On 19 October, the judgment of Mr. Justice Hunt in the case of Richardson v Financial Services Ombudsman & anor was uploaded to the courts website. This was an appeal of a decision of the Financial Services Ombudsman (FSO) stating that an insurance policy could be rendered void by material non-disclosure. The High Court upheld the FSO finding as it was not vitiated by a serious or reviewable error.
The facts of the case were that the relevant insurer refused to provide indemnity under a life insurance policy purchased in 1996 as the insured, who died in 2013, had not disclosed certain matters in relation to his medical history. While the incidents, which occurred in 1991, did not require any additional treatment, the insurer's assertion was that, had they known these facts, they would not have issued the policy of insurance.
The High Court held that neither a lack of intent to wilfully mislead or deliberately conceal information nor a belief that a matter is trivial are relevant to the issue of material non-disclosure. The proposal form explicitly set out that if the applicant was unsure as to the materiality of a fact it should be included. The proposal form also clearly outlined the duty on the insured to answer the questions, which were not open ended or ambiguous, "fully, correctly and truly". This obligation was not qualified by reference to the best of the insured's knowledge. The form also defined the term `material fact', as a fact which would have reasonably affected the mind of a reasonably prudent insurer in determining whether it would issue a policy, and specified that these facts could relate to matters not raised in the form. The policy conditions stated that the insurer would be entitled to avoid the policy if the questions were answered incorrectly.
Despite the fact that the issues were relatively immaterial and occurred long before the death of the policy holder the High Court held that the insurer was entitled to repudiate the policy. It pointed out that it is well established that if the insurer proves misrepresentation of a material fact it is entitled to avoid the policy.
A link to the judgment is here.