Recent developments in insurance contract law
14 December 2015
06 November 2018
Özlem Gürses (Dr)
Summarises the most important developments in English insurance contract law since the beginning of 1999. The number of insurance and reinsurance cases coming before the English courts has never been greater, with key issues or principles falling to be decided on regular occasions. In particular the law on utmost good faith has been transformed by the courts.
- Summary »
- Introduction »
- Regulation and related matters »
- Insurable interest »
- Misrepresentation and non-disclosure »
- Warranties »
- Classification of terms »
- Continuing duty of good faith »
- Notice and proof of loss »
- Liability insurance »
- Motor insurance »
- Key points »
- Legislation »
- Case law »
- Useful publications »
- Useful websites »
This fact file attempts to summarise the most important developments in English insurance contract law since the beginning of 1999. The number of insurance and reinsurance cases coming before the English courts has never been greater, with key issues or principles falling to be decided on regular occasions. In particular the law on utmost good faith has been transformed by the courts.
Most of the cases involve commercial disputes, as consumer problems are now in practice resolved by the Financial Ombudsman Service, which has taken over on a statutory basis the functions of the Insurance Ombudsman Bureau. The decisions of the Financial Ombudsman Service are not covered here. For these see the separate fact file The Financial Ombudsman Service and general insurance.
This fact file focuses on general principles of insurance law, although there are specific sections on liability insurance and motor cover, perhaps in terms of sheer volume the most important classes of insurance. There is no need for a separate section on property insurance as this class has few unique features from a legal point of view. Marine insurance, reinsurance and life assurance have their own principles, which are not explored in any detail. See the separate fact files Recent developments in reinsurance law and Recent developments in life assurance law.
The number of insurance and reinsurance cases coming before the English courts has never been greater. Most of the cases involve commercial disputes, as consumer problems are now in practice resolved by the Financial Ombudsman Service, which has taken over on a statutory basis the functions of the Insurance Ombudsman Bureau.
Important findings by the courts have included:
The defence of lack of insurable interest should not defeat a legitimate commercial transaction.
Misrepresentation and non-disclosure
- In non-consumer (business) insurance, the doctrine of utmost good faith imposes two duties on the parties to the contract; a duty not to misrepresent any matter relating to the insurance - i.e. a duty to tell the truth; and a duty to disclose all material facts relating to the contract - i.e. a duty not to conceal anything that is relevant.
- In consumer insurance, the duty of disclosure was abolished by the Consumer Insurance (Disclosure and Representations) Act 2012 (The 2012 Act). The 2012 Act did not abolish but modify the duty not to misrepresent material facts. Accordingly, under the 2012 Act, a consumer assured is under the duty to take reasonable care not to make a misrepresentation.
A term may be a warranty even though the term is not expressly stated to be a 'warranty'. Such a term, to be classified as a warranty should meet the following requirements: 1) a term which goes to the root of the transaction; 2) it bears materially on the risk of loss; 3) damages would be an unsatisfactory or inadequate remedy for its breach.
(HIH Casualty & General Insurance Ltd. v New Hampshire Insurance Co.  2 Lloyd's Rep. 161).
Continuing duty of good faith
The utmost good faith (business insurance) and duty to take reasonable care not to make misrepresentation (consumer insurance) apply pre-contractually. The duties do not extend to the post-contractual stage (but remember that insurance contract may provide otherwise if the parties agree on it). The parties to an insurance contract is under the duty to act in good faith throughout their contractual relationship, however, this duty is not the same as that of the pre-contractual duty. The post-contractual duty may appear in the form of e.g. in the context of liability insurance if the insurer takes over defending the third party claim against the assured the insurer is required to take care of the assured's interest as well as its own. The post-contractual duty of good faith is governed by common law as neither the MIA 1906 nor the 2012 Act refers to the post-contractual duty.
Conditions in insurance policies
There is no doctrine of 'repudiation of a claim' for breach of insurance conditions. If a term is a mere condition its breach entitles the innocent party to repudiate the policy if the term is so serious that goes to the root of the contract. The English courts noted that if the condition is not a condition precedent any breach of it will almost certainly not give the insurers any defence to the claim - except claiming damages if proved. Breach of condition precedent to insurer's liability discharges the insurer from liability for the breach that is tainted by the breach.
Important legislative developments have included:
- The Contracts (Rights of Third Parties) Act 1999 has replaced the privity rule with the principle that a third party can take the benefit of a policy on the same terms as the insured in certain cases.
- The Financial Services and Markets Act 2000 has replaced all earlier insurance companies' legislation and introduced regulation of the manner in which insurers deal with private insureds in particular.
- There are new Motor Insurers' Bureau agreements and new statutory rights conferred upon the victims of motor vehicle accidents.
- The enactment of the Third Parties (Rights against Insurers) Act 2010 which makes it easier for claimants to recover damages from the insurers of a defendant.(Has not come into force yet)
- The Consumer Insurance (Disclosure and Representations) Act 2012 which abolished the duty of disclosure in consumer insurance, placing the duty on the consumer to take reasonable care not to make a misrepresentation.
- The Consumer Rights Act received Royal Assent in March 2015 and came into force on 1 October 2015.
The Insurance Act 2015 has reformed insurance contract law in the following areas:
a) disclosure and misrepresentation in business and other non-consumer insurance contracts
b) insurance warranties (consumer and non-consumer insurance)
c) insurers' remedies for fraudulent claims (consumer and non-consumer insurance)
The Act also amends the Third Parties (Rights against Insurers) Act 2010 ("the 2010 Act"), which has not yet been brought into force. These amendments clear the way for the 2010 Act to come into force.
The Law Commission is a statutory independent body created to keep the law under review and to recommend reform where it is needed. The commission last considered insurance contract law in 1980, when it looked at non-disclosure and breach of warranty. It recommended reforms to the law but these have not been implemented. In January 2006 the Law Commission (together with the Scottish Law Commission) launched a new review of insurance contract law, beginning with a "scoping paper" inviting feedback on areas of insurance law which should be covered in the review.
Following a lengthy and comprehensive review, a draft Bill relating to consumer insurance was published in December 2009 (the Consumer Insurance (Disclosure and Representations) Bill) and this bill was enacted as the Consumer Insurance (Disclosure and Representations) Act 2012 (CIDRA). As anticipated, the Act made changes to the law of non-disclosure, to bring the law in line with common industry practice and the rulings of the Financial Ombudsman Service. In consumer insurance, the duty of disclosure was abolished by the CIDRA, therefore, in consumer insurance the duty is to take reasonable care not to make a misrepresentation.
CIDRA came into force on 6 April 2013 and applies to all 'consumer insurance contracts' made on or after that date. A 'consumer insurance contract' is a contract of insurance between:
(a) an individual who enters into the contract wholly or mainly for purposes unrelated to the individual's trade, business or profession; and
(b) an individual who carries on the business of insurance and who becomes a party to the contract by way of that business (whether or not they are in accordance with the rules of the Financial Services and Markets Act 2000).
Under the CIDRA the insurer can only seek remedy if misrepresentation is qualifying. That is if:
- the misrepresentation was caused by the consumer's failure to exercise reasonable care; and
- the insurer shows that without the misrepresentation, it would not have entered into the contract (or agreed to the variation) at all, or would have done so only on different terms.
CIDRA classifies qualifying misrepresentation as either:
deliberate or reckless if:
- the consumer knew that it was true or misleading, or did not care whether or not it was untrue or misleading: or
- knew that the matter to which the misprepresentation was relevant to the insurer, or did not care whether or not it was relevant to the insurer.
or, careless; i.e. if it is not deliberate or reckless.
The burden of proof that a qualifying misrepresentation was deliberate or reckless is on the insurer. In this respect, the 2012 Act also states that unless the contrary is shown, it is presumed that:
- the consumer had the knowledge of a reasonable consumer, and
- the consumer knew that a matter about which the insurer asked a clear and specific question was relevant to the insurer.
Insurers' remedies for qualifying misrepresentations under CIDRA
Qualifying misrepresentations were deliberate or reckless: the insurer may avoid the contract if a qualifying misrepresentation was deliberate or reckless. In such a case, the insurer need not return any of the premiums paid, except to the extent (if any) that it would be unfair to the consumer to retain them.
Qualifying misrepresentation was careless: in such a case, the insurer's remedies are based on what it would have done if the consumer had exercised reasonable care not to make a misrepresentation:
- If the insurer would not have entered into the consumer insurance contract on any terms, the insurer may avoid the contract and refuse all claims, but must return the premiums paid.
- If the insurer would have entered into the consumer insurance contract, but on different terms (excluding terms relating to the premium), the contract is to be treated as if it had been entered into on those different terms if the insurer so requires.
Insurance on the life of another
CIDRA also states that where a life policy is taken out by the insured on the life of another person (L), where L is not himself a party to the policy, any information provided to the insurer by L is to be treated as having been provided by the insured himself. For example, if a wife takes out a policy on the life of her husband, and the husband deliberately mis-states facts about his health, the insurers will have the appropriate remedy against the wife as the insured. The insurer also retains its rights under the Act against the wife in respect of any false statements made by her.
Insurance Act 2015
The Government Insurance Bill 2014 was introduced in Parliament in July 2014. The Bill received Royal Assent in February 2015 and will come into force on 16 August 2016. The three areas of insurance law that the Insurance Act 2015 (IA) reformed were mentioned above. The details of these reforms are as follows:
Duty of good faith in business insurance
IA renamed the duty as the duty of 'fair presentation of the risk'. The fair presentation of the risk is achieved by (1) disclosing to the insurer the material facts that the insured knows or ought to know (2) not misrepresenting material facts to the insurer. The duty applies pre-contractually. The materiality test is the same as that of under the MIA 1906 and common law: objective prudent underwriter test. IA made the inducement a statutory requirement to seek remedy for breach of the duty of fair presentation of the risk. IA also introduced some examples (not exhaustive) of material facts and the Act introduced a proportionate remedy similar to the remedy introduced by CIDRA which was mentioned above. The difference is that in CIDRA a "qualifying breach" must be either deliberate/reckless or careless, since the consumer's duty is to take reasonable care not to make a misrepresentation to the insurer. In non-consumer insurance, breaches do not have to be careless or deliberate/reckless in order to be actionable. "Innocent" breaches of the duty will also give an insurer a remedy if the insurer can show inducement.
