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8 - Making the claim (Who can claim? (Trusts (Advantages (Money goes…

- - - - Injured party would have to compete with other creditors
    - - Can bypass other creditors
  - - - Policyholder can claim indemnity on behalf of such additional drivers
    - - Or Motor Insurers' Bureau if negligent driver is uninsured
  - - - Can't claim on policy but can influence claim settlement
  - - - Frequently occurs in life insurance
    - - Money goes straight to beneficiary and not counted as part of estate
      - Safe from creditors if insured goes bankrupt
    - - If policy is for benefit of spouse or children, trust automatically created in favour of them
    - - Can only arise in connection with property insurance
    - - Technically benefit from contract but can't claim in their own name
  - - - e.g. other firm acting as principal, owners of plant hired in etc.
    - - Often enough to override Act in itself
  - - - Legal assignment
        
        Assignee can enforce contract in own name
      - Equitable assignment
        
        Assignee must join assignor in action
  - - - TP can enforce contractual term if...
        
        Contract provides they may do so
        
        Contract purports to confer a benefit on TP
      - TP cannot claim if it appears parties did not intend to make contract enforceable by TP
- - - - Expense incurred to prevent damage not covered unless policy states otherwise
      - Marine insurance
        
        Policies contain a 'sue and labour clause' which entitles insured to claim expenses incurred preventing or minimising loss
    - - Policies usually require insured to take reasonable precautions to avoid/mitigate loss/damage
      - Damage to subject matter should be distinguished from costs incurred to prevent/minimise loss
    - - Chain is broken if there is a new intervening cause
  - - - Insured peril combined with...
        
        Uninsured peril
        
        Insurers are liable for the whole loss
        
        Excluded peril
        
        The exclusion prevails and the insurer has no liability at all
    - - Would have caused loss on their own
    - - Wouldn't have caused loss on their own
  - - - Normally disregarded by law when considering proximate cause
    - - Two or more perils operating together to cause a loss
  - - - Sometimes excludes losses caused directly or indirectly by a peril
      - Insurer can avoid liability even if excluded peril is only remote cause
  - - - Named perils policy (e.g. fire insurance)
        
        Excluded perils
        
        Uninsured perils
        
        Insured perils
      - All risks policy (e.g. personal all risks)
        
        Excluded perils
        
        Wear and tear and deterioration
        
        Insured perils
        
        Any other fortuitous loss
  - - - Insurer may require insured to prove loss was not caused by excepted peril
- - - - Insured must prove that they haven't done so
  - - - Claims handling rules require insurers to...
        
        Provide reasonable guidance to insured
        
        Not unreasonably rejecting a claim
        
        Handle claims promptly and fairly
        
        Settle claims promptly omce settlemet has been agreed
  - - - In their best interest to provide as much info as possible and cooperate with insurer
    - - Loss was caused by insured peril
      - The amount of the loss
  - - - Allows court to award damages for late payment where the insured has acted unreasonably
      - Implied term under contract that insurer must pay all claims within a reasonable time
      - Contracting out of the provision to detriment of a consumer is of no effect
      - Non-consumer can't be placed in worse position than IA provides if insurer is deliberate or reckless in breach
        
        Insurer may otherwise contract out if transparency requirement is met
  - - - Because this will be a condition precedent to liability
      - English law specifically prohibits denying claims on this basis for compulsory insurances
    - - Policy condition may require insured to provide continuing assistance after notification
      - If insured doesn't comply but TP does, insured cannot avoid claim
- - - - Prosecuting body will have to meet criminal standard of proof
        
        'Beyond reasonable doubt'
      - Insurer will only have to meet civil standard when pursuing civil remedy
        
        'On the balance of probabilities'
        
        In reality higher than this and burden of proof is very much with insurer
    - - Fraudulent statements designed to increase likelihood of claim being paid
        
        Underlying claim may be genuine
      - Sharon's Bakery (Europe) Ltd vs AXA Insurance Plc (2012)
        
        Fire caused genuine machinery loss but insured forged receipts they had lost
        
        Insured forfeited whole claim
      - Versloot Dredging BV vs HDI Gerling (2016)
        
        Water had frozen in pipes, then melted flooding engine room
        
        Insured was worried that insurer would claim negligence against senior management
        
        Falsely claimed alarm went off and that crew ignored it
        
        Insurer tried to avoid claim upon discovery of lie
        
        Supreme Court held that the lie must be relevant to existence or amount of insured's entitlement and claim was paid
    - - "When someone invents or exaggerates a claim, or does not tell the truth in order to obtain cheap insurance"
      - The Fraud Act (2006)
        
        Person guilty of fraud if they...
        
        Dishonestly make a false representation
        
        Dishonestly fails to disclose information
        
        Dishonestly abuses their position
  - - - Criminal Justice and Courts Act (2015)
        
        Whole claim now struck out by court if any part of it is found to be 'fundamentally dishonest'
      - Previous attitude of courts was to allows genuine part of a claim to continue, even if there had been fraudulent exaggeration
    - - Insurer can pursue for losses from fraudulent insured or TP if criteria for tort of deceit has been met
    - - Common law established remedy as forfeiture of entire claim
      - Insurance Act (2015)
        
        Insurer not liable to pay claim and may terminate policy from date of discovery
        
        If termination, insurer may keep all premiums paid and refuse claims after the fraud
        
        Employee making fraudulent claim does not impact on other employees' cover
    - - Insurer may be able to recover money after conviction, as this allows confiscation of assets fraudulently obtained
      - Also possible without conviction, e.g. if person has fled abroad