Utmost good faith in insurance contract : a comparative study between Malta and the UK

Abstract

This dissertation aims to compare the legal principles and practical applications of utmost good faith in insurance within the legal systems and practices in Malta and the UK, focusing on the significance of utmost good faith in insurance contracts and the implications of breaching this principle through non-disclosure or misrepresentation of material facts. The principle uberimma fides, is a fundamental concept in the insurance industry, requiring both the insured and the insurer to openly share all pertinent information that could impact the proper assessment of a risk prior to undertaking an insurance contract or settling a claim. Thus, breaching this principle could result in the invalidation of the policy or the refusal of a claim. However, the onerous requirements of utmost good faith have led to debates and court involvement in interpreting and applying it across different situations, raising concerns about the equitable position of the contracting parties. The dissertation provides an overview of the insurance law framework, emphasising the reliance on honest statements of the parties, particularly the proposer/insured, examines the concept of materiality and the effect of breaching material facts through non-disclosure and misrepresentations and presents a comparative analysis of the judicial decisions in the UK and Malta, drawing conclusions on the similarities and differences in these decisions and their respective contributions to the development of the legal principles of utmost good faith in insurance. Overall, this dissertation employs a desk-based methodology, utilising a rigorous qualitative approach to review relevant literature, including legislation, case law, and books by respected authors.