HOBBINS V ROYAL SKANDIA LIFE ASSURANCE LTD

[2012] HKCFI 10, Hong Kong Court of First Instance, Justice Reyes, 6 January 2012

Insurance (broker) - Commission - Broker not disclosing amount of commission paid to him - Whether broker in breach of fiduciary duty - Whether assured could set aside insurance contract

Clearwater, an insurance broker, acted for Mr Hobbins in arranging for him to purchase Investment Linked Assurance Scheme products from Skandia. Clearwater made it known to Mr Hobbins that he would not have to pay for its services, and that it made money from commissions and fees paid by insurers. The ILAS products did not perform as well as Mr Hobbins had anticipated, and in the present proceedings he sought to set them aside and to recover his investment on the basis that Clearwater, in breach of its fiduciary duties, did not disclose precisely how much commission it would be earning.