Misrepresentation in UK Law

A claim was made under this Act and rejected by the insurance company. I shall quote a passage from the judgment of Lord Greene, Master of the Rolls, at page 58. At page 60 he said: "Under the general law of insurance an insurer can avoid a policy if he proves that there has been misrepresentation or concealment of a material fact by the assure. What is material is that which would influence the mind of a prudent insurer in deciding whether to accept the risk or fix the premium".

In my opinion, section 32 deprives a defendant of a limitation defence in two situations: (i) where he takes active steps to conceal his own breach of duty after he has become aware of it; and (ii) where he is guilty of deliberate wrongdoing and conceals or fails to disclose it in circumstances where it is unlikely to be discovered for some time.

He can do so if he can show that some fact relevant to his right of action has been concealed from him either by a positive act of concealment or by a withholding of relevant information, but, in either case, with the intention of concealing the fact or facts in question.

Morritt LJ said, in a passage I have cited, that in general a person is assumed to know the legal consequences of his actions and that, therefore, if an act has been done intentionally, the actor's unawareness of its legal consequences would be immaterial and no defence. The premise is, in my opinion, much too wide to constitute a satisfactory approach to construction of a statutory provision such as section 32(2).

I respectfully agree that it is difficult to think of a case of deliberate concealment for section 32(1)(b) purposes that would not involve unconscionable behaviour and that most cases of deliberate commission of breach of duty for section 32(2) purposes would be in the same state.

For myself, I do not find it absurd that the effect of section 32(1) is to afford to the plaintiff a full six year period of limitation from the date of the discovery of the concealment. In such a case, the plaintiff must have been ignorant of the relevant facts during the period preceding the concealment: if he knew of them, no subsequent act of the defendant can have concealed them from him.

I begin with the specific terms of s.32(1) (b) : 'any fact relevant to the plaintiff's right of action has been deliberately concealed from him by the defendant'. Those words describe the condition which must exist before the operative part of s.32(1) takes effect. There are four points on the wording of the paragraph which should be noted.