Whither the Duty of Good Faith in UK Insurance Contracts, John Lowry

106 CONNECTICUT INSURANCE LAW JOURNAL [Vol. 16:1
risk. In Noble v. Kennoway, the insured vessel had arrived safely at
Labrador but prior to being unloaded, it was used for fishing. 32
Subsequently, the vessel was taken by privateers while it was unmanned. 33
The owners’ claim for the value of the cargo was met with the defence by
the underwriters that they were not liable because of the delay in
unloading. 34 The insured argued that this was a trade usage in this
particular port because of the lack of warehousing. 35 Lord Mansfield,
finding for the insured, reasoned that every underwriter was presumed to
know the practices of the trade he insures and if he does not know then it is
his duty to inform himself of it. 36 He returned to the point in Mayne v.
Walter, where the insured’s claim for the loss of supercargo seized by the
French was met with the defence that he should have disclosed the
existence of a French ordinance prohibiting Dutch ships carrying the
supercargo of any country at war with France on pain of it being taken as
prize. 37 Lord Mansfield said that if both parties were ignorant of the
relevant fact, “the underwriter must run all risks: and if the [underwriter]
knew of such an edict, it was his duty to inquire, if such supercargo were
on board.” 38 He went on to note that “[i]t must be a fraudulent
concealment of circumstances, that will vitiate a policy.” 39 This has been
termed the narrow Mansfield rule. 40 Reflecting upon his original
formulation, Lord Mansfield appears to have come around to the view that
the duty is limited insofar as it must strike a balance between the parties so
as to achieve some symmetry between them. Indeed, by the early
nineteenth century, emphasis was being placed on Lord Mansfield’s clear
admonition that underwriters have a distinct investigative role to play in the
disclosure process. For example, in Friere v. Woodhouse, a marine
insurance case, Burrough J. said, “what is exclusively known to the assured
ought to be communicated; but what the underwriter, by fair inquiry and
due diligence, may learn from ordinary sources of information need not be
32 99 Eng. Rep. 326, 326-27.
33 Id. at 326.
34 Id.
35 Id.
36 Id. at 327.
37 Mayne v. Walter, (1782) 99 Eng. Rep. 548, 548-49. PARK, supra note 18,
at 196.
38 PARK, supra note 18, at 196.
39 Id.
40
See R. A. Hasson, The Doctrine of Uberrima Fides in Insurance Law - A
Critical Evaluation, 32 M.L.R. 615, 618 (1969).