We welcome article submissions from experts in the areas of coal, mining,
shipping, etc.
To Submit your article please click here.
|
|
|
Friday, 23 September 16
"COLLATERAL LIES" DO NOT NECESSARILY UNDERMINE AN INSURANCE CLAIM
 KNOWLEDGE TO ELEVATE
An insured was not precluded from recovering under an insurance policy even though it had made a false statement during the claims process with a view to strengthening its claim. The Supreme Court in Versloot Dredging BV & anr v HDI Gerling Industrie Versicherung AG [2016] UKSC 45 considered the extent of the fraudulent claims rule which applies to insurance contracts and prevents an insured recovering under an insurance policy where the claim is fabricated or exaggerated. The Supreme Court held (Lord Mance dissenting) that this rule does not apply to false statements that are immaterial to an insured’s right to recovery under the policy. Insurers have expressed their concern at the decision.
The claimant ship owners suffered irreparable damage of a vessel’s engine after the engine room was flooded, causing a loss of EUR 3,241 million, which they sought to recover from the defendant insurers. The ship owners had falsely stated, in response to inquiries made by the insurers, that an alarm had sounded but that no action had been taken by the crew as the alarm was attributed to the ship rolling in heavy seas. In actual fact no alarm had sounded. The ship owners had been frustrated by the insurers’ delay in recognising the claim and this statement was intended to reassure the insurers that the ship was seaworthy with fully operational alarm systems. They believed that this statement would fortify the claim and accelerate payment.
The alarm statement was later discovered to be false, but was irrelevant to the validity of the claim. Although the alarm had not sounded, it was tested shortly after the incident and found to be working. Even if it had not been working, Popplewell J at first instance held that this would not assist the insurers as the alarm’s failure to sound would not have been the proximate cause of the loss. Popplewell J concluded that the loss was caused by a peril of the seas covered by the insurance policy. Nevertheless, Popplewell J held that the insurers were entitled to repudiate the entire claim under the ship owners’ insurance policy as a result of this false statement. The ship owners appealed, with the Court of Appeal upholding the decision.
Fraudulent and exaggerated claims
At common law it is well established that if an insured makes a fraudulent or exaggerated claim on its insurer, the insured loses the right to recover the entirety of that claim, including any genuine losses it would have obtained. The law refuses to sever the honest part of the claim from the invented part.1 This is commonly referred to as the “fraudulent claims rule”.
Section 12 of the Insurance Act 2015 (which came into force on 12 August 2016) has preserved this rule. It does not, however, define what constitutes a fraudulent claim and does not refer to a situation where a valid claim is supported by a false statement.
Collateral lies and fraudulent devices
The extension of the common law rule to justified claims supported by false statements is more recent and controversial. Lord Sumption referred to Agapitos v Agnew (The Aegeon) [2003] QB 556, where Lord Mance had considered, obiter, whether the fraudulent claims rule could apply to a lie made in the presentation of a claim which does not affect the merits of, or the amount of, the claim. This has been generally termed a “fraudulent device” (or, adopting Lord Sumption’s expression, a “collateral lie”). Lord Mance considered that such collateral lies were also subject to the fraudulent claims rule.
The majority of the Supreme Court, with Lord Sumption giving the lead judgment, disagreed with this approach. Lord Sumption distinguished between a fraudulent exaggerated claim, which is designed to enable the insured to gain something which it is not entitled to, and a justified claim supported by a collateral lie. Where the lie is irrelevant to the existence or the amount the insured is entitled to, the insured gains nothing from the lie which he was not already entitled to by law and the insurer loses nothing from meeting a liability it already had (having crystallised at the moment of loss). The lie is therefore dishonest but the claim is not.
Lord Sumption concluded that it was disproportionately harsh to the insured and would go further than any legitimate commercial interest for the fraudulent claim rule to extend to collateral lies. The policy of deterrence did not justify such an extension of the rule.
