Court House of Lords | ||
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Citation(s) [2003] UKHL 6, 1 All ER (Comm) 349 Similar Carter v Boehm, Edgington v Fitzmaurice, Esso Petroleum Co Ltd v, Interfoto Picture Library Lt, Smith v Hughes | ||
HIH Casualty and General Insurance Ltd v Chase Manhattan Bank [2003] UKHL 6 is an English contract law case, concerning misrepresentation.
Contents
Facts
Chase Manhattan Bank was in the highly speculative business of lending money against receipts from five future movies (in this case, Amy Foster, U Turn, Apt Pupil, The Mirror Has Two Faces and The People vs. Larry Flynt). The bank wanted to protect against its substantial risk. So it took out a policy of insurance with HIH Insurance. Intermediaries who knew about movies, much more than either the bank or the insurer, negotiated. The bank made a claim for insurance cover. HIH resisted the bank's claim and in doing so alleged misrepresentations, both negligent and fraudulent by the bank’s agents (not the bank itself). The insurance contract had disclaimers for misrepresentations by the bank. One issue was whether the disclaimers could absolve the bank of liability for misrepresentation.
Judgment
The majority of the House of Lords (Lord Bingham, Lord Steyn, Lord Hoffmann, Lord Hobhouse) held the disclaimers could exclude liability for negligent misrepresentation, but not for fraud, were it established. You could exclude liability for someone else’s fraud, but not your own. They said that to try and exclude liability for one's own fraud would be contrary to public policy.
Lord Bingham said the following.
Lord Scott dissented.