Warranties and terms not relevant to actual loss
IA did not introduce any law reform in terms of creation or interpretation of warranties except that IA abolished the basis of the contract clauses in business insurance. The Act reformed the remedy for breach of a warranty. Accordingly, the insurer is not liable for the loss which occurs between the time that the assured breaches the warranty and remedies the breach. Thus, breach of a warranty can be remedied under IA.
IA also introduced a section in relation to risk clauses which do not define the risk as a whole but compliance with the term would tend to reduce the risk of (a) loss of a particular kind (b) loss at a particular location (c) loss at a particular time. If the insured does not comply with a term of this nature the insurer may not deny liability if the insured establishes that the non-compliance with the term did not increase the risk of the loss which actually occurred in the circumstances in which it occurred.
Remedy for fraudulent claims
IA codified the recent case law on remedy for making a fraudulent claim that under section 12 of IA if the insured makes a fraudulent claim the insurer is not liable to pay the claim and the insurer may terminate the contract by notice to the insured with effect from the time of the fraudulent act.
IA introduced a separate section (s.13) on remedy for fraudulent claims in group insurance that where A takes out a group insurance for Cs, and if one of Cs makes a fraudulent claim the insurer can seek remedy for the fraudulent claim only against the C who made the fraudulent claim.
For more on these topics see under Insurable interest, Misrepresentation and non- disclosure and Warranties below.
Back to basics
Insurance regulation in the UK has for the most part been concerned with the prevention of insurance insolvencies. There has traditionally been very little intervention in the contractual relationship between insurers and insured, and this has been left to voluntary mechanisms (covering consumer contracts only) such as the statements of insurance practice from the Association of British Insurers (life and non-life, first adopted in 1977 and modified in 1986) and the Insurance Ombudsman Bureau (set up on a voluntary basis in 1981).
The Financial Services and Markets Act 2000 replaced all earlier insurance companies legislation and introduced regulation of the manner in which insurers deal with private insureds in particular. With effect from 15 January 2005 the conduct of all classes of insurance business, with respect to both insurers and intermediaries, was regulated by the Financial Services Authority (FSA). As a consequence of this the statements of insurance practice were incorporated into the Insurance: Conduct of Business Sourcebook (ICOB), which formed part of the FSA's Handbook.
Changes in UK regulation of financial services
In April 2013, under the Financial Services Act 2012, the Financial Services Authority (FSA) was replaced as the UK financial services regulator by two new bodies: the Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA).
The PRA now authorises financially important firms such as banks, building societies and insurers (both general and life insurers). It also regulates them for prudential issues (capital/solvency etc). The FCA authorises smaller firms such as financial and insurance intermediaries and will also regulate them for prudential issues. The FCA regulates all authorised firms for conduct of business issues.
The Insurance: Conduct of Business (ICOBS) rules
The rules were revised in January 2008 as the FSA Insurance: Conduct of Business Sourcebook (ICOBS) and have been adopted by the FCA from April 2013 as the FCA now regulates insurers and intermediaries for conduct of business issues.
The provisions relating to the duty of good faith are mainly contained in chapter 8 of ICOBS, which deals in general terms with claims handling by insurers.
In relation to breach of good faith, rule 8.1.1 states:
An insurer must:
…not unreasonably reject a claim (including by termination or avoiding a policy). Rule 8.1.2 then goes on to address what is meant by 'not unreasonably reject a claim'.
Other than where there is evidence of fraud, a rejection of a consumer's claim will be unreasonable if it is for:
- Non disclosure, where the policyholder could not reasonably be expected to have disclosed the material fact.
- Non negligent misrepresentation of a material fact.
For more detail on the regulatory changes see the separate fact files The regulatory framework, The regulation of general insurance and protection business and The regulation of retail investment business.
Historically, the FSA introduced an initiative under which "contract certainty" is required of insurers. In December 2004, expressing particular concern at the way contracts were concluded within the London insurance market without agreement on policy conditions, the regulator asked market leaders to come up with a market-led solution within two years. The proposals were implemented in June 2007 with the publication of the Contract Certainty Code of Practice and the Market Reform Contract. The governing principles are that:
- the terms must be clear and unambiguous;
- the insured must be provided with documentation promptly;
- contract changes have to be clear and documented promptly;
- the policy must contain the information set out in the market reform contract.
The Market Reform Contract which requires that detailed terms to be included in the insurance contract at the outset is now the standard form used in the London market for formation of insurance contracts. For more on this initiative see the fact file on London market reform.
Under the Financial Services and Markets Act 2000, the Insurance Ombudsman has been absorbed into the wider Financial Ombudsman Service (FOS), which operates on a statutory basis. As before, the FOS may deal with cases on a basis of fairness rather than strict law - its statutory power is to determine complaints by reference to what is "fair and reasonable in all the circumstances".
Jurisdiction has been extended to some commercial disputes, initially where the insured business had a turnover of less than £1m, but amended in 2008 to include those where the insured is a micro-enterprise (that is it employs fewer than 10 people and has a turnover or annual balance sheet not exceeding €2m). The FOS will only investigate an issue after the policyholder has exhausted the insurer's internal complaints procedure and a final decision has been issued to the policyholder with which they are still dissatisfied.
If the consumer accepts the decision of an ombudsman, it becomes legally binding on both parties. Andrews v SBJ Benefit Consultants (2010).
It is not possible to appeal an ombudsman decision to another ombudsman. A decision of an ombudsman cannot be appealed on its merits in court. FOS can be "judicially reviewed" by the courts. But a judicial review will generally focus on the way in which an ombudsman has arrived at a decision, not on the individual facts and merits of the dispute itself. An insured who has accepted an FOS award cannot bring a court action for the balance of his losses.
The combined effect of these changes, together with the introduction of ICOBS, is that virtually all consumer disputes, and many small business disputes, are referred to the FOS, which has developed principles of its own in a wide range of situations. Only rarely will a consumer or small business dispute reach the courts, and that can only happen if the insured so wishes. The approach adopted by the FOS in determining these disputes has been influential in the Law Commission review of consumer insurance law as discussed above.
For further information on the FOS and general insurance see the separate fact file The Financial Ombudsman Service and general insurance.
The Unfair Terms in Consumer Contracts Regulations 1999 (replacing an earlier version in 1994) are applicable to insurance contracts. These Regulations operate to strike down unfair terms in consumer contracts. They have to date been applied to prevent insurers from relying upon a claims condition precedent which would otherwise have defeated a claim automatically and without proof of prejudice, Bankers Insurance Co Ltd v South (2004). As stated above the Consumer Rights Act came into force in October 2015. The Act revoked the 1999 Regulations.
A trader cannot by a term of a consumer contract or by a consumer notice exclude or restrict liability for death or personal injury resulting from negligence. A term is unfair if, contrary to the requirement of good faith, it causes a significant imbalance in the parties' rights and obligations under the contract, to the detriment of the consumer. Where a term is held to be unfair, the consequence is that it is not binding on the consumer but the contract continues, so far as practicable, to have effect in every other respect.
All insurance contracts must be supported by insurable interest, but the requirement varies from class to class. Life and personal accident policies must under the Life Assurance Act 1774 be supported by insurable interest at the outset, but not at the time of the loss as the insurance is not designed to provide an indemnity. For all other (indemnity) policies there must be actual or anticipated insurable interest at the outset (failing which they are wagers) and there must be insurable interest at the time of loss from an insured peril (failing which the insured cannot prove that he has suffered any loss)
Meaning of "insurable interest"
There has been a gradual expansion in the concept of "insurable interest" especially for the reason of commercial convenience.
The Court of Appeal in Feasey v Sun Life Assurance Corporation of Canada (2003) has held that the defence of lack of insurable interest should not defeat a legitimate commercial transaction. The court ruled that a Lloyd's syndicate had an insurable interest in the wellbeing of the employees of a shipowner whose liability for injury to his employees had been insured with a P&I club and reinsured with the syndicate under what purported to be a personal accident policy.
The Court of Appeal decided that the relationship between the syndicate and the employees was sufficiently close to give rise to an interest in their lives. In so deciding the court approved a line of cases (eg Petrofina (UK) Ltd v Magnaload Ltd  2 Lloyd's Law Rep 91) to the effect that a subcontractor has an insurable interest in the entirety of the works project even though he is contributing to only a small part of the project, on the basis that in the event of any casualty the subcontractor could be deprived of the benefit of his contract. The concept is thus a very wide one.
In Ramco (UK) Ltd v International Insurance Co of Hannover Ltd (2005) the Court of Appeal confirmed that a bailee of goods has an insurable interest in his liability for the goods or alternatively in the full value of the goods. But if he does insure them to their full value then in the event of a loss he must hand over the policy moneys to the owner of the goods.
The question in Ramco itself was in defining the risk protected by the policy, and the Court of Appeal ruled that a policy covering property "held by the insured in trust for which the insured is responsible" extended only to those goods for which the bailee bore legal liability in the event of their loss. The trial judge had ruled that the bailee was entitled to recover the full value of those goods, and although the point did not arise on appeal the Court of Appeal expressed some surprise that a policy which covered only goods for which the insured was liable should be construed as extending to their full value rather than to the more limited amount of the insured's liability.
The most recent case on insurable interest is Western Trading Ltd v Great Lakes Reinsurance (UK) Plc  EWHC 103 (QB) in which an individual, CS, owned two buildings which were managed by his company, WT. WT insured the buildings with the defendant insurers. The buildings were destroyed by fire on 24 July 2012. WT was held to have an insurable interest in the buildings. The evidence showed that WT paid rent to CS on the buildings, managed them and granted leases to sub-tenants. WT had to account to CS for the buildings and was under a duty to reinstate. There was no gambling involved and the insurers had taken the premium without questioning the position.
Note should be made of the repeal of section 18 of the Gaming Act 1845 (which treats wagering contracts as null and void) and its replacement with section 335 of the Gambling Act 2005. The new section treats all gambling contracts as valid. The effect of section 335 on insurance is unclear, but it may be that - life policies aside - the existing requirement for insurable interest at the date of the policy has been removed and that it suffices for recovery that the insured can prove that he has suffered a loss by reason of the occurrence of an insured peril.
The Law Commission discussed reform of the requirement for insurable interest in 'Issues Paper 4' (2008) and in the 2011 Consultation Paper, 'Post Contract Duties and other Issues'. Recently, in 2015, the Law Commission consulted again on insurable interest. The Law Commission, echoing their earlier view, propose to retain insurable interest for four reasons: (1) insurable interest is the hallmark of insurance and distinguishes insurance from other transactions, for regulatory, legal and tax reasons; (2) insurable interest reinforces market discipline and has been said to be one of the factors restraining the insurance industry from trading which is more speculative; (3) it is a barrier against invalid claims and ensures that only one interested party can claim; and (4) there may be other specific uses (eg, identifying the situation of a risk).