COMMENT
The historic justification for the fraudulent claim rule was as a clear deterrent to fraudulent claims, recognising that insurers can be dependant on the insured for information, both at the formation of the contract and in the processing of claims. Honest policyholders would otherwise bear the financial burden of costs incurred by the insurers due to fraudulent or exaggerated claims, through increased premiums. As the judges recognised, fraudulent insurance claims are a serious issue, with insurance fraud widely perceived as victimless (a perception the judges emphasised was quite false).
However, this judgment prevents any extension of this rule and limits an insurer’s right to reject a claim. Although the decision has raised concerns within the insurance industry, it is far from being an invitation for an insured to embellish an insurance claim without fear of any consequences. Any attempt to enhance a claim which would result in increasing the amount recoverable will lead to forfeiture of the entirety of the claim if discovered. Even where a false statement is wholly collateral to a justified claim, an insured may be penalised for that statement if exposed. In the context of a contested claim, any settlement agreement induced by the false statement could be set aside. Moreover, there could be cost orders in any proceedings, increased premiums and difficulty in obtaining future insurance policies after the requirement to disclose the insured’s claims history in any insurance proposal is met. Insureds will also want to avoid litigation concerning whether a false statement is collateral or not to a justified claim.
Finally, insurers can consider including clauses in insurance contracts precluding the recovery of any claims supported by collateral lies. It is likely that going forward insurers will seek legal advice as to the merits of doing so.
Source: Allen & Overy
If you believe an article violates your rights or the rights of others, please contact us.
|
|
Thursday, 18 August 16
CAPESIZE: AN EXTREMELY VOLATILE LAST WEEK, WHERE THE MAIN DRIVER HAS BEEN THE WEST AUSTRALIA MARKET
Supramax
The week has held up. After the most of the world is back at work there is some optimism again in the market. The Far East volume has in ...
Tuesday, 16 August 16
WEEKLY CS42 COAL INDEX SOARS 14.08% YEAR TO DATE AMID HIGH DEMAND
COALspot.com: Average 5000 GAR coal index of Indonesian origin rose 2.37% week over week to averaging $42.84 per ton this past week, shows CS (i) C ...
Monday, 15 August 16
DRY BULK: 2017 COULD MARK THE START OF LOWER SHIP DELIVERIES HELPING TONNAGE SUPPLY ISSUES IN THE MARKET, SAYS SHIPOWNER - HELLENIC SHIPPING NEWS
Dry bulk owner Pacific Basin, mainly active in the Handysize and Supramax trades appeared optimistic in its analysis of the prospects of the dry bu ...
Monday, 15 August 16
INDONESIAN COAL PRICES RALLYING; COAL OUTPUT REMAINS FLAT
COALspot.com: Global thermal coal prices, including Indonesian coal prices have risen sharply due to jump in imports from China as it curbs domesti ...
Monday, 15 August 16
THE SPOT FREIGHT MARKET STRENGTHEN OVER THIS WEEK
COALspot.com: The Baltic Exchange, tracking rates for ships carrying dry bulk commodities rose as Cape and Panamax segments ending in a positive no ...
