Commercial Law

Front 1

Scottish Amicable Heritable Securities Association (Ltd) v Northern Assurance

Back 1

Defines insurance:‘a contract which the insurer undertakes in consideration of the payment of an estimated equivalent beforehand, to make up to the assured any loss he may sustain by the occurrence of an uncertain contingency’- Distinguishing insurance contract from cautionary obligation - Insurance contracts are DIRECT and not ACCESSORY obligations.

Front 2

Dept of Trade and Industry v St Christopher Motorists Association Ltd

Back 2

- UNCERTAINTY determined at time contract is concluded.- Held to be insurance, even though payment was in a form other than money

Front 3

Medical Defence Union Ltd v Dept of Trade

Back 3

Clarified this approach - Insurance was a contract for ‘the payment of money or money’s worth’- Following this approach, ‘BREAKDOWN’ COVER = form of insurance

Front 4

GJ Bells Principles of the Law of Scotland

Back 4

- There shall be a subject in which the insured has an interest; a premium give or engaged for; and a risk run

Front 5

s412 FSMA 2000

Back 5

Contingent Liability - financial Sector

Front 6

s335 Gambling Act 2005

Back 6

Contingent Liability -simple bets

Front 7

s143 Road Traffic Act 1988

Back 7

Compulsory insurance for vehicles to be insured in respect of death or bodily injury caused to any person or damage to property caused by the use of the vehicle on a road in GB

Front 8

s1(1) Employers’ Liability (Compulsory Insurance) Act 1969

Back 8

Employers requires to insure against the risk of bodily injury or disease sustained by employers in the course of their employment

Front 9

Marine Insurance Act 1906

Back 9

codified the law relating to marine insurance.- Tendency on part of courts to extent the general principles of marine insurance to other types of insurance.

Front 10

UCTA 1977

Back 10

Insurance contracts do NOT fall within scope of this Act

Front 11

Unfair Terms in Consumer Contract Regulations

Back 11

Insurance contracts CAN fall within definition of a consumer contract under the regulations.Many main items of insurance contracts are removed fro scope of Regulations BUT subsidiary terms (ie requirement of notice of loss or co-operation in the claims) may fall within the scope

Front 12

Life Assurance Act 1774

Back 12

provides insurable interest as a statutory requirementNo insurable interest = VOID contractIt is illegal to hold such a policy and you CANNOT enforce insurer to pay you.

Front 13

Dalby v India and London Life Assurance Co

Back 13

- You need your insurable interest ONLY at time you take out the policy/ conclusion of the contract, and not at time of death

Front 14

Griffiths v Fleming

Back 14

- A person has UNLIMITED insurable interest in his own life

Front 15

Turnbull & Co v Scottish Prov Institution

Back 15

Financial interest cana rise from a contractual relationship, e.g. agency, partnership and employment.Assured is limited to the financial interest

Front 16

Scottish Widows Fund v Buist

Back 16

Focuses on transfer of rights - contract sustained even when assigned to anotherBUT although rights had been assigned, there was NO personal interest in evidence at the time the contract was made:To have personal interest you must have: natural affection; financial loss and express statutory provision

Front 17

Arif v Excess Insurance Group Ltd

Back 17

General principle of insurable interest applies equally to heritable property.HEld that 1 partner in a hotel business could NOT claim under a fire policy in which eh was named insured because hotel was partnership property and policy made nor reference to insured acting other than as principle

Front 18

Fehilly v General accident Fire

Back 18

Scope of insurable interest in non-marine indemnity. Tenant did not have an insurable interest in full value of building as lease did not require tenant t repair fire damage. - Tenant could only recover market value of the lease.

Front 19

Bank of Scotland v Guardian Royal Exchange plc

Back 19

- A heritable creditor has an insurable interest in property which is separate from that of owner

Front 20

Feasey v Sun Life

Back 20

Court of Appeal examined insurable interest in detail and said that the subject matter is defined by th contract. It is not necessarily the poperty involved BUT the EVENT that is insured against.They Produced a ‘catalogue of insurable interests’:Subject matter - defined as item of property and the insurance is to recover the value. There must be a legal (property/contractual), or an equitable interest in the property.Life insurance with pecuniary interest in the life of a person (i.e. employers & employees)Subject matter appears to be a particular item of property but where ‘properly construed the policy extends beyond that item and embraces such insurable interest as the insured has’Extended eeven further - ‘not even strictly pecuniary interest’ (i) own life/natural affection (ii) Valuable benefit (iii) “Pervasive interest”

Front 21

Wilson v Jones

Back 21

Example of (3) above- Insurance claim was sought and court held that on the terms of the policy, his interest was in the property being pivotal ot the success of his company - this was sufficient interest in insuring against the damage to that property

Front 22

'Moonacre'

Back 22

Relates to (4)(ii) Valuable benefitRelationship of constant use & control was sufficient interest, despite not owning property.

