The late payment of insurance claims remains a lively topic of debate among insurance lawyers and professionals. The Law Commission has presented proposals for the reform of the law concerning the remedies available for the late payment of claims. This paper considers the current state of the law concerning the recovery of damages for the late payment of insurance claims, the Law Commission’s proposals and the policy reasons relating to law reform. The paper goes on to consider what matters should be taken into account in developing any law reform.

English insurance law has attracted a considerable amount of criticism over the years, because of the perception—in some, though not all, respects fully justified—that it can operate harshly, without regard to proportion, against the assured. The development of insurance law has resulted in the formulation of principles which are unique and cannot be found elsewhere in the English law of contract. It is these highly individual principles which are targeted for reform. Of course, if the relevant principles were common to other areas of the law, one would imagine that the attack would be made not just on the law of insurance, but on the general law.