Insurance law reform: deterring fraud in the twenty‐first century
International Journal of Law and Management
ISSN: 1754-243X
Article publication date: 15 November 2011
Abstract
Purpose
The purpose of this paper is to provide a critical examination of the current law and the possible changes that are under consideration by the Law Commissions, after public consultation in relation to the continuing duty of good faith and post‐contractual duties owed by the insured towards the insurer.
Design/methodology/approach
The research is addressed using case law, statutes, current academic and Law Commissions publications in the UK.
Findings
First, the paper finds that the current state of the law allows for the insurer to claim damages from an insured when a fraudulent claim is made to recover the cost of any investigations. Second the insurer can refuse to meet a claim that is tainted by fraud. Third the insurer can have the right to avoid the policy obligations upon the discovery of a fraud, but subject to some limitations. Fourth there is a need for the insured to be protected against an insurer's unjustified allegations of fraud.
Research limitations/implications
This work does not address detailed issues in relation to pre‐contractual issues of good faith. These have been discussed in a previous edition of this journal see Swaby. G. (2010) “Insurance law: fit for purpose in the twenty‐first century?” IJLMA, 52 (1), pp. 21‐39. ISSN 1754‐243X.
Practical implications
The Law Commission will be undertaking further consultations before reforming this area of law.
Originality/value
This paper will be of interest to legal practitioners and academics and those in the insurance industry.
Keywords
Citation
Swaby, G. (2011), "Insurance law reform: deterring fraud in the twenty‐first century", International Journal of Law and Management, Vol. 53 No. 6, pp. 413-434. https://doi.org/10.1108/17542431111185187
Publisher
:Emerald Group Publishing Limited
Copyright © 2011, Emerald Group Publishing Limited