Chapter 7 Utmost Good Faith

Banque Financier de la Cite SA v Westgate Insurance Co Ltd

Insurer was aware that broker had issued fraudulently cover notes. It confirmed that only remedy for insured in such case is avoid contract and recover premium. There is no right to claim damage in addition

Horne v Poland

Nationality held moral hazard

Pacific Queen Fisheries v Symes

Structural change in vessel to carry more oil not disclosed to insurer though surveyed but not detected changes. Held: Not entitled for claim due to non-discloser

1- Woolcott v Sun Alliance & London Insurance 2- Woolcott v Excess Insurance Co Ltd

1- A 12 year old conviction for armed robbery held material 2- Agent know the criminal record of proposer

Brotherton v Aseguradora

Allegation of dishonesty by directors in the field of professional Indemnity Held- it was irrelevant whether director had subsequently been exonerated. The only issue was whether allegation that existed when the risk was placed were material

Galloway v GRE

Burglary claim of p 16,000 was genuine up to p 14,000, but fraud for balance p 2,000 Held insurer were entitled to repudiate the claim as a whole

Lambert v Co-operative Insurance Society

Conviction of robbery on proposer's husband. All risk cover on jewelry

Container Transport International v Oceanus Mutual Underwriting Association Ltd

Court of appeal held that " Influence judgment simply mean that fact must be one which typical reasonable underwriter would have wanted to know about when forming his opinion of the risk

CARTER V. BOEHM (1766)

Facts which insurer ought to know like notorious things, Fort insured in Sumatra where French Attack was expected (and it was) Positive duty of disclosure in insurance

Superchem Product Ltd v Americal Life and General Insurance Co

Fire claim where defense of insurer was fire caused by deliberate act and claim was made outside the time limit in the policy Insurer might not be entitled to reply on any one defense Held: Claim was out of time no claim paid

Limit No.2 v AXA versicherung AG

Held Reinsured intention regarding the level of detectable it write to planned to write a misrepresentation of fact allowing avoidance of treaty, but not of the renewal treaty some 19 month later

Glasgow Insurance Corp Ltd v Symondsen

In marine insurance there is no duty to disclose that a risk has previously refused by other underwriter

KETTLEWELL V. REFUGE ASSURANCE (1908)

Insured was thinking of letting her life insurance policy lapse, however the agent of the insurance co. persuaded her to keep the contract in force by telling her, untruthfully, that she would have a 'free' policy, with nothing more to pay, if she continued to pay premiums for a further 4 years. Held that insured had the right to avoid the policy and recover premiums paid since the misrepresentation

Bates v Hewitt-

Notorious Confederate Cruiser Georgia, a war ship rebuilt for excursion seized by American warship on his 1st voyage - Held material not disclosed to insurer not succeeds in claim

Drake Insurance plc v Provident Insurance

Obiter Failure by insurer to make proper investigation before taking "drastic Step" of avoiding a policy was a breach of insurer's duty of good faith and that this disentitled the insurer from avoiding for non-disclosure

St Paul Fire v McConnel Dowell Construction

Once the court has decided that a fact is material i.e. a typical reasonable underwriter would have wanted to know about it. It will be presumed to have induced the actual underwriter to enter into the contract unless the insured can produce strong evidence to the contrary

Joel v Law Union

Proposer under no duty to disclose fact she has suffered from acute depression, because she had never been aware of fact  Conviction that are spent. Rehabilitation Of Offender Act need not be disclosed one offence became spent

ROZANES V. BOWEN (1928)-

The principle of utmost good faith was laid down here. It was said that since it is to be presumed that the underwriter knows nothing and the assured knows all, the latter must disclose the same. Thus, an insurance contract is a contract uberrima fides

Pan Atlantic Insurance Co v Pin Top Insurance Co

This test is known as "Actual Inducement Test" The decision of CTI affirmed by House of Lords in this case. Here second question considered in the case and introduce a second element. "Judgment" was construed as meaning "the formation of an opinion", not the final decision. Typical underwriter want to know about material, but it would have no difference to decision in order to avoid contract , it was not enough to show that the material was not disclose. It was also show that underwriter in question was induce by the nondisclosure into entering the contract on the relevant terms

Consumer Insurance (Disclosure & Representation) Act 2012

• The duty of consumer- The Act replaces the duty to volunteer material information to the insurer with a duty on consumers to • Reasonable Care- If a consumer fails to take reasonable care not to make a misrepresentation and the misrepresentation induces the insurer to enter the contract, the insurer will have a remedy • Warranties and representations Clause 6 abolishes "basis of contract" clauses in consumer insurance contracts (although they can still be used in non-consumer insurance contracts).

Shaw v Robberds

A temporary use of kiln for drying in place of ordinary dryer Held not have infringed an increase in risk clause