The Law Commission have not yet published their report after the consultation.
A misrepresentation, in the general law, is a false statement of fact that induces the other party to enter into the contract.
To affect the validity of the agreement the false statement must:
- be one of fact (rather than a statement of law, or of opinion or belief);
- be made by a party to the contract;
- be material (i.e. something which would influence a reasonable person in deciding whether to enter into the agreement);
- induce the contract (i.e. be something that the other party relied upon in deciding to enter into the agreement); and
- cause some loss or disadvantage to the person who relied upon it.
As laid down by the Marine Insurance Act 1906 s.18(3) (the provisions of the Marine Insurance Act on the duty of good faith applies to marine and non-marine insurance), in business insurance, the insured is not required to disclose facts:
- which diminish the risk;
- which were known or ought to have been known by the insurers;
- which were waived by the insurers; or
- which are covered by an express or implied warranty
The Insurance Act 2015 which was explained above retained the list of facts that need not be disclosed except for the fact which is covered by a warranty. The rules as set out by the MIA 1906 with regard to misrepresentation was also retained. Accordingly, under IA a material representation as to a matter of fact has to be correct and every material representation as to a matter of expectation or belief is true if it is made in good faith.
The rights of insurers to rely upon a good faith defence in respect of private insureds are restricted by the Insurance: Conduct of Business Sourcebook. In most cases it is necessary to prove fraud on the part of the insured.
For more on this see above.
A statement has to be false before there can be misrepresentation. Further, it has to be made by the insured or his agent, and not by an independent expert appointed by the insurers to provide advice on a given risk. These findings were made in International Lottery Management v Dumas (2002), concerning a foreign lawyer appointed to assess the risks of nationalisation of the project to be insured. The lawyer provided incorrect information which was relied upon by the insurers in deciding to accept the risk. It was held that there was no right to avoid on this ground, although the insurers were able to point to other breaches of duty by the insured himself.
Factual statements are to be assessed objectively. Statements of opinion and intention are only false if the insured did not hold that opinion or intention. The point is illustrated by Rendall v Combined Insurance Company of America (2005), in which it was held that an estimate by the insured of the number of days of travelling that would be undertaken by its employees was not a misrepresentation, as the only question was whether the insured had honestly held the belief that the estimate was accurate. Objective truth is irrelevant.
Representations made in negotiations for one contract will not automatically apply to the new contract made upon renewal (see Limit No 2 Ltd v AXA Versicherung AG  where a reinsured's intention regarding the level of deductibles it planned to write was a misrepresentation of fact allowing avoidance of the treaty, but not of the renewed treaty some 19 months later). However, where a material misrepresentation was made to insurers some months before renewal (in the context of improvements required in the insurer's risk survey) and was not subsequently corrected, the misrepresentation was impliedly repeated at renewal. Synergy Health (UK) Limited v CGU Insurance t/a Norwich Union (2010).
The insured can only disclose what he actually knows or ought to know in the ordinary course of his business. The broker's duty to explain to the insured the duty of disclosure was reinforced in Nicholas G Jones v Environcom Ltd (2010).
Under IA the insured ought to know what should reasonably have been revealed by a reasonable search information available to the insured. The agent's knowledge is imputed to the insured that an insured knows what is known by individuals who are responsible for the insured's insurance.
Material facts in non-consumer (business insurance) may relate to the 'physical hazard', that is, the risk of loss, and the 'moral hazard', that is, the characteristics of the insured. Most of the recent cases involve moral hazard.
General dishonesty on the part of the insured, even if directed against his customers or the revenue authorities, is material whether or not the insured has been charged with any offence James v CGU Insurance plc (2002). Criminal convictions, and outstanding criminal charges as well as civil actions against the assured may be material facts. See North Star Shipping Ltd and others v Sphere Drake Insurance plc (2006).
There has been recent clarification on the status of rumours. The general principle is that if there is solid intelligence relating to the physical or moral hazard, then that intelligence is material even if it is, after the placement, shown to have been false. By contrast, mere rumours are not material facts.
There are a number of cases falling into the former category. In International Management Group v Simmonds (2004) intelligence that the Pakistani government intended to refuse to allow its national cricket team to participate in a tournament involving India was held to be sufficiently authoritative to make it material for the purposes of a policy taken out against interruption by the promoters of the tournament. In Brotherton v Aseguradora Colseguros SA (No 3) (2003)media reports circulating in Colombia that the president of the insured bank had been accused of fraud were held to be material for the London reinsurance of a Colombian direct fidelity policy.
One unresolved question is whether insurers who, prior to avoidance, become aware that the allegations are false, retain the right to avoid. In Brotherton the Court of Appeal felt that avoidance remained possible, but in Drake Insurance Co v Provident Insurance Co (2004) a differently constituted Court of Appeal preferred the view that avoidance in such circumstances would be a breach of the insurers' own duty of good faith. In both cases the court agreed that if avoidance was to take place before the truth of the intelligence had been put into question, then the avoidance would be valid even though the intelligence later proved to be false. This sentence is not clear. It would be best to say that in Brotherton the court did not support Colman J's view in Strive Shipping that ''it would be open to the assured to disprove his guilt and thereby to disentitle the insurers to avoidance of the policy'. According to Brotherton, avoidance is not unjustified in the above example given that the duty of good faith is assessed on the basis of facts which exist at the outset of the contract.
The most important developments have taken place with regard to the separate inducement requirement. While materiality is an objective test and it is proved by evidence of prudent underwriter, inducement is a subjective test that the actual insurer has to prove that they were induced to enter in to the contract by a material non-disclosure (business insurance) or misrepresentation. The Courts have discussed if proof of materiality creates a presumption of inducement that upon proof of materiality by the insurer the assured will have to prove that the insurer was not induced to enter into the contract (due to the presumption created by proof of materiality). The English courts view is that there is no general rule as presumption of inducement, Assicurazioni Generali SpA v Arab Insurance Group (BSC) (2003), however, in some cases e.g. where more than one underwriters are involved in insuring the risk and while all others proved inducement only one of them was unable to bring evidence to that effect the court may accept that this created presumption of inducement Paul Fire & Marine Insurance Co (UK) Ltd v McDonnell Dowell Constructors Ltd (1995).
Significant limitations were put on the insurers' right to rely upon inducement in Drake Insurance Co v Provident Insurance Co. (2004). Here the Court of Appeal held that it was not enough for the insurers to show that they would have rejected the proposal or accepted it on different terms. The insured, faced with such evidence, has a right of reply and is to be allowed to show that, with full disclosure at the outset, he might have been able to persuade the insurers to insure on their usual terms. This might be by drawing other matters to their attention, as in Drake, where an accident involving the insured's car had not been the fault of the driver. Or it might be through commercial pressure, as in Bonner v Cox Dedicated Corporate Member Ltd (2005), where the court felt that reinsurers would not, for commercial reasons, have rejected a proposal even had full disclosure of underlying losses been made.
The Insurance Act 2015 codified the inducement test, under the Act the insurer can seek remedy for breach of the duty of fair presentation of the risk only for qualifying breaches. A qualifying breach is a breach without which the insurer either would not have entered into the contract as a whole or would have entered into the contract on different terms.
The duty of disclosure may be waived by the express agreement of the parties. In HIH Casualty and General Insurance v Chase Manhattan Bank (2003) the policy relieved the insured of any duty to disclose material facts: this was held to be a valid clause, although it was noted that if the insured chose to volunteer a statement, the insurers would retain the right to avoid if that statement was false.
Waiver of information may also be found where the insurers:
- ask limited questions only, thereby implying that further information is not required; or
- do not follow up a statement by the insured which indicates that there may be further information available.
The leading case on the latter point is WISE Underwriting Agency Ltd v Grupo Nacional Provincial SA (2004), in which the Court of Appeal held by a 2:1 majority that the reinsured's statement that the insured cargo included "clocks" did not put the reinsurers on notice that there might also be Rolex watches involved. The majority view was that underwriters were entitled to take an answer at its face value and were not put on notice that there might be further undisclosed information. The majority emphasised that the duty is on the assured and unless the assured made a fair presentation, there is no room to discuss waiver.
The right of the insurers to avoid a policy may be lost by waiver or by estoppel. Waiver involves a decision by the insurers to affirm the policy when they have the right to avoid it, whereas estoppel requires reliance by the insured on the insurers' conduct. As stated above, the insurers may expressly agree at the outset to waive their right of avoidance.
The permissible limits of waiver were discussed in HIH Casualty and General Insurance v Chase Manhattan Bank (2003). In this case the House of Lords held that an exclusion may relieve the insured from the consequences of non-disclosure or from the consequences of a negligent or innocent misstatement but the law did not permit the insured to rely upon a waiver clause where he had been guilty of fraudulent misrepresentation.
In Sugar Hut Group & Ors v Great Lakes Reinsurance & Ors (2010) the Judge dismissed the insured's argument of waiver of disclosure saying 'the Claimants cannot rely on factors not being "covered by the questions" if the reality is that they were not covered by the answers".
The insurers may also be treated as having waived their rights if they are aware of their right to avoid but without reserving their rights decide not to rely upon this and instead argue that they have a defence under the terms of the policy itself. This type of waiver is waiver by affirmation. See Moore Large & Co Ltd v Hermes Credit and Guarantee Co plc (2003), where it was held that it was too late for the insurers to raise a disclosure defence at the last moment in legal proceedings.
Again, if insurers accept future premiums and agree to a renewal Drake Insurance Co v Provident Insurance Co. (2004)) or seek to terminate the policy by relying on its express terms WISE Underwriting Agency Ltd v Grupo Nacional Provincial SA (2004)) they can scarcely argue that they have decided to avoid the policy.
The insurer is required to communicate avoidance of the policy with the assured. In Argo Systems FZE v Liberty Insurance Pte Ltd (2011) the insurer, although relied on misrepresentation initially in his defence in an action seven years ago, has been silent for seven years, neither communicated avoidance with the assured nor offered to return the premium. The action seven years ago in the United States was rejected for lack of jurisdiction. When the assured sued the insurer in England seven years later the insurer purported to avoid the contract. It was held that seven years silence was too long and it was waiver of avoidance for breach of the duty of good faith.
