It may be of interest to many of you to learn of a case decided recently by the UK Upper Tribunal (Lands Chamber) which, although not binding on the Royal Court, may be persuasive.
In Qdime Ltd v Various Leaseholders at Bath Building (Swindon) and others  UKUT 261 (LC) the Tenant was disputing an obligation to contribute to the terrorism element of the cost of insurance. It was held that a residential lease which obliged a Landlord to insure against the usual comprehensive risks in accordance with the Council of Mortgage Lenders recommendations (which include explosion) did require a Landlord to insure against terrorism: the ordinary meaning of “explosion” included explosion caused by terrorism. The Landlord was obliged to insure against the risk of explosion not the particular method by which an explosion might be caused. Furthermore, the Upper Tribunal went on to say that even if that was incorrect, the Landlord had, on the facts, exercised its discretion to obtain terrorism insurance and that discretion was reasonable.
Although only a Lands Tribunal decision and referencing the English Council of Mortgage Lenders recommendations, this case may nevertheless influence Jersey's Royal Court on this issue. Many Jersey residential and commercial leases oblige one party, usually the Landlord, to insure either against a list of risks which will generally include "explosion" and/or "such other risks as the [Landlord] may reasonably consider necessary".
This decision will be of interest to both Landlords and Tenants. Landlords should note that an obligation to insure against explosion may require terrorism insurance and Tenants should note that a well-drafted lease will usually oblige them to pay for such cover.
Please do not hesitate to contact us if you wish to discuss this decision or its implications.