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Collateral lies: The lie is dishonest but the claim is not

By Nick Shaw, Margaret Campbell & Danielle Anderson on August 22, 2016
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The Supreme Court rules that a collateral lie embellishing a valid claim does not amount to a fraudulent claim.

Versloot Dredging BV and another (Appellants) v HDI Gerling Industrie Versicherung AG and others [2016] UKSC 45

Facts

The vessel DC Merwestone was incapacitated by an ingress of water which flooded the engine room. A claim was made in respect of damage to the engines under a policy of marine hull insurance in the sum of approximately €3.2 million.

The relevant individual employed by the vessel’s managers was frustrated by the delay in the insurers recognising the claim and making a payment on account. At a time when the cause of the flooding was unclear, the individual said that the bilge alarm had sounded but that the crew had been unable to investigate the leak because of rolling of the ship in heavy weather. The employee said that members of the crew had told him this when, in fact, it was merely his own theory.

The individual thought that, by making the statement, he could speed up payment of the claim when the insurers might otherwise focus on, for example, the potentially defective condition of the ship. In fact, the loss was covered by the policy and the issue of whether the bilge alarm had sounded was irrelevant.

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Photo of Nick Shaw Nick Shaw
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Photo of Margaret Campbell Margaret Campbell
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Photo of Danielle Anderson Danielle Anderson
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  • Posted in:
    Maritime
  • Blog:
    Ship Law Log
  • Organization:
    Reed Smith LLP
  • Article: View Original Source

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