By contrast, a liability insurer is not to be treated as having waived any right to avoid by informing a potential claimant against the insured that the insurers regard themselves as 'on risk'. Such a statement does not amount to an acceptance of liability, and in any event it could only be relevant if it was made to the insured itself. This statement will need a reference but I cannot know what case you are referring to. You may want to check the document you took this from.
IA 2015 did not change the position regarding waiver by affirmation. One point is worth noting under IA that the insured satisfies the duty of disclosure if the insured gives the insurer sufficient information to put a prudent insurer on notice that it needs to make further enquiries for the purpose of revealing those material circumstances.
In non-consumer (business) insurance, one of the agent's main duties is to pass on information. For example, in non-consumer (business) insurance, an insurance broker will often be required to pass on information about a risk, which he has acquired from the insured, to the insurers.
Under the law of agency any knowledge which an agent possesses is imputed to the principal. In other words, the law assumes that the principal is aware of information which has been given to the agent or, to put it another way, what is known by an agent is deemed to be known to the principal also. This is of particular importance in relation to the duty of disclosure in non-consumer (business) insurance.
The ambit of the duty of disclosure where brokers are involved has been raised in a number of recent cases. The principles as evolved by these cases are as follows:
- Where insurance is placed by a broker, the broker owes an independent duty of utmost good faith to the insurers, and if material facts are withheld the insurers are entitled to avoid the policy. If the broker makes a fraudulent or negligent false statement the insurers may either avoid the policy or exercise their alternative to sue the broker for damages in tort. A broker cannot face liability in damages for a mere non-disclosure or for an innocent false statement, so the only remedy in those cases is avoidance HIH Casualty and General Insurance v Chase Manhattan Bank (2003).
- The only agent of the insured who owes a duty of disclosure to the insurers is the placing broker. If some other agent of the insured (for example, a producing broker or underwriting agent) is in possession of material facts then that agent has no duty to disclose those facts to the underwriters PCW Syndicates v PCW Reinsurers (1996); Group Josi v Walbrook Insurance (1996).
Under IA 2015 an agent's knowledge is imputed to the insured. An insured knows what is known to one or more of the individuals who are responsible for the insured's insurance.
It was established by the House of Lords in Bank of Nova Scotia v Hellenic Mutual War Risks Association (Bermuda) Ltd (The Good Luck) that a breach of warranty terminateds cover automatically from the date of breach. The risk terminates automatically, the insurer is discharged from liability, however, unless the parties expressly agreed otherwise, the assured is still obliged to pay the premium. The same rule has been applied in marine and non-marine cases.
A warranty is, essentially, a promise made by the insured relating to facts or to something which they agree to do. A warranty may relate to past or present facts (i.e. be a promise that something was so or is so), or it may be a continuing warranty, in which the insured promises that a state of affairs will continue to exist or they will continue to do something.
A warranty must be exactly complied with. If it is broken, cover terminates even if the breach did not cause or have any connection with a loss and even if the breach has been remedied by the time a loss occurs.
As stated above, termination arises from the date of breach. If the warranty is as to past or present facts, cover (and, effectively, the contract) will terminate ab initio (from the beginning) since by definition the breach will exist from the start of the contract.
Warranties can arise in three ways:
- as express warranties;
- as implied warranties (in marine insurance only); and
- from a 'basis of the contract' clause (in non-consumer (business) insurance only).
The Consumer Insurance (Disclosure and Representations) Act 2012 (discussed earlier in this text) abolishes 'basis of the contract' clauses in consumer insurance contracts.
IA 2015 abolished the basis of the contract clauses in business insurance. The Act will come into force in August 2016. IA also reformed remedy for breach of a warranty. Accordingly, the cover does not automatically terminate but it is suspended after the insured breaches the warranty and until the breach is remedied. Strict compliance is still required, irrespective of the cause of the loss, the insurer is not liable for losses occurring between the warranty is breached and remedied. The difference between the current applicable law and IA is that under the latter breach can be remedied.
Policy terms which impose obligations on the insured are of three broad types:
- First, there are conditions precedent which have to be fulfilled before the contract becomes binding or the risk attaches under the policy. One example here may be payment of the premium.
- Secondly, and assuming that there is a binding contract under which the risk has attached, there may be conditions precedent to the liability of the insurers to pay a claim. Such a condition will list the steps required of the insured in order to make good his claim against the insurers. Breach of a condition precedent is fatal to the insured's claim, whether or not the insurers have suffered any prejudice by reason of the breach.
- Thirdly, there are bare conditions, which cover exactly the same ground as conditions precedent to liability but which are not expressed as conditions precedent. A bare condition is subject to ordinary contractual analysis:
- If it is an intrinsically important term going to the heart of the contract then its breach will amount to a repudiation of the policy and the insurers can treat themselves as discharged as of the date of the claim to which it relates.
- If it is an intrinsically minor term, then the only remedy is damages for loss suffered by the insurers.
- If the term is incapable of classification in that the consequences of its breach may be serious or trivial depending on what occurs, then the insurers will only have the right to treat the contract as repudiated if the insured's breach goes to the very heart of the contract, failing which their remedy is damages only.
The English courts will not construe a condition as a condition precedent unless the wording forces them to do so. This is so because they regard the idea that a claim can be lost for even a minor and technical breach of the term as a draconian outcome which is to be avoided. For this reason there are numerous cases in which the courts have either:
- refused to construe a condition as a condition precedent unless they are driven to do so (see George Hunt Cranes Ltd v Scottish Boiler and General Insurance Ltd (2002), Cornhill Insurance plc v D E Stamp Felt Roofing Contractors Ltd (2002); or
- if the wording of the clause demands classification as a condition precedent, construed the obligations contained in the clause as narrowly as possible as in LEC (Liverpool) v Glover (2001), although if there is no time limit for compliance the court will require compliance within a reasonable time Shinedean Ltd v Alldown Demolition (2006).
- However, in Aspen Insurance UK Ltd & Others v Pectel (2008) a general provision stating that insurers' liability was conditional on the insured observing the terms and conditions of the policy was effective in making a notification clause a condition precedent.
The principle that breach of a bare condition does not give the insurers the right to treat the policy as repudiated for breach other than in wholly exceptional circumstances, and that prejudice to the insurers is not sufficient for this purpose, led Waller LJ in Alfred McAlpine v BAI (Run-Off) Ltd (2000) to suggest that there was an intermediate possibility open to insurers. This was that a breach of an innominate condition which caused serious prejudice to the insurers could amount to a repudiation of the claim to which the condition related. The result would be that the insurers would have the right to reject the claim, while the rest of the policy would remain untouched and future claims would not be affected.
This concept was recognised in a number of later cases, and actually applied in Bankers Insurance Co v South (2004) , a case in which the insured's notification of a claim against him was made to the insurers several years after the events giving rise to the claim.
However, in Friends Provident Life and Pensions Ltd v Sirius International Insurance Corporation (2005) the Court of Appeal, Waller LJ dissenting, held that the recognition of the concept of repudiation of a claim in Alfred McAlpine was misconceived, and that in the event of the breach of an innominate term the only possible rights open to the insured were to treat the policy as a whole as repudiated in the event of a breach going to the root of the contract (a nonsensical concept if the term broken is simply a claims clause) or to seek damages for breach of contract.
Friends Provident was preferred to Alfred McAlpine in Ronson International Ltd v Patrick (2006) (which was affirmed by the Court of Appeal in 2006 on other grounds). The position thus remains that a breach of a policy term which is not a condition precedent is unlikely to have any adverse consequences for the insured. An illustration is Glencore International AG v Ryan, The Beursgracht (2002) , in which the insured under an obligatory declaration policy failed to make a declaration at the appropriate time and sought to make a declaration after a loss had occurred. The Court of Appeal held that the risk had attached without a declaration, given that the policy was obligatory, and accordingly that the insurers' only complaint was breach of the notification condition. However, as there was no repudiation of the policy involved, the insurers had no defence.
A policyholder is not relieved of the duty to comply with the conditions of the policy even if told by the insurers that they do not intend to meet the policyholder's claim: Diab v Regent Insurance Co (2006).
If the insurer does not prove that the breach of a condition was so serious that goes to the root of the contract, can claim damages if damages proved. In Milton Keynes BC v Nulty (2011) it was held that the late notification prejudiced the insurer's right and the insurer was entitled to deduct 15% from the insured claim.
The remedy for breach of the duty of good faith in non-consumer (business) insurance is 'avoidance' only. Therefore, while some contractual provisions may impose a continuing duty of good faith, remedy for the breach of such a contractual provision should be considered carefully.
For consumer insurance, the 2012 Act expressly states that it regulates the pre-contractual duty of good faith; thus, it has left the post-contractual duty intact.
The parties to an insurance contract may agree that the duty to disclose material acts applies at the post-contractual stage but unless they agree on this expressly the pre-contractual duty of disclosure end as soon as the contract of insurance is concluded. The parties are still under the duty to act in good faith throughout their contractual relationship but the scope of this duty is not the same as the pre-contractual duty. For instance, if the insurer takes over defending a third party claim against the insured the insurer is expected to take care of the insured's interest in conducting such defence as well as protecting its own interest. The Insurance Act 2015 does not touch upon any kind of post-contractual duty of good faith, thus, this is left to common law.
As a general rule, English law does not allow a person who is not a party to an insurance policy to make a claim under that policy. There are, however, various exceptions to this principle, which arise in the cases of co-insurance, the express conferring of third-party benefits and assignment.
Co-insurance is a generic term for any policy which has two or more insureds. The term covers joint insurance and composite insurance. Joint insurance arises where the parties have identical interests in the insured subject matter (co-ownership), whereas composite insurance arises where the parties have different interests in the insured subject matter (for example, landlord and tenant, mortgagor and mortgagee).
A joint policy is treated as a single indivisible contract, so that if the insurers have a defence against one co-insured the other is automatically precluded from recovering. By contrast, a composite policy is a collection of separate contracts between the insurers and each insured, so that if one insured is precluded from recovering by reason of his conduct the rights of the others are unaffected FNCB v Barnet Devanney (Harrow) Ltd (1999); Arab Bank v Zurich Insurance (1999).
The common law recognised the doctrine of privity of contract, whereby a third party could not bring an action on a contract between two other persons, even if the contract expressly provided for him to receive benefits under the contract. The privity rule was modified by the Contracts (Rights of Third Parties) Act 1999 that a third party can take the benefit of a policy (or for that matter any other contract) on the same terms as the insured if either the policy confers upon him a right of enforcement or the policy is clearly made for his benefit.
