Insurance Act 2015

Insurance Act 2015

2015 CHAPTER 4

Commentary on Sections

Part 2: the Duty of Fair Presentation

Section 6: Knowledge: general

68. As set out above, sections 4 and 5 respectively set out the categories of individual whose knowledge will be directly attributed to the insured and insurer. These rules are intended to replace the common law in the context of the duty of fair presentation. Section 6 sets out two further rules about an individual’s knowledge.

69. Section 6(1) provides that what an individual knows includes not only what it actually knows but also “blind eye” knowledge. The courts have consistently interpreted knowledge to include cases where someone has deliberately failed to make an enquiry in case it results in the confirmation of a suspicion.(17)

70. Section 6(2) concerns the situation in which an individual (an employee or agent) perpetrates fraud against his or her principal (whether the insured or the insurer). It is intended to capture a common law exception to the general rules of attribution, known as the Hampshire Land principle, which broadly means that a company or other principal is not fixed with knowledge of a fraud practised against it by its agent or officer.(18)

17

See, for example, Lord Scott in Manifest Shipping Co Ltd v Uni-Polaris Insurance Co Ltd (The Star Sea) [2001] UKHL 1, [2003] 1 AC 469 at [112].

18

From Re Hampshire Land Company [1896] 2 Ch 743. For Scotland, see L Macgregor, Agency (2013) para 13-24.