Claims

Unfair terms in insurance contracts

Bankers Insurance Co Ltd v South [2003] EWHC 380 (QB), forthcoming in Lloyd’s Rep IR, a short judgment of Buckley J, is the first insurance case to consider the application of the Unfair Terms in Consumer Contracts Regulations 1994 (SI 1994 No 3159) (replaced with some modifications in 1999) to the terms of an insurance contract. The Regulations only apply where the assured is not acting in the course of a business, and in the vast majority of such cases any disputes will be handled by the Financial Services Ombudsman Bureau, so the number of opportunities for the courts to apply the Regulations in insurance cases will obviously be very limited. Nevertheless, the decision is of interest as it provides guidance to insurers on the Regulations and it also demonstrates that claims conditions not expressed as conditions precedent may in certain cases have some effect on the rights of insurers.