It is possible to contract out of the 1999 Act, and many policies do contain an exclusion as a standard provision. If the 1999 Aact is excluded, or if it remains applicable but the policy is not designed for the benefit of the third party, the third party cannot be treated as deriving any rights from the policy (see Caledonia North Sea Ltd v British Telecommunications plc (2002), discussed under Subrogation).
Life and marine policies are assignable, but all other forms of policies cannot be assigned without the consent of the insurer. Difficulties may arise where the insured sells the insured subject matter to a third party. The general rule is that the sale of the subject matter terminates the policy, because the insured no longer has any insurable interest. In Dodson v Peter H. Dodson (2001) the Court of Appeal held that the sale of a motor vehicle did not bring the motor policy to an end, because the policy remained in force insofar as it allowed the insured to drive other vehicles. This is an important decision because it has in effect overturned a consistent line of earlier authority for the proposition that the sale of a motor vehicle terminates the policy.
Policy provisions will impose various obligations on the insured, including notification of losses, co-operation with the insurers in the conduct of their investigations and not making fraudulent claims.
When dealing with consumers, insurers are under a duty imposed by the Insurance: Conduct of Business Sourcebook to act fairly in the claims-handling process. For more on this see above.
The decision in Friends Provident Life and Pensions Ltd v Sirius International Insurance Corporation (2005) discussed in the section above on classification of terms is of major significance for insurers, as it will in effect deprive them of any right to refuse to pay, irrespective of the fact that they have suffered serious prejudice, where the claims condition broken by the insured is not a condition precedent. (However, note Milton Keynes v Nultyas stated above)Plainly, breach of a claims provision is not a repudiation of the entire policy, and while insurers may have the right to claim damages for any loss which they have suffered there is only one case Milton Keynes in which insurers have ever recovered such damages. In Friends Provident it was doubted whether damages would ever be a realistic possibility, as the amount of loss suffered by the insurers would be speculative and difficult to calculate.
A deliberate breach of a policy condition does not give the insurers any additional rights, The Mercandian Continent (2001).
A denial of liability by the insurers does not relieve the insured of his obligation to comply with claims provisions in the event that he wishes to pursue his claim Diab v Regent Insurance Co (2006).
Liability policies generally require the insured to notify the insurers of circumstances which may or are likely to give rise to a claim. The word "likely" refers to a better-than-evens chance Layher v Lowe (2000) and the courts have stressed that the mere fact that a third party has suffered an injury does not make it likely that a claim will be made against the insured, particularly if at the time the third party has indicated that he did not attribute any blame to the insured. See Jacobs v Coster (2000), relating to a third party slipping on a patch of oil at the insured's premises.
At one time it was believed that the duty not to make a fraudulent claim formed a part of the wider continuing duty of utmost good faith imposed upon the insured. That idea was rejected by the Court of Appeal in Agapitos v Agnew (2002), and it is now established that a fraudulent claim does not allow the insurers to avoid the policy but rather gives them the right to refuse to pay the claim. Under common law it is unclear whether insurers also have the right to treat the policy as repudiated for breach, so that later genuine claims are also lost.
The point was raised but not decided in AXA General Insurance Ltd v Gottlieb (2005), in which the insured suffered four genuine losses during the currency of the policy. Exaggerated claims were subsequently made after the policy had expired in respect of the two earlier losses, and it was held by the Court of Appeal that the fraud was backdated so as to exclude the two claims to which the fraud related. However, because the policy had expired, it was too late for the insurers to terminate it for breach and accordingly even if that right existed it could not be exercised. It followed that the two later claims had to be paid.
As stated above IA 2015 has introduced a statutory remedy for making a fraudulent claim. Section 12 provides that if the insured makes a fraudulent claim under a contract of insurance the insurer is not liable to pay the claim and the insurer may by notice to the insured treat the contract as having been terminated with effect from the time of the fraudulent act.
Agapitos also lays down the definition of a fraudulent claim. A claim is fraudulent if:
- the insured deliberately caused his own loss;
- the claim was in respect of a loss which had not occurred;
- the claim was excessive, either in absolute or relative terms (see Galloway v Guardian Royal Exchange (UK) Ltd (1999), Direct Line Insurance v Khan (2002) - claims for types of loss not actually suffered);
- the insured, having made a claim, did not withdraw it after discovering that there had been no loss or a lesser loss;
- the insured deliberately suppressed a known defence; or
- the insured used fraudulent means or devices to induce the insurers to pay the claim.
The last category is potentially the most far-reaching, as it contemplates that the insured has suffered a genuine loss but has supported his claim with fraudulent statements. This was the case in Eagle Star Insurance Co Ltd v Games Video Co SA (The Game Boy) (2004), where the insured fraudulently created documents in order to demonstrate the extent of his loss, and in Stemson v AMP General Insurance NZ Ltd (2006) , where the insured falsely stated prior to the fire to his mansion that he had not been trying to sell it, and in Yeganeh v Zurich plc (2010) where the insured included a false claim for expensive clothing as part of a schedule of damaged contents. In Sharon's Bakery (Europe) Ltd v AXA Insurance UK plc (2011) the Court held that use of a false document in support of a loan application did constitute material non-disclosure of moral hazard, and that the insurer was entitled to avoid the policy. The insured had also used that false document to support its claim and this was 'fraudulent means or devices' meaning that the insured forfeited all benefit under the policy. In Aviva Insurance Ltd v Brown (2011) the court accepted that the fraudulent element of a claim need not be fraudulent to a 'substantial extent' but must not be 'immaterial or insubstantial' in order to invalidate the whole claim.
The most recent example of use of fraudulent means and devices in which the assured lost his genuine claim for making up a little story about an alarm going off (which indeed never happened) in explaining how the loss occurred is Versloot Dredging BV v HDI Gerling Industrie Versicherung AG (2014) which is currently under appeal before the Supreme Court.
In Joseph Fielding Properties (Blackpool) Ltd v Aviva Insurance Ltd (2010) the judge rejected an argument by the insured that a condition allowing avoidance in the event of a fraudulent or intentionally exaggerated claim did not apply where the insured could have made a lesser claim in a non-fraudulent manner - the insurer's denial of indemnity was upheld. In Nield v Loveday (2011) the claimant who had fraudulently claimed that he had a serious back injury was jailed for nine months for signing statements of truth that he must have known were untrue.
In Super Chem Products Ltd v American Life and General Insurance Co Ltd (2004) the Privy Council rejected the reasoning in Jureidini v National British and Irish Millers Insurance Co Ltd (1915) and held that insurers who make a fraudulent claim defence do not thereby deprive themselves of the right to rely upon other defences under the policy (as long, of course, as those defences have been properly asserted or rights have been reserved).
Insurers are liable only if the proximate cause of the loss is an insured peril. In determining the proximate cause from a series of causes, the courts look not to the last cause but to that which was the effective cause Leyland Shipping Co Ltd v Norwich Union Fire Insurance Society Ltd (1918).
In the event that it is impossible to determine which of two (or more) causes is the proximate cause, the rule is that if;
- one of the causes is covered by the policy and the other is not mentioned, ie, uninsured, the insured peril prevails
- if one of the causes is covered by the policy (insured peril) and the other is excluded, the excepted cause is to be given primacy.
In general the burden of proving the proximate cause of the loss falls on the insured, but if the policy covers all risks then it suffices for the insured to show that he has suffered a loss as a result of an accidental event. The burden then shifts to the insurers to demonstrate that the proximate cause was excepted.
The problem of concurrent causes is illustrated by Midland Mainline Ltd v Commercial Union Assurance Co Ltd (2004), which arose out of the Hatfield rail disaster. Following the crash Railtrack closed lines and imposed maximum speed limits on other parts of the track which were worn, thereby causing train operators substantial business interruption losses. The train operators' policy excluded liability for consequential loss caused by wear and tear. The Court of Appeal held that the imposition of speed limits and the wear and tear on the track were concurrent proximate causes of the loss, with the result that the insured was unable to recover.
The concurrency point arose again in Tektrol Ltd v International Insurance Co of Hanover Ltd (2005). Here the claimant possessed five copies of some computer code. Two of the copies were affected by a randomly sent computer virus and became unusable, and in a later incident the remaining three copies - on a computer and in paper form - were stolen. The policy was in all-risks form but excluded loss of information on a computer caused by "malicious persons" and also "erasure loss distortion or corruption of information on a computer system or other records programmes or software". It was common ground that the virus and the theft were concurrent proximate causes so that if either of them was excluded the insured could not recover.
In the event the Court of Appeal held (by a majority, Carnwath LJ dissenting but expressing his happiness at being wrong) that neither loss was excluded. The virus had not been targeted specifically at the insured, whereas the context required that acts of malicious persons had to be targeted acts. And the theft of the computer and paper copies was not "loss of information", as what was contemplated was electronic loss.
Carnwath LJ was critical of the wording, saying "Although it is described as an 'all risks' policy, one has to search long and hard, through a bewildering and apparently comprehensive list of exclusions, to discover the extent to which any risks are in fact covered."
Subrogation is the right of insurers, having indemnified the insured, to exercise the insured's rights against any third party responsible for the insured's loss. The action must be brought in the name of the insured. A subrogation action cannot put the insurers in any different position to the insured, so if the insured for some reason does not have a cause of action then nor do the insurers. Subrogation in co-insurance had been controversial. It had been suggested that a subrogation action against a co-assured should not be permitted because of the principle of circuity. This view did not find much support and the courts also discussed if there is an implied term in the insurance contract or in the underlying contract between the parties which require the parties to be co-assureds to the effect excluding the insurer's subrogation rights against the co-assureds.
In Tyco Fire & Integrated Solutions (UK) Ltd (formerly Wormald Ansul (UK) Ltd) v Rolls Royce Motor Cars Ltd (formerly Hireus Ltd) (2008) Rix LJ stated that the insurer's subrogation rights against a co-assured may be expressly excluded in an insurance contract. If there is not an express exclusion, only having an underlying contract between the parties which requires the parties to be co-insured under the same contract does not mean that the insurer's subrogation rights against co-assureds is excluded. According to Rix LJ, the underlying contract between the parties must be looked at, if that contract excludes the relevant liability between the parties, the insurer will not have any subrogation rights - there will be no right to subrogate into due to the exclusion. Although Tyco had been applied in a number of cases, the most recent Court of Appeal case expressed a different view. In Gard Marine & Energy Ltd v China National Chartering Co Ltd (The Ocean Victory) (2015) the Court of Appeal held that there was no need for an express exclusion of subrogation where the parties agreed that they were to be insured in joint names. In that situation, either party was to look only to the insurers. The Court of Appeal preferred the approach in GD Construction (St Albans) Ltd v Scottish & New Castle Plc (2003) that "the prima facie position where a contract requires a party to that contract to insure should be that the parties have agreed to look to the insurers for indemnification rather than to each other."
