Insurance Law Monthly

Aviva Insurance Ltd v Brown [2011] EWHC 362 (QB) is a case in which the assured was accused of using fraudulent means and devices to obtain payment for a genuine loss. The case is an important one in that there is a discussion by Eder J of the meaning of ‘fraud’ in this context, and there is a strong argument that the case shows that the law on fraudulent claims has become unfairly balanced in favour of insurers.

English insolvency law has long recognised the principle that a payment made to an unsecured creditor at a time when the debtor is insolvent is an unfair preference which is to be set aside as a fraud on other creditors. The insolvency laws of most jurisdictions, including those of Australia, are the same. The question in New Cap Reinsurance Corporation Ltd v Grant [2011] EWCA Civ 971 was whether a judgment of a New South Wales court, ordering a Lloyd’s Syndicate to repay reinsurance proceeds paid by an insolvent reinsurer, should be enforced in England in circumstances in which the Syndicate had refused to submit to the jurisdiction of the Australian court.

In Argo Systems FZE v Liberty Insurance (Pte) and Anr [2011] EWHC 301 (Comm) HHJ Mackie QC addressed difficult and in part unresolved questions involving waiver of remedies for breach of the duty of utmost good faith, and waiver of breach of warranty. The judgment is important also in that it shows that the wording of a reservation of rights may itself preclude reliance on known defences.