In a recent case referred to as Allen v QBE Syndicate 1886 at Lloyds [2010] QDC 4 (2 February 2010) the Insurer, QBE, succeeded in defeating a claim made by an insured where the insurer rejected the claim on the basis of a failure to disclose a true traffic history. From that case the following matters assisted the insurer in succeeding against the insured:
1. The claims officer who spoke to the insured was diligent and cautious in her approach to the insured and impressed the judge that she would not have encouraged a casual approach to the issue of disclosure, that she was a credible witness and was cautious of the responses made by the insured.
2.A system of notification as to the consequences of non-disclosure or untrue statements and preferably an acknowledgment that that notification has occurred.3.There was a clear system of training of staff to ensure the officer had a clear understanding of what to say to customers to ensure the duty of disclosure was not diminished.4. Clear guidelines as to when and under what circumstances insurance would be refused.
Section 28 was relied upon and as there was a failure to comply with the duty of disclosure the liability was reduced to the amount that would place the insurer in a position to which the insurer would have been had the failure not occurred. In that regard the insurer advised that they would not have entered into a contract of insurance with the insured and on that basis the claim was dismissed. The insurer also referred to the underwriting policy guidelines which referred to an unacceptable risk and to four to eight infringements as being an unacceptable risk. The Court held that the duty of disclosure is limited to the facts that are known to the insured (see Midaz v Peters McCarthy Insurance Brokers Pty Ltd [1999] 1 Qd R 279). The circumstances as to infringements was something that was within the knowledge of the insured.
Should you have any queries in respect of this case or any issues arising from it, please do not hesitate to contact Joseph O’Hare of this office.