The total word count for all questions should NOT exceed 4500 words. Any

words over this total will not be marked.



‘The duty of fair presentation…..encompasses both a duty to disclose, and a duty not

to misrepresent, material circumstances’ (Colinvaux’s Law of Insurance, 12th Edition,

Chapter 7, Section 3).

Explain and analyse the duty of fair presentation under the Insurance Act 2015

(‘the Act’). As part of this analysis you should consider the decisions in

Berkshire Assets (West London) Ltd [2021] EWHC 2689 (Comm) and Young v

RSA [2020] CSIH 25.

Do you believe the Act provides a balance between the requirements of insurers

and their insureds?



Facts relevant to both questions in Part B.

You are a trainee solicitor at Prime Legal LLP (‘Prime’), a firm of commercial solicitors.

Your supervisor is Nafisa Shah. Prime acts for Europe Insurance PLC (‘Europe’), which

has a thriving corporate insurance business. Europe has some queries for Prime as


QUESTION 2 (25 marks)

Continental Supermarkets Limited have a business interruption policy with Europe.

The policy incepted on 1 January 2022. The policy contains the following clause:

We will insure you for damage arising from fire. It is a requirement of this policy that

the insured will take all reasonable steps to protect property, minimise the risk of

damage, and ensure smoke and fire alarms are operative at all times. The insured

undertakes that it will prioritise these precautions.

Lightning strikes one of Continental’s warehouses during a heavy storm. Fire breaks

out immediately and severely damages the warehouse. Continental claims on its policy

with Europe. During investigations Europe discovers that, two weeks before the storm,

the fire alarm system had failed to operate for three days. It was also inoperative at the

time of the lightening strike.

Europe have asked Prime to investigate Continental’s claim.

Draft a memorandum to Nafisa Shah as follows:

(a) explaining whether this clause is a warranty, or some other term.

13 marks

(b) discussing whether there has been a breach of this clause.

8 marks

(c) outlining the consequences of breach.

4 marks

Note to candidates: Start the memorandum “To Nafisa” and sign it as “Trainee”.

You should include an introduction and a conclusion. Your name should not

appear anywhere on the memorandum

QUESTION 3 (25 marks)

Another of Europe’s insureds, Western Cargo Limited (‘Western’), has made a claim.

It is under its public liability policy which incepted on 1 January 2022. Europe has

reinsured the Western policy with Complex Reinsurance (‘Complex’). The reinsurance

policy is for a 60: 40 quota share, with Complex reinsuring 60% of the risk. The

reinsurance policy has the following clauses:

14. Settlements

Being a Reinsurance of and warranted same gross rate, terms and

conditions as and to follow the settlements of Reinsured and that Reinsured

retains during the currency of this Policy at the amount stated in the


19. Claims

(a) The Reinsured shall upon knowledge of any loss or losses which may

give rise to a claim, advise the Reinsurers thereof as soon as is

reasonably practicable and in any event within 7 days.

(b) The Reinsurers hereon shall control the negotiations and settlements

of any claims under this Policy. In this event the Reinsurers hereon

will not be liable to pay any claim not controlled as set out above.

One of Western’s lorries crashed into an office block in a town centre on 2 February

2022. The initial quantum of the claim was £10m. Europe commenced investigation

of the claim on 21 February and challenged the quantum. On 25 April Europe entered

mediation with the owners of the office block. On 10 June Europe settled with the

owners for £6m.

Europe notified Complex of the settlement on 5 July, requesting payment of £3.6m in

line with the quota share. Complex wrote to Europe yesterday saying there was late

notification, with no opportunity for Complex to be involved in the claim’s resolution.

Accordingly, Complex have rejected Europe’s request, saying that Europe are in

breach of their obligations (note to candidates: this correspondence is not enclosed).

Draft an email to Nafisa Shah advising whether Complex is obliged to pay the

reinsurance claim. Your answer should include discussion and application of

the relevant case law.

Note to candidates: Start the email “To Nafisa” and sign it as “Trainee”. Your

name should not appear anywhere on the email. You are required to refer to

appropriate authority in your answers.

[Total for Question 3: 25 marks]



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