However, the court held that fraud was not proven and, in any event, underwriters had waived the right to avoid the policy. Therefore, it did not consider at length the legal consequences of fraud and/or a breach of duty of utmost good faith. Again, the court failed to distinguish between the two defences. Such a distinction will only be made when a brave underwriter rejects a claim solely on the grounds of a breach of utmost good faith, ignoring fraud.

In summary, if a fraudulent claim is made out, the underwriter apparently has the right to reject the claim or avoid the contract-he has a choice. If a material fact is omitted or a misrepresentation is made in the course of a claims presentation, underwriters may avoid the contract. If an element of culpability is a requirement of the latter defence, then in most cases fraud will be alleged and it would seen unnecessary to complicate matters by extending the duty of disclosure to the making of claims.

A review of these issues by the House of Lords would be welcome and perhaps a solution may be to limit the duty of utmost good faith to placement but to imply into contracts of insurance a term whereby the assured must not make reckless or fraudulent claims. Further, the implied term could provide that the underwriter would have the option simply to reject the claim or avoid the contract ab initio. This would be consistent with the basis of the duty of good faith arising outside the contract. Thus, as soon as the contract becomes operational the obligations would then flow from the contract itself; namely the implied terms.