Lloyd's Maritime and Commercial Law Quarterly
International Hull Clauses 2002: a contractual solution to the uncertainty of the fraudulent claims rule?
Lynne Skajaa *
Recent developments in the law relating to the application of the doctrine of utmost good faith in a post-formation context have rendered it impossible to state with any certitude that the duty on an assured not to act fraudulently when making a claim under a policy of insurance is a duty of the utmost good faith. While a contractual provision may present an opportunity to circumvent the inherent unpredictability of leaving the issue of fraudulent claims to be determined by common law, it may in fact replace one source of uncertainty with another. This article examines the new claims provision in the recently published International Hull Clauses 2002 and considers how it may fall to be construed in the light of contemporary decisions, in particular
Agapitos v.
Agnew (The Aegeon).
A. Introduction
As will be apparent to readers following academic and judicial discussion of the nature and extent of the doctrine of utmost good faith in a post-contractual context, the law on fraudulent claims is far from settled. While authority for the proposition that the doctrine of utmost good faith has a post-formation application is provided by the oft-discussed trilogy of cases in which this area of the law has been recently advanced, these judgments stop short of confirming whether the doctrine of utmost good faith applies in the context of the fraudulent claims rule.1
Indeed, there is now judicial support for the view that the common law rules governing the making of a fraudulent claim should be treated as falling outside the scope of the doctrine of utmost good faith.2
While the correct analysis of the juristic nature of the fraudulent claims rule may not be of any obvious concern to the insurance market, there is real commercial interest in the consequence of fraud at the claims stage on the contractual obligation of the insurer to hold the assured harmless in
* Solicitor; Consultant to Wiersholm, Mellbye & Bech, Oslo. Sincere thanks go to Yvonne Baatz for her extremely helpful comments on an earlier draft of this article and to an anonymous referee for his observations.
1. Manifest Shipping Co. Ltd
v. Uni-Polaris Insurance Co. Ltd and la Reunion Européene (The Star Sea)
[1997] 1 Lloyd’s Rep. 360 (C.A.); [2001] U.K.H.L. 1; [2001] 2 W.L.R. 170; [2001] 1 Lloyd’s Rep. 389 (H.L.); K/s Merc-Scandia XXXXII
v. Certain Lloyd’s Underwriters and Ocean Marine Insurance Co. Ltd and Others (The Mercandian Continent)
[2001] EWCA Civ 1275; [2001] 2 Lloyd’s Rep. 563; Agapitos
v. Agnew & Others (The Aegeon)
[2002] EWCA Civ 247; [2002] 3 W.L.R. 616; [2002] 2 Lloyd’s Rep. 42.
2. The Aegeon
[2002] 3 W.L.R. 616; [2002] 2 Lloyd’s Rep. 42.
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