What is a ‘claim’?

In Direct Line Insurance plc v Fox [2009] EWHC 386 (QB) the assured entered into a settlement agreement with the insurers and then submitted false documents in order to obtain payment under it. HHJ Richard Seymour QC held that in those circumstances the assured did not lose the entire claim, because his fraud did not relate to the claim but only to payment under the entirely separate settlement contract.

Direct Line: the facts

The defendant assured, Mr Fox, owned a house in Loughton, Essex. He was also a director of a double-glazing company and had interests in a property development company. He obtained from the claimant insurers a buildings and contents policy on his house. The policy contained the time-honoured fraud clause: ‘If any claim or part of a claim is made fraudulently or falsely, the policy shall become void and all benefit under this policy will be forfeited.’