Whitlam v. Hazel
In this case, the insured's broker made some slight alterations to the description of the insured's occupation in the proposal form. As a result, there was no mention of the fact that, in addition to his full-time job, the insured was training to be a golf professional. The Court of Appeal upheld the High Court's decision that insurers were entitled to avoid the policy for non-disclosure
DMC Category Rating: Confirmed
This case note is based on an Article in the December 2004 Edition of the ‘Bulletin’, published by the Marine and Insurance teams at the international firm of lawyers,DLA Piper Rudnick Gray Cary, which is an International Contributor to this website
On 28 January 2000, he was driving home from a residential course when he was involved in an accident as he pulled out from a lay-by. Two other motorists collided and one of them was killed. The insured was prosecuted for careless driving but was acquitted.
The insurer sought to avoid the motor policy for material non-disclosure. It said the insured had not disclosed that he was a trainee golf professional.
The problem lay in the answers given to certain questions in the proposal form. The insured completed a hand-written form on 16 April 1999 and gave it to his broker. The broker prepared a printed version, got the insured to sign it and then submitted it to the insurer on 20 April. This printed version formed the basis of the insurance contract.
The broker had, however, made a number of alterations to the information given by the insured. In particular, the form asked questions about the insured's employment. This was stated as "employed". In the box entitled "Occupation and nature of business - both full and part-time", the broker had inserted "shop assistant retailing". In the next box, headed "Employer and business address" he printed "Worthing Road Horsham".
In his handwritten version of the proposal form, the insured had described his occupation as "shop assistant retail", but in the second box, he had written "Neil Burke - Horsham Golf + Fitness Worthing Road". As a result of the broker's alteration, however, the proposal form made no mention of the insured's connection with golf.
The insurer took a very restrictive approach to the categories of occupation and business for which it would provide motor cover. It would only cover insureds in occupations that were considered low risk. This enabled it to provide a competitive premium.
When assessing proposals for insurance, the insurer used software produced by the Association of British Insurers that sets out standard codes for categories of business, occupation and employment. The insurer had specified which of these was acceptable and which not. If an occupation, whether full or part-time, or an employer's business, was unacceptable, no quotation would be supplied. Amongst those on the blacklist were sportsman, professional sports person, sports coach, golfer and golf club professional.
As a result, had the proposal form said "trainee golf professional" it would have been rejected. In fact, had the word "golf" appeared anywhere on the printed form it would have been rejected.
At first instance, the judge found that the insurer had been entitled to avoid the policy on the grounds of material non-disclosure. There was no question of any deceit on the part of the insured and any non-disclosure was entirely innocent. But his true occupation was, nevertheless, as a trainee professional golfer and, had this been disclosed on the proposal form, the insurer would not have agreed to provide cover.
In this case, the insured had given an incomplete and misleading answer to the questions in the form, although he did not do so deliberately. Accordingly, the court held that the insurer was entitled to avoid the policy.
These Case Notes have been prepared with care, but neither the Editor nor the International and other Contributors can guarantee that they are free from error, nor that they contain every pertinent point. Reliance should not therefore be placed upon them without independent verification. The Editor and the International and other Contributors disclaim all liability for any loss of whatsoever nature and howsoever arising as a result of others acting or refraining from acting in reliance on the contents of this website and the information to which it gives access. The Editor claims copyright in the content of the website.