Bad faith in the US and UK

US insurers have lived with the concept of bad-faith damages for some time. JACQUETTA CASTLE (left) and MARCUS MANDER consider the arguments for and against introducing them to the UK

WHATEVER the precise scope of the post-contractual duty of good faith of the parties to an insurance contract, it has been clear since Banque Financière de la Cité v Westgate Insurance [1991] and The Star Sea [2001] that the only remedy for its breach is avoidance of the policy.