Front 23

s17 Marine Insurance Act

Back 23

Insurance contract regarded as a contract of utmost good faith (uberrimae fidei)

Front 24

Life Association v Foster

Back 24

Stated the common law duty of good faith.Lord President Inglis - ‘but contract of insurance are in this, among other particulars, exceptional, in that they require on both sides ‘uberrima fides’.’

Front 25

Manifest Shipping Co Ltd v Uni-Polaris Insurance Co

Back 25

The obligation to act in good faith applies to the contract of insurance at all times: during negotiations, during the period of insurance and at the time of making the claim.Implications change at each stage though.

Front 26

Muirhead & Turnbull v Dickson

Back 26

Formation: Even if reality is that the insured is not familiar with the standard terms, an OBJECTIVE ANALYSIS of contract formation will result in there being consensus when insurer accepts the proposal.

Front 27

Roberts v Plaisted

Back 27

Agency and Insurance Contracts:- This case shows that a ‘Lloyds’ broker is always the agent of the insured. However, there is no simple rule for other types of broker

Front 28

s9 and Sch 2 Consumer Insurance (Disclosure and Representations) Act 2012

Back 28

Confirms status of agent in CONSUMER INSURANCE

Front 29

National Oilwell (UK) Ltd v Davy Offshore (UK) Ltd

Back 29

UNNAMED/UNDISCLOSED PRINCIPALSCourts tend to focus more on the INSURED RISK and to ask whether identity of insured matters for that purpose

Front 30

Carter v Boehm

Back 30

Essential elements for duty to disclose:> Superior knowledge of INSURED in relation to the risk> The RELIANCE of the underwriter on the info given by the insured.

Front 31

s18(1) 1906 Act

Back 31

Duty of disclosure requires the proposer to disclose every material circumstance which is known to him

Front 32

Joel v Law Union and Crown Insurance Co

Back 32

proposer cannot be expected to disclose information he does not know

Front 33

Highlands Insurance v Continental Insurance

Back 33

UNLESS it could be found out by reasonable inquiries - found that insurers should have taken more steps to find out fairly basic information

Front 34

Life Association v Foster

Back 34

Opinions held to the best of your knowledge and belief

Front 35

MacPhee v Royal Insurance Co Ltd

Back 35

There must, however, be a reasonable basis for the proposer’s knowledge and belief

Front 36

Consumer Insurance (Disclosure and Representations) Act 2012

Back 36

Separate folder

Front 37

Manifest Shipping Co Ltd v Uni-Polaris Insurance Co

Back 37

Duration of duty of disclosure - there is no ongoing duty - only persists until the contract is agreed between insurer and proposer (ie negotiation stage)

Front 38

Banque Keyser Ullmann SA v Skandia (UK) Insurance Co Ltd

Back 38

There is no obligation to disclose information during the period which the insurance is in force.

Front 39

Lambert v Co-Op Insurance Society

Back 39

If the contract is renewed, the duty of disclosure revives at each successive renewal since each renewal is treated like a new contract

Front 40

Hooper v Royal London General Insurance

Back 40

NON-LIFE INSURANCE MATERIALITY TEST- To be judged from perspective of prudent INSURER

Front 41

Pan Atlantic

Back 41

It need not be decisive

Front 42

Life Association v Foster

Back 42

LIFE INSURANCE MATERIALITY TEST- To be judged from perspective of reasonable INSURED

Front 43

Cuthbertson

Back 43

Reaffirmed Materiality test to be based on what the reasonable insured person would know/think to be material

Front 44

Pan Atlantic

Back 44

Causation - If dealing with NON-LIFE INSURANCE, the factor need not be decisive, but does need to make a difference to THIS specific insurer

Front 45

S33(1) 1906 Act

Back 45

Makes clear types of obligation which can be subject of a warranty:Promissory warranties Warranties relating to past/present facts

Front 46

Kennedy v Smith

Back 46

Abstinence from Alcohol was not worded clearly enough to be construed as a promissory warranty. Therefore, no breach.- Constructed with contra proferentem principle

Front 47

s33(3) 1906 Act

Back 47

Makes clear the consequences of breach of warranty. A breach will end the insurer’s obligations.

Front 48

Dawsons Ltd v Bonnin

Back 48

Illustrates the obligation of strict compliance with warranties.Also the fact that the breach need have nothing to do with the loss occurring

Front 49

Cuthbertson v Friends’ Provident Life Office

Back 49

Distinguishes Warranty from Misrepresentation/ Non-Disclosure:A breacgh of warranty = a breach of contractDuty of disclosure/not to misrepresent arises ex lege