Marine Insurance: Law and Practice
PRESENTATION OF THE RISK AND GOOD FAITH
This chapter is concerned with six topics. The first is the role of “good faith” in the law of marine insurance. As has been argued fully elsewhere,1 there are several ways in which “good faith” or its opposite could influence the outcome of contractual relationships. However, despite a time-honoured, famous dictum by Lord Mansfield, possibly English law’s greatest commercial law judge,2 English commercial law has famously not accepted a general principle of good faith. Nonetheless, the idea has continued to have undue influence in English insurance law by virtue of the attractiveness of Lord Mansfield’s dictum and its enshrinement in the Marine Insurance Act 1906, section 17.3 Secondly, the Act contains the only known example of the supposed principle of good faith in English insurance law, and the main subject to be considered in this chapter, namely, the exceptional rule that the proposer negotiating a contract of marine insurance is under a positive duty to disclose information to the insurer. Thirdly, there are consequences for misrepresentations made during the negotiating process. Non-disclosure and misrepresentation differ to the extent that non-disclosure is concerned with a lack of good faith through inaction, whereas misrepresentation is arguably bad faith through action. However, the two subjects are both concerned with statements made or not made during the process for negotiating a contract, and are dealt with in the Act together with its statement on good faith generally, so are appropriately considered together here.