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Insurance/Full Disclosure of Material Facts


Insurance Litigation:

The Onus on a Claimant of Full Disclosure of Material Matters In the recent case of Caroline Coleman v New Ireland Assurance Plc trading as Bank of Ireland Life ( IEHC 273) the Defendants (“New Ireland”) sought to defend proceedings on the basis of a failure to adequately disclose material matters regarding medical conditions at the time when the insurance policy was first put in place.

The failure to make full disclosure to an insurance company can have very serious consequences for a claimant and may result in an insurance policy not being upheld. It was established in Keating v. New Ireland Insurance Company [1990] 2 I.R. 383 that “any material non-disclosure or any materially inaccurate answer to a question on a proposal form are to be judged by reference to the knowledge of the applicant/proposer and whether answers given were to the best of the proposer’s ability and truthful.”

In the recent case concerning Caroline Coleman, the Plaintiff was diagnosed with multiple sclerosis (“MS”).

In the late 1990s, she had entered into an insurance policy with the Defendants, which had included so called Critical Illness cover. Part of the relevant policy terms provided for the payment to Ms. Coleman of €95,231 in the event of her coming to suffer from various specified illnesses, including MS.

At the time of entering the insurance policy Ms. Coleman signed a proposal form which contained questions relating to Ms. Coleman’s health history. It was accepted by Ms. Coleman that the representative of the insurance company had explained to her, in advance of going through the specific questions, the importance of making full disclosure of any material matters concerning her health.

The following year Ms. Coleman increased her cover and a further application form and questionnaire was filled in. Eight years prior to the proposal form being filled in, when Ms. Coleman was nineteen years old and had just commenced study as a trainee nurse, she began to suffer some problems with her eyesight leading to her attending her general practitioner on Christmas Day of 1990.

The general practitioner (Dr. Herlihy) gave evidence to the effect that he was concerned that the symptoms which she displayed might be indicative of MS. He also made it clear that he did not, on the occasion in question, inform Ms. Coleman of his concerns because he was worried as to the effect which an expression of those concerns might have on her. At Dr Herlihy’s suggestion, the Plaintiff went for tests in Cork Regional Hospital, also on Christmas Day.

After some tests she was given some treatment in the form of drops and asked to come back for further tests a number of days later. She returned to the hospital on the 3 January 1991 and was discharged three days later. Contemporary medical records disclose that by that stage Ms. Coleman had become asymptomatic. A formal diagnosis of MS was not made at this time. The doctors concerned believed that it was highly likely that Ms. Coleman was suffering from MS.

However Ms Coleman was not informed of their belief.

She suffered no further relevant symptoms that required medical attention prior to filling in the proposal form eight and (in the case of the top-up proposal) nine years later. On the basis of this evidence, Counsel for New Ireland accepted that no case could legitimately be made out for suggesting that Ms. Coleman was in breach of any obligation to disclose MS.

New Ireland was instead relying on the Plaintiff’s failure to disclose the investigations carried out and the attendant tests and consultations with doctors. However the Plaintiff maintained that at the time when she gave answers to the representative of New Ireland to enable the proposal form to be filled in she had completely put the incident some eight years earlier out of her mind.

The question of full disclosure of material matters and the related complications that arise in insurance litigation are well documented in this judgment.

Mr Justice Clarke however summarised the relevant test when addressing claims of this nature as follows:-

1. Is the claimant guilty of any material non-disclosure of a fact which they knew at the relevant time?

2. Was there a failure by the claimant to answer any question truthfully or to the best of their knowledge at that time? and

3. Was the claimant in breach of any warranty or condition contained within the contract of insurance?

The Court in the present case found in favour of the Plaintiff on the basis of the above. An award of €95,230.76 was made representing the payment that should have been received by Ms Coleman in 2003 together with interest.

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