Insurance Blog Post: The limits of contractual discretion: UK Acorn Finance Limited v Markel (UK) Limited [2020] EWHC 922 (Comm)

Melody Ihuoma |

In UK Acorn Finance Limited v Markel (UK) Limited, HHJ Pelling QC applied the Supreme Court’s decision in Braganza v BP Shipping Limited [2015] UKSC 17 in the context of an insurance dispute. The Judge found that an insurer had acted irrationally in concluding that misrepresentations made by the insured in risk profile documents were fraudulent. In particular, when exercising its contractual decision-making power, the insurer had failed to give due weight to the maxim that it was inherently more probable that any misrepresentation had been made negligently rather than dishonestly.

HHJ Pelling QC’s decision is considered by Melody Ihuoma of 4 New Square.

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