Although the basic rule remains that the insurers may only sue in the name of the insured, in Graham v Entec Europe Ltd (2004) it was held that the limitation period for claims in tort, which runs for three years from the date on which damage could have been discovered, was to be based on the knowledge of the subrogated insurers and not the knowledge of the insured because the claim in reality was being brought against the third party by the insurers.
The insurers have no better right against a third party than was possessed by the insured himself.
The insured is entitled to insure as many times as he wishes and with as many different insurers as he wishes ("double insurance"), and in the event of a loss he may choose which insurers are to pay unless the policy contains provisions which restrict the liability of the insurer in question either absolutely or with regard to its rateable proportion of any loss. However, the insured can never recover more than an indemnity. In the event that two or more insurers do face liability for the same loss, the paying insurer is entitled to recover from the other insurers, by way of contribution, its share of the loss.
There has been a series of cases on contribution, with a good deal of debate as to whether the right of contribution is to be ascertained at (a) the date on which payment was made by the paying insurer, or (b) the date of the insured loss. The difference may be illustrated as follows. If both A and B are potentially liable, and a claim is made against A but not B, then:
- If contribution is to be ascertained at the date of the payment, it may be that B has a defence under the policy based on the insured's late claim. A cannot therefore seek contribution.
- If the date at which the right of contribution is to be determined is the date of the claim, then any subsequent defences obtained by B against the insured cannot be pleaded by way of defence to A's contribution claim.
The most recent cases on the point are in conflict. In O'Kane v Jones (The Martin P) (2005) a loss occurred and then the insured and insurer B agreed to cancel B's policy so that the entire loss would fall on insurer A. The trial judge held that insurer A acquired contingent contribution rights at the date of the loss, so that the subsequent cancellation could not affect A's right to seek contribution when it paid the insured.
However, in Bolton Metropolitan Borough Council v Municipal Mutual Insurance Ltd (2006) the Court of Appeal - without deciding the point - expressed a preference for the opposite view, so that any defence which B acquires against the insured after the loss can be pleaded as a defence to a contribution claim.
O'Kane v Jones also considered the various methods of calculating contribution, but in the end it was not necessary for the court to choose between the "maximum liability" and "independent liability" measures, since on the facts they gave rise to the same result.
It remains the law that if an insurer pays voluntarily, it cannot seek contribution. This issue arises where the paying insurer's policy contains a rateable proportion clause which requires only payment of its share of the loss, but the insurer nevertheless pays the full loss and seeks to recover the surplus above its rateable proportion from other insurers. However, important inroads were made into the "volunteer" principle in Drake Insurance Co v Provident Insurance Co (2004). In this case the Court of Appeal held that if the paying insurer prior to payment has sought to persuade other insurers to make payment to the insured but they have refused, the paying insurer is not to be regarded as having paid voluntarily and is entitled to enforce contribution rights.
Liability insurance may be written on one of three bases:
- events, where the insurers are liable for acts of negligence occurring during the currency of the policy;
- losses occurring, where the insurers are liable for damage suffered during the currency of the policy;
- claims made, where insurers are liable for claims first made against the insured during the currency of the policy.
Liability insurance is compulsory in respect of motor vehicle accidents ( Road Traffic Act 1988), accidents at work (Employers' Liability (Compulsory Insurance) Act 1969) and in a number of other cases, for example, oil pollution and riding establishments. Liability insurance is required by many professional bodies, including those regulating solicitors and accountants. In all cases, regardless of whether the insurance is compulsory or not, if the insured becomes insolvent then the third party victim may, having established the insured's liability to him, bring a direct action against the insurers (Third Parties (Rights against Insurers) Act 1930. (The 2010 Act has not come into force yet).
Claims-made policies generally contain extension clauses whereby the insured is entitled to notify to the insurers during the currency of the policy circumstances of which the insured has become aware which may lead to a claim. The test for deciding if a circumstance is "likely" to give rise to a claim is objective. The question is whether the circumstance could reasonably be regarded by someone in the insured's position as something likely to give rise to a claim Laker Vent Engineering Ltd v Templeton Insurance Ltd (2009).
If there has been valid notification (and in particular there has been compliance with the obligation to notify as soon as is practicable) the insurers so notified are liable for any claim made, against the insured even though the claim is not made until after the expiry of the policy HLB Kidsons v Lloyd's Underwriters (Costs) (2007).
Many liability policies are expressed to cover "accidents". Whether damage suffered by a third party is an accident has to be looked at from the point of view of the insured, so that if the insured deliberately intended to inflict harm then the loss is not accidental and there is no right of recovery. This was held to be the case in Charlton v Fisher (2001), in which a deliberate running down by the insured driver of a vehicle was held to preclude a claim by him under his motor policy.
By contrast, in Hawley v Luminar Leisure plc (2006) it was held that injuries inflicted on a third party by a temporary employee of the insured (a bouncer at the insured's nightclub) were accidental from the insured's point of view even though the employee's acts were plainly intended to cause harm. The court's view was that unless the insured authorised such conduct, or (at the very least) was aware of it and did nothing to stop it, the third party's injuries were accidental from the insured's point of view.
The obligation of a liability insurer to provide an indemnity arises when the insured's liability to the third party is established and quantified by means of a judgment, an arbitration award or a settlement. In the case of a settlement which has not been approved by the insurers in advance, the insured must go on to show that the settlement was one which reflected the insured's actual legal liability. One way of doing this is for the insured to seek a declaration from the court to the effect that it faced actual liability to the victim. This was the mechanism adopted - albeit unsuccessfully - in King v Brandywine Reinsurance Co (2005), a reinsurance case involving the settlement of losses following the grounding of the Exxon Valdez.
A significant barrier to proof of loss was erected by Colman J in Lumberman's Mutual Casualty Co v Bovis Lend Lease Ltd (2005), in which the insured settled various claims and counterclaims in a global settlement which did not seek to identify how the final sum - £15m paid to the insured - had been calculated. The insured argued that, but for its own liability in respect of a number of insured and uninsured claims, it would have recovered up to £50,000 from the third party. Colman J held that a settlement which did not apportion liabilities was not a settlement at all for the purposes of a liability policy, and thus could not be used as the basis for any claim against the insurers. It was not, therefore, open to the insured even to attempt to prove that it would have faced liability to the third party as a matter of law.
However, Colman J's reasoning was rejected by Aikens J in Enterprise Oil Ltd v Strand Insurance Co Ltd (2006). In that case it was decided that a settlement could be used to found an action against the insurers even though the insurers themselves were free to raise the point that the settlement was not based on the insured's legal liability or otherwise was not covered by the terms of the policy.
The most important formality required for compliance with the legislation is contained in RTA 1988, s.147, which requires a certificate of insurance to be delivered to the assured by the insurer. RTA 1988, s 147(1) specifically states that a policy of insurance is not to be of any effect until a certiﬁcate of insurance has been delivered to the assured by the insurers. The need for the surrender of the certificate has been repealed by the Deregulation Act 2015.
Until the implementation of the Deregulation Act 2015, s 9 and sched 2, the certificate had one further, and important substantive, function, in that a third party had no rights unless a certificate was in the hands of the assured. It now suffices that a policy has been issued or a security has been given.
There have been numerous significant developments in motor insurance. On the legislative front, changes to EU law have led to the adoption of three sets of regulations:
- The European Communities (Rights against Insurers) Regulations 2002 (SI 2002 no 3061) confer upon the victim of a negligent driver the right to sue the driver's insurers directly without first obtaining a judgment against the driver himself. This provides a simpler mechanism to the pre-existing procedure in the Road Traffic Act 1988, (which may still be required in a small number of cases. Under the 1988 act the victim has to obtain a judgment against the driver, which he can then enforce against the driver's insurers.
- The Motor Vehicles (Compulsory Insurance) (Information Centre and Compensation Body) Regulations 2003 (SI 2003 no 37), are concerned with the situation in which a UK resident is injured elsewhere in the EEA or in a green card country. The regulations allow the victim to recover directly from the MIB if the negligent driver's insurers refuse to pay.
- The Motor Vehicles (Compulsory Insurance) Regulations 2007 (SI 2007 no 1426) have raised the minimum sum insured for damage to property arising out of a single accident from £25,000 to £1m.
The authorities on the 1988 act have concerned a number of matters.
In Slater v Buckinghamshire County Council (2004) it was held that injuries suffered by a potential passenger of a minibus in running across the road to catch the minibus (allegedly the result of the negligence of the crew of the minibus) were not "caused by or arising out of the use of" a motor vehicle as required by the legislation. This was because the necessary proximity between the use of the vehicle and the accident had not been established.
A contrasting decision is Dunthorne v Bentley (1999), in which a driver of a vehicle ran out of petrol and ran across the road in order to summon assistance. The subsequent accident caused by her conduct was held to be one arising out of her use of the vehicle.
It is a requirement of the 1988 act for the victim of a negligent driver to notify insurers of the proceedings against the driver within 14 days of their commencement as a precondition of enforcing any subsequent judgment against them. In Nawaz and Hussain v Crowe Insurance Group (2003) it was held that this requirement was satisfied by a telephone conversation between a trainee solicitor acting for the victim and the secretary to the solicitor acting for the insurers.
Charlton v Fisher (2001), a deliberate running-down case, decided that although the driver has no cause of action against his insurers, the victim has a direct cause of action against the insurers under the 1988 act on the basis that deliberate running-down is a risk in respect of which compulsory insurance is required. This means that there is no need for recourse to the MIB if the driver can be identified.
The Court of Appeal in Lloyd-Wolper v Moore (2004) confirmed that if the owner of a vehicle allows an uninsured person to drive it, and does not impose any condition on the driver that he must obtain insurance, then the owner is liable to the insurers to indemnify them for any sums which they have been required to pay to the victim of the uninsured driver.
If a passenger in a motor vehicle knows that the vehicle has been stolen or unlawfully taken, that passenger is unable to enforce against the insurers a judgment which has been obtained against the driver McMinn v McMinn (2006).
