Duty to Disclose in UK Law

There are certain contracts expressed by the law to be contracts of the utmost good faith where material facts must be disclosed; if not the contract is voidable. Apart from special fiduciary relationships contracts for partnership and contracts of insurance are the leading instances. In such cases the duty does not arise out of contract; the duty of a person proposing an insurance arises before a contract is made; so of an intending partner.

A director's duty to act so as to promote the best interests of his company prima facie includes a duty to inform the company of any activity, actual or threatened, which damages those interests. A director who wishes to engage in a competing business and not to disclose his intentions to the company ought, in my judgment, to resign his office as soon as his intention has been irrevocably formed and he has launched himself in the actual taking of preparatory steps.

But there is authority, including very strong persuasive authority, for the existence of such a duty.

However, in a criminal case, the Crown is under a duty to give disclosure of significant material which may affect the credibility of a prosecution witness. The most important illustration is, however, the rule that the prosecution is obliged to disclose previous convictions of a prosecution witness. In an important judgment in Wilson v. Police [1992] 2 N.Z.L.R. 533, the Court of Appeal of New Zealand considered what convictions of a prosecution witness must be disclosed.

The duty is, however, limited to facts which are material to the risk insured, that is to say, facts which would influence a prudent insurer in deciding whether to accept the risk and, if so, upon what terms and a prudent insured in entering into the contract on the terms proposed by the insurer.