Running risks recklessly: the law of ‘reasonable care’ clauses after Hawk Packaging
Many liability policies in New Zealand contain ‘reasonable care’ clauses, obliging the insured to take reasonable steps to avoid loss, preserve plant and equipment, and comply with laws. It has been an open question whether such clauses require subjective recklessness (the insured knowingly courted an unreasonable risk) or objective recklessness (no reasonable insured would have run the risk). In T&G Processed Foods Ltd v Hawk Packaging Ltd  NZHC 643, the High Court has considered such a clause at length, in the context of a fire which caused extensive damage to an industrial site. Campbell Walker QC, counsel for the insurer in the case, will discuss its significance for the application of reasonable care clauses in New Zealand law. He stresses the importance of reading the words of the particular clause, rather than defaulting to any general principle of interpretation of ‘reasonable care’ clauses. The clause may apply different standards to loss, plant, and laws, and may not require recklessness at all.
Campbell Walker QC practices in general commercial law, with specialties in insurance, contract law, administrative law, trusts, and arbitration. He was an associate at Shearman & Sterling in Paris and then a partner in Gilbert/Walker. He went to the Bar in 2014.