Post‐Contractual Good Faith – Change in Judicial Attitude?
That insurers have already honed the doctrine of pre-contractual uberrimafides to a most formidable defence which has few peers in terms of harshness, is well beyond dispute. The burning question now is whether the courts will allow insurers further licence to similarly fashion an equally potent weapon for disputes relating to post-contractual breach of good faith. The focus on the post-contractual breach of an insurance contract appears to be a relatively recent development embryonic when compared with its precontractual counterpart. Actually, some earlier dicta1 had already indicated that the pre-contractual duty of disclosure ought to be viewed as merely one aspect of a more multi-faceted uberrima fides doctrine and there should, by extrapolation, exist a duty to act in utmost good faith throughout the entire duration of the insurance contract.2 This issue assumed increasing impetus during the last two decades which saw a perturbing rise in the number of insurers3 who resorted to post-contractual breach of good faith as their defence against claims (including those with fraud4 allegations). However, it recently seemed to be beaten into retreat after the precise delineation of its scope and application came to a head in the landmark cases of The Star Sea5 (House of Lords) and The Mercandian Continent6 (Court of Appeal). Close on their heels comes the appellate decision of The Aegeon7 which has added an interesting twist to the uberrimafides equation.