High Court Sets Guiding Principles on Admissibility of Expert Evidence for Interpreting Aviation Insurance Contracts

1. Introduction

This commentary examines the recent ruling in Avolon Aerospace (Hamilton) AOE 1 Ltd & Ors v Lloyds Insurance Company SA & Ors ([2025] IEHC 32), delivered by Ms. Justice Eileen Roberts in the High Court of Ireland on January 23, 2025. The case concerns a set of aviation insurance policies (“the Policies”) issued by multiple underwriters, including Lloyds Insurance Company SA, covering certain aircraft that were allegedly lost following the Russian invasion of Ukraine.

The plaintiffs (various aircraft lessors such as Avolon Aerospace, BOC Aviation Ireland, Hermes Aircraft, and others) brought proceedings against multiple War Risk and other insurance defendants. Amid these complex proceedings, the court was asked to rule, in a preliminary manner, on the admissibility of expert testimony proffered by one of the defendants’ experts, Mr. William Farmer. Specifically, the plaintiffs sought an order to exclude Mr. Farmer’s testimony regarding alleged “market practice” or “market understanding” of aviation insurance policies, contending that such evidence improperly attempted to introduce subjective interpretations into the court’s objective exercise of contract construction.

Ms. Justice Roberts’s decision clarifies the permissible scope of expert evidence in insurance coverage disputes. In particular, the Judgment addresses when “market practice” or “market understanding” crosses the line into impermissible commentary on the meaning of contractual provisions—an exercise that remains firmly within the purview of the court. At the same time, the court provides guidance on when testimony about market usage and context may be helpful or even necessary.

2. Summary of the Judgment

The main issue before the High Court was the plaintiffs’ application to exclude Mr. Farmer’s entire expert testimony in limine (that is, before he could be heard orally). The plaintiffs argued that large swathes of Mr. Farmer’s proposed evidence, which referred to “market practice” or “market understanding,” amounted to an inadmissible attempt to persuade the court to adopt a subjective interpretation of the insurance policies. The War Risk defendants urged the court to allow Mr. Farmer to testify fully, with any questions of admissibility and relevance to be handled through cross-examination and final submissions.

Justice Roberts ultimately declined to exclude Mr. Farmer’s evidence in its entirety. She reasoned that although subjective interpretations are inadmissible, certain kinds of market-practice evidence can be of assistance to the court in understanding the specialized aviation insurance market context. Thus, she held that:

Mr. Farmer could give evidence on matters of general market practice that might shed light on the objective commercial context of these niche insurance policies.
Portions of Mr. Farmer’s report (Section 8), which directly interpreted a specific phrase (“in the course of repossession”) and applied it to the facts of this case, were excluded as inadmissible. The court concluded that Mr. Farmer purported to supply his own (and allegedly others’) subjective understanding for a contractual term that had never arisen in practical market usage.
The court would still reserve final judgment on the admissibility and weight of much of Mr. Farmer’s testimony until after hearing oral evidence and submissions.
The plaintiffs’ own responding expert (Mr. Hughes) had already testified to similar topics, so excluding Mr. Farmer’s testimony in full would be unfair and would require the court to undertake many additional steps to excise or reassess Mr. Hughes’s evidence as well.

As a result, the court established a “listen first, decide admissibility later” approach to expert evidence in this specialized area of law, while setting careful limits on expert opinions that are purely interpretative and subjective.

3. Analysis

A. Precedents Cited

Justice Roberts’s ruling cites a broad range of case law, including English and Irish precedents, to outline the boundaries of expert evidence in contract interpretation. Key authorities include:

Crema v Cenkos Securities Plc [2011] 1 WLR 2066: This English Court of Appeal decision confirms that evidence of “market practice” falling short of a fully established trade custom can sometimes be admitted to help the court understand a contract’s commercial background.
Aspen Insurance v Adana Construction [2015] EWCA Civ 176, [2015] 1 C.L.C. 270: Here, expert evidence of “market understanding” was ultimately deemed irrelevant and inadmissible, illustrating that courts often hear such evidence first and discard what proves unhelpful.
Barlee Marine Corporation v Trevor Rex Mountain [1987] 1 Lloyd's Rep. 471: An older English authority emphasizing that subjective views of practitioners as to “normal and proper scope” of a policy clause are not admissible as evidence for construing the wording of a written contract.
Hyper Trust Ltd v FBD Insurance plc [2021] IEHC 78: An Irish High Court decision underscoring that subjective intentions are not admissible in contract interpretation, and that only certain portions of an expert’s report can be introduced where they reflect context known to both parties when the contract was formed.
Analog Devices BV v Zurich Insurance [2005] IR 274: Confirming that common standard market clauses in policies can be relevant context at the interpretation stage, as they may shed light on typical industry practices or wording.

Collectively, these cases support the principle that the court may admit expert evidence regarding specialized industry context—especially in niche markets such as aviation insurance—to inform the “matrix of fact.” However, courts must exclude or disregard purely subjective views about how contractual terms should properly be interpreted.

