The undisclosed principal doctrine

English agency law has long recognised the anomalous ‘undisclosed principal’ doctrine. Under this doctrine, if A makes a contract with T in A’s own name, it is open to P at a later date to assert that the contract was made by A on P’s behalf and that P is a (or indeed, the only) contracting party. This means that the resulting contract is between P and T. The result is difficult to reconcile with ordinary contractual principles, given that the identity of a contracting party may be crucial to the arrangement (as has been held in cases on mistake in contract), and seemingly entirely at odds with insurance law which is based upon disclosure of all material facts. There is, nevertheless, high authority for the proposition that the undisclosed principal doctrine applies to insurance law. The decision of Cooke J in Talbot Underwriting v Nausch Hogan & Murray, The Jascon 5 [2005] EWHC 2359 (Comm) (forthcoming in [2006] Lloyd’s Rep IR) is, however, a severe jolt to previous understanding, and indeed may be regarded as all but ruling out the application of that doctrine to insurance contracts. The Court was required only to decide preliminary issues, so the facts as stated were assumed to be correct for the purposes of the hearing.