Utmost good faith

Limit No 2 Ltd v Axa Versicherung AG [2007] EWHC 2321 (Comm), a decision of Jonathan Hirst QC, sitting as a Deputy High Court Judge, was a relatively straightforward application of principles of utmost good faith to a facultative-obligatory reinsurance treaty. The main complaint, upheld by the Court, was that the reinsured had falsely stated that risks accepted by them were subject to large deductibles when this was not in fact the case. There were also subsidiary issues concerning the duration of a treaty and failure by the reinsured to declare risks on monthly bordereaux.