While the nature and scope of the pre-contractual duty of utmost good faith is fairly clear, the same, unfortunately, could not be said for the post-contractual stage. In the previous couple of decades, many contradicting views on this issue have been developed both by courts and academics. Recently The Star Sea, a case requiring a comprehensive legal analysis of principles in this area, reached the House of Lords. This article seeks to evaluate the nature and extent of the post-contractual duty of good faith in the light of the House of Lords’ judgment in The Star Sea. Broadly, it reaches the following conclusions: (1) The extent of the post-contractual duty of good faith varies according to the stage where it arises. (2) The duty, which arises in the claims context, should be restricted to certain types of conduct and come to an end by the commencement of legal proceedings. (3) Some points as to the nature of the duty in the claims context, i.e., remedies available, are far from being clear.

In English contract law, it is not a requirement that contractual duties will be performed in good faith.1 However, certain types of contracts, e.g., partnership2 and relations between fiduciaries,3 are regarded as contracts of utmost good faith and require honesty and full disclosure. Insurance contracts also belong to this category. The traditional justification for the existence of such duty in insurance contracts could be explained by the nature of the insurance relationship. The assured has been regarded as having “command” of the knowledge which is essential for the sake of assessing the insured risk. This uneven distribution of data is said to be the reason for imposition of the duty of good faith,4 allowing for a fair calculation of the risk to be made.5

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