Conditions Precedent — The Traditional Position -

English insurance law has traditionally provided a suite of uniquely powerful remedies to protect underwriters. They included (a) the remedy of complete avoidance (rescission) of the contract where material matters had not been disclosed, and/or where matters had been misrepresented, and (b) the remedy of complete discharge from liability where a warranty had not been exactly complied with1. One aspect of this approach has been the preparedness of the court robustly to uphold well drafted conditions precedent so as to discharge underwriters from liability, even in circumstances where the breach is insignificant and/or not even connected to the loss, as the below recent cases show.

English and Scottish insurance law has recently been substantially reformed by the Insurance Act 2015 (the Insurance Act). The effect of that Act is considered in detail in the Part Two of this series. Notwithstanding the new Act, the prior Common Law rules regarding conditions precedent will continue to remain highly relevant because: (a) they continue to apply to contracts underwritten before 12 August 2016 (b) parties can agree to “contract out” of the new default Insurance Act regime to apply the old law, and (c) the unreformed English Common Law position continues to apply or at least to influence the law in many Commonwealth jurisdictions, and in the Republic of Ireland.