REFORMING INSURANCE LAW: - Law Commission
REFORMING INSURANCE LAW: - Law Commission
REFORMING INSURANCE LAW: - Law Commission
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1 INTRODUCTION<br />
<strong>REFORMING</strong> <strong>INSURANCE</strong> <strong>LAW</strong>:<br />
IS THERE A CASE FOR REVESE<br />
TRANSPORTATION?<br />
Robert Merkin<br />
1.1 In January 2006 the English and Scottish <strong>Law</strong> <strong>Commission</strong>s, prompted by an investigation<br />
conducted by the British Insurance <strong>Law</strong> Association in 2002 and by strong indications from<br />
Brussels that a European Union directive on the harmonisation of insurance law is under<br />
consideration, announced a review into insurance law. The process was initiated by a Scoping<br />
Paper, launched by a meeting at Lloyd’s, by which the <strong>Law</strong> <strong>Commission</strong>s sought views on the<br />
matters to be investigated. The responses received by the <strong>Law</strong> <strong>Commission</strong>s over the following<br />
months covered virtually all aspects of the law, and the <strong>Law</strong> <strong>Commission</strong>s announced in August<br />
2006 the adoption of a wide-ranging investigatory programme. Issues Papers have to date been<br />
published on utmost good faith and warranties, a further paper is to be published in the first half<br />
of 2007 on the role of intermediaries. The present paper is for the most part confined to these<br />
issues, although certain other aspects of the law, such as late payment of claims, are relevant to<br />
good faith in the wider sense and are considered in what follows. A series of working seminars<br />
have been held to discuss particular issues within the review. The present author suggested to the<br />
<strong>Law</strong> <strong>Commission</strong>s at an early stage that it would be worthwhile investigating the Australian<br />
experience of the reform of insurance law by the Insurance Contracts Act 1984 (Cth), and the<br />
present offering is the result of those investigations. 1 The key provisions of Australian<br />
1 A good deal of the research was conducted in Sydney to coincide with the Australian Insurance <strong>Law</strong> Association<br />
Annual Congress, and thanks are owed to a number of people and organisations in that jurisdiction. Michael Gill of<br />
DLA Phllips Fox and Peter Mann of Clayton Utz were kind enough to organise and host open forums at their<br />
respective offices, and at those events the author was able to pose questions to leading lawyers, underwriters,<br />
brokers and academics. Nancy Milne, who conducted the recent reviews of the Australian legislation, willingly<br />
answered my detailed questions. Frank Hoffmann, a consultant to the Australian <strong>Law</strong> Reform <strong>Commission</strong>,<br />
generously gave the author a mass of background papers as well as an original copy of the ALRC’s 1984 Report.<br />
The chairman of the ALRC, Justice Michael Kirby, provided the author with valuable insights into the thinking<br />
behind the Report. Of the numerous people who gave up their time, special mention may be made of Oscar Shub<br />
and Fred Hawke. Many of the opinions expressed in this paper are based upon information obtained from the Open<br />
Forums and from interviews conducted in Sydney. Kate Lewins’ article Reforming Non-Disclosure in Insurance<br />
Contracts, forthcoming in the Journal of Business <strong>Law</strong>, is a valuable source of information: Kate was also kind<br />
enough to read the paper in draft and made a series of valuable comments. Samantha Traves of the Faculty of <strong>Law</strong>,<br />
QUT and of Barry & Nilsson both attended the DLA Phillips Fox seminar in Sydney and read the paper in draft,<br />
also making many valuable points. Alison Hay of Berwin Leighton Paisner was yet another of the people generous<br />
enough to read the paper and provide thoughts on it.Thanks are also owed to my Southampton colleague Johanna<br />
Hjalmarsson, who made sure that I had not missed any relevant authorities.<br />
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