Brokers

Disclosure of documents

The law has for centuries recognised that the broker is the agent of the assured for most purposes. Any failure by the broker to disclose to the underwriters facts communicated to him by the assured will, therefore, entitle the underwriters to avoid the policy. The principle has broken down to some extent, as the courts have recognised that a broker may act for underwriters in some respects (eg under a binding authority) and that some aspects of a broker’s functions cannot be classified as agency for either side (eg the obligation on a marine broker to pay the premium, under s53 of the Marine Insurance Act 1906). Nevertheless, special circumstances aside, the basic principle remains in place. This is illustrated by the important recent decision of Christopher Clarke J in Goshawk Dedicated Ltd v Tyser & Co Ltd [2005] EWHC 461 (Comm), [2005] Lloyd’s Rep IR (forthcoming), which confirms that documents on the broker’s placing file and related documents are not the property of underwriters and inspection of them cannot be demanded.