Versloot Dredging BV v HDI Gerling Industrie Versicherung AG (The DC Merwestone)
[2016] UKSC 45
Independent editorial summary — not the official judgment. Read the full judgment via the source link.
Ratio Decidendi
The fraudulent claims rule does not extend to 'collateral lies' — lies told in support of a claim that is otherwise genuine. A policyholder who tells a lie that is not material to the claim does not forfeit the entire claim.
Facts
The insured vessel suffered flooding damage. The insured made a genuine claim but included a collateral lie about when the crew discovered the damage.
Judgment Summary
The Supreme Court held that the fraudulent claims rule applies only where the fraud is material to the claim. A collateral lie — one that does not affect the insured's entitlement — does not engage the rule.
Key Quotes
"A collateral lie, however reprehensible, does not justify the disproportionate sanction of forfeiture."
— Lord Sumption
Subsequent Treatment
Modified the common law fraudulent claims rule.
What To Do Next
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