Insurance Contracts CP - Law Reform Commission

ecause this would leave open an insurer to a more extended and unpredictable liability. 62 Most of the
responses to the Consultation exercise (and most were form lawyers and insurers) were against the
award of tort damages being available for breach of good faith. This must be seen in the light of the
decision of the Law Commissions to oppose the development of a duty of utmost good faith as either an
implied term or a tort, 63 favouring instead a statutory ―stand alone‖ duty subject to legislative restrictions.
9.51 Arguments of this kind provide a compelling case for declining to extend third party rights into
good faith obligations under insurable contract law. The Commission believes that section 8 of the
Married Women‟s Status Act 1957 already provides members of a family who are envisaged as
beneficiaries under a contract of insurance with statutory rights to compensation in specific circumstances
and the Commission believes that the extension of a post contractual duty of good faith to third party
beneficiaries is unwarranted.
10
62
63
Ibid.
Para 9.28 of Issues Paper 6 with possible increases in premiums. Summary of Responses to Issues Paper 6:
Damages for Late Payment and the Insurers‟ Duty of Good Faith, para 4.8.
193