As far as the MIB itself is concerned, a new uninsured drivers agreement took effect on 1 October 1999 and a new untraced drivers agreement took effect on 14 February 2003. The agreements, and in particular the untraced drivers agreement, contain important differences from earlier agreements. Indeed, the earlier untraced drivers agreement was held by the European Court of Justice in Evans v Secretary of State for the Environment, Transport and the Regions (2004) not to comply with EU law in a number of important respects, in particular as regards the absence of provision for interest and for legal costs.
There have been a number of cases on the agreements. In White v White (2001) and Akers v Motor Insurers' Bureau (2003) it was confirmed that the exception in the uninsured drivers agreement for passengers who knew or ought to have known that the vehicle was uninsured referred only to actual knowledge. EU law did not permit it to extend to reasonable knowledge.
Pickett v Motor Insurers' Bureau (2004) concerned a passenger who attempted to persuade the driver of an uninsured vehicle to stop and let her out. The Court of Appeal held that she had not done enough prior to the accident to withdraw her consent to being carried, so that she was precluded from recovery from the MIB.
EUI Ltd v Bristol Alliance Partnership Ltd (2012) On 12 December 2008 the Mr Williams damaged B's store in Bristol by colliding with it in his car. B's first party property insurers paid the loss and exercised subrogation rights against Mr Williams to recoup the loss. The issue was whether any damages awarded against Mr Williams had to be paid by his own motor liability insurers under his motor policy or whether the claim was to be made against the Motor Insurers Bureau on the basis that Mr Williams had no insurance. The policy excluded loss caused by a deliberate act. The insurers were not liable. It was held that the 1988 Act permitted exclusions from cover other than those listed in section 148, and section 151(2) expressly provided that insurers were only required to meet a judgment if it was in respect of a liability covered by the terms of the policy to which the certificate relates. The EU law did not prevent the use of policy exclusions.
Delaney v Pickett (2011) the claimant was seriously injured in a motor vehicle accident while being carried as a passenger by the defendant. At the time of the accident both were in possession of small quantities of cannabis. The MIB argued that it was discharged from liability under clause 6(1)(e)(ii), namely that 'the vehicle was being used in the course or furtherance of a crime'. The Court of Appeal held clause 6(1)(e)(ii) gave rise to a defence to the MIB, as there was no basis for confining it to serious crimes. The claimant then claimed damages in Delaney v Secretary of State for Transport (2014) from the Secretary of State for Transport for breach of Council Directive 84/5/EC, article 1.4 (now codified in European Parliament and Council Directive 2009/103/EU), which provides that each Member State is to set up or authorise a body with the task of providing compensation for damage to property or personal injuries caused an uninsured vehicle, subject to the exception that Member States may exclude the payment of compensation by that body in respect of persons who voluntarily entered the vehicle which caused the damage or injury when the body can prove that they knew it was uninsured. The claimant argued that clause 6(1)(e)(iii) was incompatible with Article 1.4 and that insofar as he had been unable to obtain compensation by reason of the clause he was entitled to recover damages for a serious breach of the obligation to implement EU law. The court held that the exception in clause 6(1)(e)(iii) was not consistent with the Second Council Directive. The Secretary of State was guilty of a serious breach of Community. The Secretary of State's appeal was rejected by the court of Appeal (2015). The exclusions of MIB coverage "where the vehicle was being used in the course or furtherance of crime or was being used as a means of escape from or avoidance of lawful apprehension" were removed by the 2015 Uninsured Drivers Agreement.
The Uninsured Drivers Agreement, dated 3 July 2015, replaces earlier agreements made in 1946, 1972, 1988 and 1999. It is concerned with accidents occurring on or after 1 August 2015. The 1999 Agreement continues to apply to accidents occurring on or after 1 October 1999. The Uninsured Drivers Agreement is concerned with cases in which the driver responsible for causing a motor vehicle accident is identified but is not insured against the risks for which insurance is required under the Road Traffic Act 1988. This may be because he has no insurance at all, he has a policy under which the insurers have a defence, or his insurers are insolvent and cannot satisfy any liability which he has incurred. The 2015 Agreement removed the exclusions of 'use of vehicle'.
AXN v Worboys (2012) W, a taxi driver, sexually assaulted a number of women in his taxi after persuading them to accept alcoholic drinks laced with sedatives. It was accepted that his concduct was deliberate and fell outside his licensed activities as a taxi driver. The victims brought claims against W for damages. The question was whether W's motor liability insurers, who had issued compulsory motor cover complying with the Road Traffic Act 1988, were liable to meet the claims. It was held that they were not as the injuries did not arise out of the use of a vehicle on a road or other public place in accordance with RTA 1988, s. 145(3)(a).The injuries of the claimants were caused by the criminal acts of W in administering sedatives and then in attempting to or actually assaulting the claimants.
In McCracken v Smith  EWCA Civ 380 the claimant was the passenger on the back of a stolen motor cycle. The driver was underage, unlicenced and uninsured. The claimant was injured when the motor cycle, which was being driven at an excessive speed, collided with a van being driven negligently by a third party. The Court of Appeal held that the claimant had no cause of action against the driver of the motor cycle, by reason of participation in an illegal enterprise. The claimant however was held to have had a cause of action against the driver of the van. The Court of Appeal held that there was no causal link between the claimant's illegality and his injury. The van driver owed a duty of care to the claimant, and that duty had been broken. The contributory negligence principle applied that the injuries suffered by the claimant were partly caused by that negligence, and partly caused by the claimant's own participation in an illegality, and on that basis the claimant had a good claim but damages were reduced by 50% - after an initial deduction of 15% for not wearing a crash helmet - to reflect the parties' respective contributions to the loss.
Turning finally to the standard "social, domestic and pleasure purposes" coverage clause, coupled with the "hire or reward" exclusion in motor policies, in Keeley v Pashen (2005) it was held that a taxi driver who had just dropped off his last fare and had an accident while returning home was covered by his policy. This was because at the time of the accident he was no longer using the vehicle for business purposes.
- A statement has to be false before there can be misrepresentation.
- The insured can only disclose what he actually knows or ought to know in the ordinary course of his business.
- A term may be a warranty even though it is not described as such.
- Making a fraudulent claim is not met by the same remedy for breach of the duty of good faith
- There is increasing recognition of the insurers' post-contractual duty of good faith.
- There is no doctrine of "repudiation of a claim" so that if the condition is not a condition precedent any breach of it will almost certainly not give the insurers any defence to the claim - In rare examples the court may award damages in the form of deduction from the insured claim reflecting the insurer's prejudice because of the breach.
- The Financial Services and Markets Act 2000 has replaced all earlier insurance companies legislation and introduced regulation of the manner in which insurers deal with private insureds in particular.
- Consumer problems are now in practice resolved by the Financial Ombudsman Service rather than the courts.
- The Contracts (Rights of Third Parties) Act 1999 has replaced the privity rule with the principle that a third party can take the benefit of a policy on the same terms as the insured in certain cases.
Consumer Rights Act 2015
Contracts (Rights of Third Parties) Act 1999
Deregulation Act 2015
European Communities (Rights against Insurers) Regulations 2002 (SI 2002 no 3061)
Financial Services and Markets Act 2000
Gambling Act 2005
Gaming Act 1845
Insurance Act 2015
Life Assurance Act 1774
Motor Vehicles (Compulsory Insurance) (Information Centre and Compensation Body) Regulations 2003 (SI 2003 no 37)
Motor Vehicles (Compulsory Insurance) Regulations 2007 (SI 2007 no 1426)
Road Traffic Act 1988
Third Parties (Rights against Insurers) Act 2010
Agapitos v Agnew (The Aegeon) (No 1)  Lloyd's Rep IR 573
Akers v Motor Insurers' Bureau  Lloyd's Rep IR 427
Alfred McAlpine Plc v BAI (Run-Off) Ltd  Lloyd's Rep IR 352
Andrews v SBJ Benefit Consultants  HC 09 C 02160
Arab Bank Plc v Zurich Insurance Co.  1 Lloyd's Rep 262
Aspen Insurance UK Ltd and Others v Pectel EWHC 2804 (Comm)
AS Screenprinting Ltd v British Reserve Insurance Co Ltd  Lloyd's Rep IR 430
Assicurazioni Generali SpA v Arab Insurance Group (BSC)  Lloyd's Rep IR 131
Aviva Insurance Ltd v Brown  EWHC 361 (QB)
Axa General Insurance Ltd v Gottlieb  EWCA Civ 112
Bankers Insurance Co Ltd v South  Lloyd's Rep IR 1
Bennett (t/a Soho Pizzeria) v Axa Insurance Plc  Lloyd's Rep IR 615
Black King Shipping Corp v Massie (The Litsion Pride)  1 Lloyd's Rep 437
