REFORMING INSURANCE LAW: - Law Commission

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