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