Insurers resisted a claim saying that fraudulent acts of the defendants to promote an otherwise valid claim, made the entire claim void. The insurance required certificates to be obtained before ‘hot’ works were undertaken as part of the ship’s maintenance. The established principle being that any attempt to boost a claim fraudulently would invalidate the entire policy and claim. Did this apply to the use of fraudulent devices rather than the claims themselves?
Held: The use of a fraudulent device to support an otherwise valid claim should be treated as a fraudulent claim. Once the parties are engaged in hostile litigation, the duty of good faith is replaced by the requirement to act in accordance with the rules of court. There is no effective distinction between the duration of impact of the fraudulent claim rule and any extension to the use of fraudulent devices to promote a claim, and the s.17 duty.
Mance LJ observed that there is a dearth of convincing authority either for or against the inclusion of fraudulent devices within the fraudulent claims rule.
Judges:
Lord Justice Brooke, Lord Justice Mance, And Mr Justice Park
Citations:
Gazette 18-Apr-2002, [2002] EWCA Civ 247, [2003] QB 556, [2002] 1 All ER (Comm) 714, [2002] 3 WLR 616
Links:
Statutes:
Jurisdiction:
England and Wales
Citing:
Cited – Manifest Shipping Co Ltd v Uni-Polaris Shipping Co Ltd and Others HL 23-Jan-2001
The claimant took out insurance on its fleet of ships (the Star Sea). It had been laid up in its off season. The ship’s safety certificates were renewed before it sailed. It was damaged by fire. The insurers asserted that the ship had been . .
At ComC – Agapitos and Another v Agnew and others ComC 24-Jul-2002
The common law principle governing fraudulent claims has a separate origin and existence to any principle that exists under or by analogy with s.17 of the Act. . .
Cited by:
Cited – Fairclough Homes Ltd v Summers SC 27-Jun-2012
The respondent had made a personal injury claim, but had then been discovered to have wildly and dishonestly exaggerated the damages claim. The defendant argued that the court should hand down some condign form of punishment, and appealed against . .
Cited – Versloot Dredging Bv and Another v Hdi Gerling Industrie Versicherung Ag and Others SC 20-Jul-2016
The ‘DC MERWESTONE’ suffered a water ingress of water flooding the engine room. This resulted from (i) the negligence of the crew in failing to close the sea inlet valve of the emergency fire pump and drain down the system, after they had used the . .
Lists of cited by and citing cases may be incomplete.
Insurance
Updated: 22 May 2022; Ref: scu.167732
