disruption associated with litigation.
This case highlights how contractual disputes can arise even in long-standing commercial relationships. In this instance, the contractor had been used for many years without issue, yet a failure to meet contractual obligations resulted in significant financial consequences which could not be ignored.
Having contractual pursuit cover in place and exceeding the prospect of success clause on the policy* allowed the farmer to seek early legal advice and pursue recovery confidently, with the policy responding to cover legal fees, counsel’s costs and expert fees. Without this protection, the cost of pursuing the claim may have been prohibitive.
As Kris Roper, Associate Solicitor in High Value Commercial Disputes at rradar, commented: “This case highlights how even longstanding commercial relationships can go wrong, and the financial consequences of a contractual breach can be severe. Access to expert legal advice through an insurance-backed policy can be invaluable in these situations.”
If you would like to understand more about contractual pursuit cover and how McClarrons helps support clients through complex claims, visit our Claims page. If you’d like to learn more about Rural Protect or would like a complimentary review of your insurances, you can contact our Rural Team on 01653 609152 or at farm@mcclarroninsurance.com.
*Unlike most legal expenses policies, Rural Protect does not have a prospect of success clause on defence claims but understandably, it does on pursuit claims, as it has to make commercial sense to fund a legal matter i.e. the cost does not outweigh the benefit. The prospect of success clause means that you must have a 51% chance or greater of being successful in your claim for the policy to react. The other fact to observe is that should you lose your case, you will be responsible for adverse costs, those legal costs and expenses of the winning party. Therefore you need to be confident that you have a good chance of winning before starting litigation; the Insurer will advise you where they think you stand and why. Rural Protect does not cover these adverse costs, only your own legal fees.
