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The men, who were brought to the UK from Hungary, claimed they were owed compensation for damages resulting from being employed in conditions amounting to modern slavery, causing them to suffer psychiatric injuries and one of the claimant’s legs to be amputated.

The judge, however, said that HLB’s failure to disclose the use of trafficked labour and misrepresentation of wage costs gave the insurer a misleading picture of the company’s employment practices.

“MPs have never restricted insurers’ right to ignore a policy for non-disclosure or tried to expand the rights of third parties so that they could bring claims where the policyholder could not,” May wrote.

Read more: Human trafficker who used victims for insurance fraud lands in jail

HLB went into insolvency in 2015. A year later its owner was jailed after authorities found he had employed trafficked labour. The workers sued in 2017 but a High Court rejected their case in 2020.

Lawyers for the claimants argued that the UK government’s goal of compensating victims of human trafficking should influence how the Financial Conduct Authority’s (FCA) rules on who is considered a policyholder, “so vulnerable victims don’t go uncompensated.”

But the insurer’s lawyers countered that FCA’s rules do not give third parties the right to claim compensation, and “there’s no special carve out for human trafficking victims” They added that “insurance would be untenable otherwise, as insurers would ever know the extent of the risk they faced.”

The judge agreed and wrote: “If public policy in relation to trafficked persons demanded that such significant changes be made to the law of insurance then … one would expect to find them in primary legislation.”

She added that existing rules state that the men could only claim what HLB and since the insurer can avoid paying the company’s claims, it was not entitled to pay the men’s claims, either.


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