Camstar wins £2.38m after factory fire dispute

Camstar Herbs has been awarded approximately £2.38m in damages and associated court-ordered payments after a successful professional negligence claim against its former insurance broker, following a fire that severely disrupted parsley processing at one of its Suffolk factories.

The High Court awarded the manufacturer £1,249,362.50 in damages against Advisory Insurance Brokers Limited, trading as Morgan Law Insurance Brokers. Subsequent orders covering interest, an additional payment and interim legal costs brought the reported total to approximately £2.38m in early November 2026.

The original judgment was handed down by His Honour Judge Bird, sitting as a judge of the High Court, on 27 October. The ruling established that Camstar had been left without suitable business interruption insurance for payments it needed to continue making to agricultural suppliers after the factory fire.

The incident occurred on 16 August 2021 at Camstar 1, one of two processing facilities operated by the business in Suffolk. Approximately 60% of the company’s harvested parsley passed through the affected plant, making the disruption particularly serious for its seasonal manufacturing operation.

No injuries were reported, but the fire substantially restricted Camstar’s ability to dry and process incoming parsley. The business subsequently made payments to contracted growers and its specialist harvesting operator for material it could no longer handle through the damaged facility.

Those payments became the central issue in the insurance dispute. Camstar continued supporting its agricultural supply network despite losing the ability to process the expected crop, but the insurance policy arranged by its broker did not provide the appropriate cover for that expenditure.

Camstar’s business depends on a relatively specialised production system. Parsley is cultivated by contracted growers, harvested during a defined seasonal period and brought into processing facilities where it is dried and prepared for sale as a food ingredient.

The High Court heard that the company’s growers were located within approximately 25 miles of its processing operation. Crop establishment and harvesting arrangements were coordinated around the availability of the factories, with growers receiving payment according to the dried weight and grade of parsley produced.

Parsley cultivation also involves a crop rotation cycle and successive harvests during the growing season. The court was told that fields could produce two or three cuts, with harvesting taking place between July and November depending on weather and crop conditions.

This production structure made the timing of the August fire particularly disruptive. Growers had already committed land, labour and other inputs to the crop, while Camstar had an established commercial need to maintain supplier relationships for subsequent seasons.

The manufacturer therefore continued making payments when the expected quantities could not be processed. Those arrangements were intended to preserve the agricultural network on which the business relied rather than to purchase additional materials for an alternative manufacturing operation.

The distinction became important because of the way Camstar’s business interruption insurance had been arranged. Before 2018, the company held cover calculated on a gross revenue basis, which could protect continuing expenditure on materials when turnover was interrupted.

At renewal in 2018, its broker recommended a cheaper Aviva policy written on an insured profit, or gross profit, basis. The annual premium was £29,904, compared with a quoted £37,009 for renewing the previous gross revenue arrangement.

The change reduced the quoted annual premium by £7,105, but it also altered the treatment of material purchases in the calculation of business interruption cover. The difference was significant because Camstar’s agricultural purchasing costs did not cease when production was interrupted.

Under the insured profit arrangement, purchases of materials for production were classified as uninsured working expenses. The policy calculation assumed that those costs would generally decrease in proportion to the reduction in turnover following an insured incident.

Camstar’s circumstances were different. Its continuing payments to growers and the harvesting contractor remained necessary despite the disruption, meaning that the assumptions underlying the policy did not reflect the actual financial commitments of the processing business.

The broker argued that the disputed expenditure could have been recovered through the policy’s increased cost of working provisions. The court examined that argument alongside the way the manufacturer had calculated and made its payments.

Increased cost of working provisions generally concern additional expenditure incurred to prevent or limit a reduction in turnover following an insured event. The court concluded that Camstar’s payments were not additional expenditure of that kind.

They represented costs that the business would ordinarily have incurred had the harvest proceeded and the factory remained operational. The fact that the payments were calculated through negotiations following the fire did not change their underlying commercial character.

Judge Bird also rejected the argument that the payments should be treated as savings against the manufacturer’s loss. The expenditure had not ceased, and withholding it could have jeopardised the company’s ability to obtain parsley from its growers in subsequent seasons.

The judgment found that Camstar would have arranged appropriate gross revenue cover had it been properly advised. Alternatively, suitable amendments or extensions to another business interruption policy could have protected the continuing purchasing costs.

The court accepted that the broker’s failure to explain and arrange appropriate cover had caused the manufacturer a recoverable financial loss. It awarded the full £1,249,362.50 claimed in damages, corresponding to the continuing payments for which Camstar had received no insurance compensation.

The subsequent financial orders included £360,492 in interest, an additional £75,000 following Camstar’s successful Part 36 settlement offer and an interim payment of £700,000 towards legal costs.

Combined with the original damages award, these amounts total £2,384,854.50. The reported £2.38m figure therefore includes more than compensation for the uninsured agricultural payments and should not be described as the original damages award alone.

Further sums may become payable following the final determination of outstanding costs and interest. The interim legal costs payment is not necessarily the final amount recoverable for the litigation, and the published judgment does not establish that every court-ordered sum has already been received.

Camstar’s case is closely connected to the industrial characteristics of its manufacturing operation. The company depends on a seasonal agricultural input that requires coordinated harvesting and prompt processing, while the supply network cannot necessarily be suspended and restarted without commercial consequences.

A food processing interruption can therefore affect expenditure beyond the damaged factory itself. Suppliers may have made production commitments long before an incident occurs, and the manufacturer’s ability to resume operations can depend on maintaining those relationships during the interruption.

Business interruption insurance must account for the way such commitments behave when output falls. A policy that excludes material purchases from the insured loss calculation may provide insufficient protection where those purchasing costs continue despite reduced turnover.

The High Court’s findings concerned the broker’s duties, the available policy arrangements and the losses arising from Camstar’s particular circumstances. They do not establish that every gross profit policy is unsuitable for food manufacturing, or that gross revenue cover is necessarily the correct arrangement for every processor.

The judgment also records that Camstar experienced a second fire in July 2023, by which time alternative insurance arrangements were in place. That later incident was not material to the court’s decision concerning the payments arising from the 2021 disruption.

With liability and damages established, the November reporting centres on the financial consequences of the ruling. The award recognises the cost of preserving Camstar’s agricultural supply relationships during a period when one of its principal processing facilities could not operate normally.

The case is recorded as Camstar Herbs Limited v Advisory Insurance Brokers Limited [2026] EWHC 2649 (Comm). Its findings identify a specific failure to match business interruption insurance to the manufacturer’s actual purchasing commitments, with the resulting court-ordered payments now reported at approximately £2.38m.