Informed Insurance Choice? The Insurer’s Pre-Contractual Information Duties in General Consumer Insurance
The Insurer’s Pre-Contractual Information Duties in General Consumer Insurance
PART III: Legal basis for and scope of insurer’s pre-contractual information duties
Today’s autonomous English law – unlike most continental jurisdictions – does not have a general principle of good faith. For this reason, contracting parties generally do not owe a duty to disclose material facts to each other, regardless of how dishonest such a nondisclosure may be in the individual case. Instead, it is at first deemed sufficient that parties avoid making misrepresentations. The term ‘good faith’ can however, also be found in English legislation in particular due to requirements of European law. Yet, in addition to the doctrine of misrepresentation, English law features a whole series of other specific solutions like undue influence and equitable estoppel, but also several restrictions on the exercise of rights founded in the law of remedies, all of which together may lead to results comparable to those reached in legal systems which are characterised by an overriding principle of good faith. Moreover, there are several statutory provisions which – contrary to the principle of caveat emptor – require the disclosure of certain information. And finally, exceptions from the basic assumption that ‘[a] duty to negotiate in good faith is unworkable in practice’ are recognised in particular for fiduciary relationships and for so-called contracts uberrimae fidei of which insurance contracts are doubtlessly ‘prime examples’. Within the scope of these ‘contracts of the utmost good faith’, the contracting parties owe each other the duty to disclose any information which is material to the contract. This of course clearly extends beyond the mere avoidance of misrepresentations.
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