You are an insurance broker. One of your clients is Fiona who owns and operates a horse riding school. Fiona has several commercial insurance policies, that you place, relating to the riding school. Fiona contacts you about the following situation.

Fiona employs Marcia as the manager of the riding school. Marcia has resigned, as she is planning to set up her own riding school in the next village. Fiona has told Marcia that she cannot set up a riding school in the next village due to a clause in Marcia's contract of employment.

During an argument about this, Marcia has told Fiona that she ''will do it anyway''. Marcia was so distracted by the argument she failed to fit a saddle properly on a horse and during a riding lesson a child was seriously injured as a result. The child's parents are now suing both Marcia and Fiona.

Due to the child's injury, the riding school has been forced to close immediately until safety checks are undertaken by the appropriate authorities. As a precaution, all future bookings at the riding school have been cancelled. Some clients who have had their bookings cancelled are threatening to sue Fiona.

Fiona has asked you for advice in respect of this situation.

(a) Explain, with justification, on what basis Fiona may be able to prevent Marcia from setting up a

rival riding school. Refer to one relevant case in support of your explanation. (b) Discuss on what basis the injured child's parents may be able to sue Marcia. Refer to one relevantcase in support of your discussion. (c) Discuss the basis on which Fiona may be liable for the child's injury. (d) Explain, with justification, how Fiona might avoid liability for the cancelled bookings, if claims aremade against her by clients of the riding school.

(6)

(10)(8)