A Critical Evaluation of the Duty of Disclosure in Marine Insurance - A comparative study of English and Nordic law

Abstract: The duty of disclosure is a system of rules applied during the period up until an insurance policy is concluded. In order to ascertain that the insurer gets all the information he needs to properly evaluate the risk, the prospective assured is under a duty to disclose all material circumstances regarding the risk. This duty has caused a great number of lawsuits in the UK, while there have hardly been any litigation on the matter in the Nordic countries. This thesis will highlight the main differences in the duty of disclosure in marine insurance, between the Nordic and the UK legal systems. As the Norwegian Marine Insurance Plan has transformed into a Nordic Marine Insurance Plan, many of the Marine Insurance Acts in common law countries are going under its first revisions in a hundred years and there will be a discussion on the likely development within the coming few years. Initially, the thesis will provide an overview of the English Marine Insurance Act, 1906 and the Nordic Marine Insurance Plan of 2013. The reader will be given a brief summary of the two sets of rules and how they have developed. Following the introductory chapters, there will be a more detailed description of how the duty of disclosure is regulated, and what the main differences are between the UK and the Nordic approach. As will be demonstrated, the UK system is more insurer friendly than its Nordic counterpart is. Furthermore, the remedy system under the UK Act is more rigid and may come out harsh on an assured who has failed to fulfil his duties. These, among others, are the differences that will be discussed for the purpose of the comparative analysis. The final part of the thesis will provide some examples of what the UK Law Commission has pointed out as areas in need of modification. Among the conclusions can be mentioned the lack of balance in the Marine Insurance Act, 1906, that are giving the insurers an incentive to claim breach of pre-contractual duties. This might be one of the main reasons to the high number of litigation mentioned above.