|
|
|
Showing 2316 to 2320 news of total 6871 |
|
 |
|
|
|
|
| |
|
 |
|
|
| |
|
- LBH Netherlands Bv - Netherlands
- Tata Chemicals Ltd - India
- Oldendorff Carriers - Singapore
- Commonwealth Bank - Australia
- Globalindo Alam Lestari - Indonesia
- Altura Mining Limited, Indonesia
- San Jose City I Power Corp, Philippines
- Bangladesh Power Developement Board
- Medco Energi Mining Internasional
- Electricity Generating Authority of Thailand
- Leighton Contractors Pty Ltd - Australia
- Xindia Steels Limited - India
- International Coal Ventures Pvt Ltd - India
- Riau Bara Harum - Indonesia
- Sakthi Sugars Limited - India
- PNOC Exploration Corporation - Philippines
- Africa Commodities Group - South Africa
- Miang Besar Coal Terminal - Indonesia
- Kepco SPC Power Corporation, Philippines
- VISA Power Limited - India
- Dalmia Cement Bharat India
- ICICI Bank Limited - India
- GAC Shipping (India) Pvt Ltd
- Sinarmas Energy and Mining - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Latin American Coal - Colombia
- Goldman Sachs - Singapore
- Indo Tambangraya Megah - Indonesia
- Global Business Power Corporation, Philippines
- Sarangani Energy Corporation, Philippines
- Iligan Light & Power Inc, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Krishnapatnam Port Company Ltd. - India
- The State Trading Corporation of India Ltd
- Indonesian Coal Mining Association
- Bhoruka Overseas - Indonesia
- Borneo Indobara - Indonesia
- Bhushan Steel Limited - India
- Siam City Cement - Thailand
- Coal and Oil Company - UAE
- Sical Logistics Limited - India
- TeaM Sual Corporation - Philippines
- Wood Mackenzie - Singapore
- Kalimantan Lumbung Energi - Indonesia
- Semirara Mining and Power Corporation, Philippines
- ASAPP Information Group - India
- Merrill Lynch Commodities Europe
- Directorate Of Revenue Intelligence - India
- Thiess Contractors Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- CNBM International Corporation - China
- Edison Trading Spa - Italy
- Mercator Lines Limited - India
- Siam City Cement PLC, Thailand
- Interocean Group of Companies - India
- Ind-Barath Power Infra Limited - India
- Global Coal Blending Company Limited - Australia
- Sree Jayajothi Cements Limited - India
- New Zealand Coal & Carbon
- Intertek Mineral Services - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Singapore Mercantile Exchange
- Metalloyd Limited - United Kingdom
- South Luzon Thermal Energy Corporation
- Vizag Seaport Private Limited - India
- Parry Sugars Refinery, India
- Aditya Birla Group - India
- London Commodity Brokers - England
- Essar Steel Hazira Ltd - India
- Indian Energy Exchange, India
- Orica Australia Pty. Ltd.
- McConnell Dowell - Australia
- Therma Luzon, Inc, Philippines
- Madhucon Powers Ltd - India
- Manunggal Multi Energi - Indonesia
- Price Waterhouse Coopers - Russia
- Indogreen Group - Indonesia
- Meralco Power Generation, Philippines
- Maheswari Brothers Coal Limited - India
- Heidelberg Cement - Germany
- Global Green Power PLC Corporation, Philippines
- Billiton Holdings Pty Ltd - Australia
- Central Java Power - Indonesia
- Jindal Steel & Power Ltd - India
- Rio Tinto Coal - Australia
- Maharashtra Electricity Regulatory Commission - India
- Kohat Cement Company Ltd. - Pakistan
- SMG Consultants - Indonesia
- Simpson Spence & Young - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Ceylon Electricity Board - Sri Lanka
- Grasim Industreis Ltd - India
- Bukit Makmur.PT - Indonesia
- IHS Mccloskey Coal Group - USA
- Videocon Industries ltd - India
- Eastern Coal Council - USA
- Samtan Co., Ltd - South Korea
- PowerSource Philippines DevCo
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- CIMB Investment Bank - Malaysia
- GMR Energy Limited - India
- Trasteel International SA, Italy
- GVK Power & Infra Limited - India
- Chamber of Mines of South Africa
- Bahari Cakrawala Sebuku - Indonesia
- Karaikal Port Pvt Ltd - India