Bolton Metropolitan Borough Council v Municipal Mutual Insurance Ltd  EWCA Civ 50
Bonner v Cox Dedicated Corporate Member Ltd  EWCA Civ 1512
BP Exploration Operating Co Ltd v Kvaerner Oilfield Products Ltd  EWHC 999
Brotherton v Aseguradora Colseguros SA (No 3)  Lloyd's Rep IR 762
Caledonia North Sea Ltd v British Telecommunications plc  Lloyd's Rep IR 261
Centre Reinsurance International Co v Freakley  Lloyd's Rep IR 303
Charlton v Fisher  Lloyd's Rep IR 387
Co-operative Retail Services Ltd v Taylor Young Partnership Ltd  Lloyd's Rep IR 555
Cornhill Insurance Plc v DE Stamp Felt Roofing Contractors Ltd  Lloyd's Rep IR 648
Diab v Regent Insurance Co Ltd  UKPC 29
Direct Line Insurance Plc v Khan  Lloyd's Rep IR 364
Dodson v Peter H Dodson Insurance Services  Lloyd's Rep IR 278
Drake Insurance Co v Provident Insurance plc  Lloyd's Rep IR 277
Dunthorne v Bentley  RTR 428
Durham v BAI (Run Off) Limited  EWCA Civ 1096
Eagle Star Insurance Co Ltd v Cresswell  Lloyd's Rep IR 537
Eagle Star Insurance Co Ltd v Games Video Co (GVC) SA (The Game Boy)  Lloyd's Rep IR 867
Economides v Commercial Union  Lloyd's Rep IR 9
Enterprise Oil Ltd v Strand Insurance Co Ltd  EWHC 58
ERC Frankona Reinsurance v American National Insurance Co  EWHC 138
Evans v Secretary of State for the Environment, Transport and the Regions (C63/01)  Lloyd's Rep IR 391
Feasy v Sun Life Assurance Co of Canada  Lloyd's Rep IR 637
FNCB Ltd (formerly First National Commercial Bank Plc) v Barnet Devanney (Harrow) Ltd (formerly Barnet Devanney & Co Ltd)  Lloyd's Rep IR 459
Friends Provident Life & Pensions Ltd v Sirius International Insurance Corporation  EWCA Civ 601
Galloway v Guardian Royal Exchange (UK) Ltd  Lloyd's Rep IR 209
Gan Insurance Co Ltd v Tai Ping Insurance Co Ltd (No 2)  Lloyd's Rep IR 667
Gan Insurance Co Ltd v Tai Ping Insurance Co Ltd (No 3)  Lloyd's Rep IR 612
GE Reinsurance Corp (formerly Kemper Reinsurance Co) v New Hampshire Insurance Co  Lloyd's Rep IR 404
Glencore International AG v Ryan (The Beursgracht) (No 1)  Lloyd's Rep IR 335
George Hunt Cranes Ltd v Scottish Boiler & General Insurance Co Ltd  Lloyd's Rep IR 178
Goshawk Dedicated Ltd v Tyser & Co Ltd  EWCA Civ 54
Graham v Entec Europe Ltd (t/a Exploration Associates)  Lloyd's Rep IR 660
Group Josi Re Co SA v Walbrook Insurance Co Ltd  1 Lloyd's Rep 345
Hawley v Luminar Leisure Plc  EWCA Civ 18
Hellenic Industrial Development Bank SA v Atkin (The Julia)  Lloyd's Rep IR 365
HIH Casualty & General Insurance Ltd v Axa Corporate Solutions (formerly Axa Reassurance SA)  Lloyd's Rep IR 1
HIH Casualty & General Insurance Ltd v Chase Manhattan Bank  Lloyd's Rep IR 230
HIH Casualty & General Insurance Ltd v New Hampshire Insurance Co  Lloyd's Rep IR 596
HLB Kidsons v Lloyd's Underwriters (Costs)  EWHC 2699 (Comm)
Horbury Building Systems Ltd v Hampden Insurance NV  EWCA Civ 418
International Lottery Management v Dumas  Lloyd's Rep IR 237
International Management Group v Simmonds  Lloyd's Rep IR 247
Jacobs v Coster (t/a Newington Commercials Service Station)  Lloyd's Rep IR 506
James v CGU Insurance plc  Lloyd's Rep IR 206
James Budgett Sugars Ltd v Norwich Union Insurance Ltd  Lloyd's Rep IR 110
Joseph Fielding Properties (Blackpool) Ltd v Aviva Insurance Limited  EWHC 2192
Jureidini v National British & Irish Millers Insurance Co Ltd  AC 499
K/S Merc-Scandia XXXXII v Lloyd's Underwriters (The Mercandian Continent)  Lloyd's Rep IR 802
Keeley v Pashen  Lloyd's Rep IR 289
King v Brandywine Reinsurance Co (UK) Ltd (formerly Cigna RE Co (UK) Ltd)  EWCA Civ 235
Kosmar Villa Holidays Plc v Trustees of Syndicate 1243  EWCA 147
Laker Vent Engineering Ltd v Templeton Insurance Company Ltd  EWCA Civ 62
Layher Ltd v Lowe  Lloyd's Rep IR 510
LEC (Liverpool) Ltd v Glover (t/a Rainhill Forge)  Lloyd's Rep IR 315
Limit No 2 Ltd v AXA Versicherung AG  EWCA Civ 1231
Lloyd-Wolper v Moore  Lloyd's Rep IR 730
Lumbermans Mutual Casualty Co v Bovis Lend Lease Ltd (Preliminary Issues)  Lloyd's Rep IR 74
McMinn v McMinn  EWHC 827
Manifest Shipping Co Ltd v Uni-Polaris Insurance Co Ltd (The Star Sea)  Lloyd's Rep IR 247
Midland Mainline Ltd v Eagle Star Insurance Co Ltd Sub  Lloyd's Rep IR 739
Moore Large & Co Ltd v Hermes Credit & Guarantee Plc  Lloyd's Rep IR 315
Nawaz v Crowe Insurance Group  Lloyd's Rep IR 471
Nield v Loveday  EWHC 2324 (Admin.)
Nicholas G Jones v Environcom Ltd  EWHC 759 (Comm)
Nigel Upchurch Associates v Aldridge Estates Investment Co  1 Lloyd's Rep 535
Normhurst Ltd v Dornoch Ltd  Lloyd's Rep IR 27
North Star Shipping Ltd v Sphere Drake Insurance plc  EWCA Civ 378
O'Kane v Jones (The Martin P)  Lloyd's Rep IR 174
OT Computers Ltd (In Administration)  Lloyd's Rep IR 669
Pan Atlantic v Pine Top  1 AC 501
PCW Syndicates v PCW Reinsurers  1 Lloyd's Rep 241
Phillips v Syndicate 992 Gunner  Lloyd's Rep IR 426
Pickett v Roberts Sub Nom. Pickett v Motor Insurers' Bureau  Lloyd's Rep IR 513
Pilkington UK Ltd v CGU Insurance Plc  Lloyd's Rep IR 891
Printpak v AGF Insurance Ltd  1 All ER (Comm) 466
Ramco (UK) Ltd v International Insurance Co of Hanover  Lloyd's Rep IR 606
Rendall v Combined Insurance Company of America  EWHC 678
Rexodan International Ltd v Commercial Union Assurance Co Plc  Lloyd's Rep IR 495
Ronson International v Patrick  Lloyd's Rep IR 94
Seele Austria GMBH & Co v Tokio Marine Europe Insurance Ltd  EWHC 1411 (Comm);  1 CLC 972;  BLR 337
Sempra Metals Ltd (formerly Metallgesellschaft Ltd) v Inland Revenue Commissioners  UKHL 34;  3 WLR 354;  4 All ER 657;  STC 1559;  BTC 509;  STI 1865; (2007) 104(31) LSG 25; (2007) 157 NLJ 1082; (2007) 151 SJLB 985, HL
Sharon's Bakery (Europe) Ltd v Axa Insurance UK plc  EWHC 210 (Comm)
Shinedean Ltd v Alldown Demolition  EWCA Civ 939
Slater v Buckinghamshire CC  EWCA Civ 1478
Sprung v Royal Insurance (UK) Ltd  1 Lloyd's Rep IR 111
Stemson v AMP General Insurance (NZ) Ltd  UKPC 30
Strive Shipping Corp v Hellenic Mutual War Risks Association (Bermuda) Ltd (The Grecia Express)  Lloyd's Rep IR 669
Sugar Hut Group & Ors v Great Lakes Reinsurance & Ors  EWHC 2636 (Comm.)
Super Chem Products Ltd v American Life & General Insurance Co Ltd  Lloyd's Rep IR 446
Synergy Health (UK) Ltd v CGU Insurance t/a Norwich Union and others  EWHC 2583 (Comm)
T&N Ltd (In Administration) v Royal & Sun Alliance Plc  Lloyd's Rep IR 106
Tarbuck v Avon Insurance Plc  Lloyd's Rep IR 393
Tektrol Ltd (formerly Atto Power Controls Ltd) v International Insurance Co of Hanover Ltd  EWCA Civ 845
White v White  Lloyd's Rep IR 493
WISE Underwriting Agency Ltd v Grupo Nacional Provincial SA  Lloyd's Rep IR 764
Woolwich Building Society v Taylor  1 BCLC 132
Yeganeh v Zurich plc  EWHC 1185
Other fact files
The Financial Ombudsman Service and general insurance
The regulatory framework
London market reform
Recent developments in life assurance law
Recent developments in reinsurance law
The regulation of general insurance and protection business
The regulation of retail investment business
The broker's liability for premiums - should section 53 be reformed? (Insurance contract law issues paper 8.) Law Commission, Scottish Law Commission. London: Law Commission, 2010.
Colinvaux and Merkin's Insurance contract law. Robert Merkin. London: Sweet & Maxwell.
Consumer insurance law: pre-contract disclosure and misrepresentation: report and draft Bill The Law Commission and the Scottish Law Commission. London: Law Commission, 2009.
Contract Certainty Code of Practice. London: Market Reform Programme Office, 2007.
Damages for late payment and the insurer's duty of good faith.(Insurance contract law issues paper 6.) Law Commission, Scottish Law Commission. London: Law Commission, 2010.
The Insured's post-contract duty of good faith. (Insurance contract law issues paper 7.) Law Commission, Scottish Law Commission. London: Law Commission, 2010.
Insurable interest. Law Commission, Scottish Law Commission. London: Law Commission, 2008. (Insurance contract law issues paper; 4)
Insurance contract law: a joint scoping paper. The Law Commission and the Scottish Law Commission. London: Law Commission, .
Insurance contract law: analysis of responses and decisions on scope. The Law Commission and the Scottish Law Commission. London: Law Commission, 2006.
Insurance contract law: misrepresentation, non-disclosure and breach of warranty by the insured. The Law Commission and the Scottish Law Commission. London: Law Commission, 2007.
Insurance Law Monthly. London: Informa.
Intermediaries and pre-contract information. Law Commission, Scottish Law Commission. London: Law Commission, 2007. (Insurance contract law issues pa per; 3)
The Market Reform Contract . London: Market Reform Programme Office, 2007.
Microbusinesses (Insurance contract law issues paper 5.) Law Commission, Scottish Law Commission. London: Law Commission, 2009.
Misrepresentation and non-disclosure. Law Commission, Scottish Law Commission. London: Law Commission, 2006. (Insurance contract law issues paper; 1)
The requirement for a formal marine policy - should section 22 be repealed? (Insurance contract law issues paper 9.) Law Commission, Scottish Law Commission. London: Law Commission, 2010.
Third parties - rights against insurers. Presented to the Parliament of the United Kingdom by the Lord High Chancellor by command of Her Majesty. London: Stationery Office, 2001. (Law Com; no 272)
Warranties (Insurance contract law: issues paper 2). Scottish Law Commission (2006)
This document is believed to be accurate but is not intended as a basis of knowledge upon which advice can be given. Neither the author (personal or corporate), the CII group, local institute or Society, or any of the officers or employees of those organisations accept any responsibility for any loss occasioned to any person acting or refraining from action as a result of the data or opinions included in this material. Opinions expressed are those of the author or authors and not necessarily those of the CII group, local institutes, or Societies.