Scoping study considers more areas for insurance contract law review

The Law Commission is to consider whether the law on insurance fraud should be reformed, as part of its examination of insurance contract law.

The body also highlighted a range of other areas that it will be considering for reform as part of its initial scoping study. These included the question of whether to codify existing insurance law into a single Act, contract certainty and the law relating to the agency status of brokers.

The Law Commission has already said it will examine the law on non-disclosure and breach of warranty, but said it would look at other areas if there is a need to.

Speaking at a seminar introducing the scoping paper, Professor Hugh Beale, the law commissioner in charge of the project, called on the insurance industry to provide feedback on the areas it thought were the most "problematic" and so ought to be reviewed.

"If there is sufficient problem to make it worth looking at, we will," he said.

On the issue of fraud, Beale said: "Fraudulent claims are clearly a matter of great concern and it seems there may be a case for considering whether a definition of fraud and a statement of its effects would help insurers. There is still some uncertainty."

In relation to a new insurance code collating common law and statute, Beale said the advantage would be an "accessible" body of law. The case for a consumer insurance code was "much stronger" given consumers' lack of expertise on such matters, he added.

A spokesman for the ABI said the law on fraud needed to be addressed. "Insurers' hands need to be strengthened with regard to fraud."

On codification, he said: "Where there is scope to codify and simplify the law, this has to be welcomed."

The closing date for responses is 19 April. A consultation paper will be produced within a year to 18 months' time.

Under consideration
Insurable interest

The definition of insurance

Agency and insurance


Joint policyholders

Post-contractual good faith and fraud

Worthless policies

Contract certainty