- Bayan Resources Tbk. - Indonesia
- Ambuja Cements Ltd - India
- White Energy Company Limited
- PTC India Limited - India
- Marubeni Corporation - India
- Australian Commodity Traders Exchange
- Asmin Koalindo Tuhup - Indonesia
- Coalindo Energy - Indonesia
- European Bulk Services B.V. - Netherlands
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Carbofer General Trading SA - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Neyveli Lignite Corporation Ltd, - India
- AsiaOL BioFuels Corp., Philippines
- Agrawal Coal Company - India
- Energy Development Corp, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Tamil Nadu electricity Board
- Planning Commission, India
- Barasentosa Lestari - Indonesia
- Timah Investasi Mineral - Indoneisa
- Ministry of Mines - Canada
- Gujarat Mineral Development Corp Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Cigading International Bulk Terminal - Indonesia
- Salva Resources Pvt Ltd - India
- Kumho Petrochemical, South Korea
- MS Steel International - UAE
- Energy Link Ltd, New Zealand
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Parliament of New Zealand
- Indika Energy - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Standard Chartered Bank - UAE
- Orica Mining Services - Indonesia
- Kartika Selabumi Mining - Indonesia
- Larsen & Toubro Limited - India
- Formosa Plastics Group - Taiwan
- Renaissance Capital - South Africa
- Pendopo Energi Batubara - Indonesia
- SMC Global Power, Philippines
- Eastern Energy - Thailand
- Posco Energy - South Korea
- Holcim Trading Pte Ltd - Singapore
- Port Waratah Coal Services - Australia
- The University of Queensland
- Wilmar Investment Holdings
- Bukit Baiduri Energy - Indonesia
- Power Finance Corporation Ltd., India
- Bulk Trading Sa - Switzerland
- Minerals Council of Australia
- Malabar Cements Ltd - India
- Bharathi Cement Corporation - India
- Rashtriya Ispat Nigam Limited - India
- Australian Coal Association
- Sojitz Corporation - Japan
- Lanco Infratech Ltd - India
- Economic Council, Georgia
- Ministry of Transport, Egypt
- IEA Clean Coal Centre - UK
- Binh Thuan Hamico - Vietnam
- Banpu Public Company Limited - Thailand
- Baramulti Group, Indonesia
- Gujarat Sidhee Cement - India
- Aboitiz Power Corporation - Philippines
- Karbindo Abesyapradhi - Indoneisa
- The Treasury - Australian Government
- Indian Oil Corporation Limited
- Kapuas Tunggal Persada - Indonesia
- Kideco Jaya Agung - Indonesia
- Semirara Mining Corp, Philippines
- Straits Asia Resources Limited - Singapore
- Thai Mozambique Logistica
- Electricity Authority, New Zealand
- Petron Corporation, Philippines
- Romanian Commodities Exchange
- Bank of Tokyo Mitsubishi UFJ Ltd
- Uttam Galva Steels Limited - India
- Georgia Ports Authority, United States
- Deloitte Consulting - India
- Kobexindo Tractors - Indoneisa
- OPG Power Generation Pvt Ltd - India
- Chettinad Cement Corporation Ltd - India
- Kaltim Prima Coal - Indonesia
- Anglo American - United Kingdom
- Ministry of Finance - Indonesia
- Bhatia International Limited - India
- SN Aboitiz Power Inc, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Meenaskhi Energy Private Limited - India
- Savvy Resources Ltd - HongKong
- Coastal Gujarat Power Limited - India
- Cement Manufacturers Association - India
- Antam Resourcindo - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- India Bulls Power Limited - India
- Makarim & Taira - Indonesia
- Star Paper Mills Limited - India
- Mjunction Services Limited - India
- Sindya Power Generating Company Private Ltd
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Mercuria Energy - Indonesia
- Toyota Tsusho Corporation, Japan
- Central Electricity Authority - India
- Attock Cement Pakistan Limited
- Mintek Dendrill Indonesia
- Jaiprakash Power Ventures ltd
- Petrochimia International Co. Ltd.- Taiwan
- Independent Power Producers Association of India
- Vedanta Resources Plc - India
|
| |
| |
|