B. Legal Reasoning

In arriving at her conclusion, Justice Roberts reiterates that interpreting a policy is an objective task and remains exclusively within the court’s domain. The judgment sets out the following key points of legal reasoning:

Objective Construction Rules: The court must determine what the contract would convey to a reasonable person in possession of all relevant factual background (the “text in context” approach). Subjective efforts by experts or parties to interpret contract language are inadmissible.
Factual Matrix vs. Subjective Understanding: While courts may consider evidence of industry usage or well-established “trade custom,” testimony about a purely subjective, personal, or untested “market view” of what certain clauses mean is inadmissible.
Basis for Admittance of “Market Practice”: Evidence of industry norms can be relevant when clauses employ technical language or if there is a “shorthand” widely used by specialists. But if experts cannot show that a practice has genuinely arisen in the marketplace, the testimony is unlikely to be relevant.
Exclusion of Section 8 (Specific Contractual Terms): Mr. Farmer’s Section 8 commentary, offering an interpretation of “in the course of repossession,” was excluded as inadmissible. Justice Roberts found that there was no prior or recognized market usage for that phrase, making the testimony speculative and subjective.
Discretion to Hear Evidence First: Recognizing the possibility that aspects of market-experience testimony might be helpful, the court declined to block Mr. Farmer’s entire testimony upfront. Proper analysis could be done post cross-examination, when the court would be best placed to assess admissibility and weight.

C. Impact

This ruling carries several potential consequences for future litigation in both aviation insurance and other specialized areas of law:

It reaffirms that expert testimony must be strictly scrutinized to ensure it does not displace the court’s role in interpreting contractual provisions.
Parties to insurance disputes may continue to rely on industry- or market-specific context to elucidate technical terms, but they must show that the alleged “market practice” is indeed a standardized usage or widely recognized approach.
By stressing the distinction between relevant background context and impermissible subjective opinion, the ruling provides a roadmap for how courts might handle parallel questions in other sectors where standardized endorsements and niche contracts exist.
The approach of allowing experts to testify first, subject to subsequent rulings on admissibility, may become a default approach in complex commercial litigation, especially where it might be difficult to parse all references to “market practice” without hearing the evidence.

4. Complex Concepts Simplified

“Market Practice” vs. “Trade Custom”: • “Market practice” can include general habits or generally accepted norms within an industry, even if not fully universal.
• “Trade custom,” by contrast, is a proven, invariable, certain, and notorious usage in an industry. Courts have long recognized that where a true trade custom exists, it may shape the implied terms or understanding of a contract.
Here, much of the dispute focused on whether Mr. Farmer was speaking to robust, well-known customs or to mere subjective or hypothetical interpretations.

Objective vs. Subjective Interpretation: • Objective interpretation requires the court to consider the words of the contract as they would be understood by a reasonable person with knowledge of the background reasonably available at the time.
• Subjective interpretation delves into a party’s or an expert’s personal viewpoint of how terms should work. Subjective interpretations are inadmissible to alter the textually evident meaning of a policy.

De bene esse Evidence: Evidence heard by the court under the condition that its eventual admissibility or weight will be decided at a later stage. This approach allows for more complete factual exploration with the understanding that certain evidence may be disregarded entirely if found inadmissible.

“In the Course of Repossession” Clause: Mr. Farmer’s specific interpretation of the phrase “in the course of repossession” was excluded because, by his own admission, he had no practical case where it was applied, making his testimony a purely subjective or hypothetical statement not grounded in an established usage.

5. Conclusion

The ruling in Avolon Aerospace (Hamilton) AOE 1 Ltd & Ors v Lloyds Insurance Company SA & Ors provides critical guidance on the admissibility of expert opinion in highly specialized and technical domains such as aviation insurance. While confirming that courts are open to hearing truthful, context-driven background evidence about industry norms and practices, the High Court made clear that experts cannot usurp the judicial role of contract interpretation by presenting subjective views as “market understanding.”

Additionally, the Judgment highlights the practical judicial preference for hearing expert evidence first, despite admissibility concerns, rather than excluding it outright in preemptive applications. Nonetheless, the case shows that if an expert opines on specific policy wording without a well-established or recognized industry context, those views will likely be excluded or given no weight. For legal practitioners and industry actors alike, this offers a valuable roadmap for presenting— and challenging—expert testimony when standard-form insurance clauses give rise to disputes about coverage and interpretation.

Overall, the decision promotes fairness by allowing experts to share genuine, material market practices or conventions, while ensuring that contractual interpretation remains a judicial function to be carried out by reference to the objective meaning of policy wording. This balanced approach will, in all likelihood, shape how insurance litigation and other specialized commercial disputes proceed in the Irish courts, laying down a clear framework for when, and on what basis, expert testimony about “market understanding” can be admitted.