Case Review: Saunders V Irish Life Plc

• Published date: 25 August 2020
• Subject Matter: Corporate/Commercial Law, Insurance, Food, Drugs, Healthcare, Life Sciences, Contracts and Commercial Law, Insurance Laws and Products, Food and Drugs Law
• Law Firm: Beale & Co
• Author: Mrs Tara Cosgrove, Sean O'Halloran and Conor Williams (Trainee Solicitor)

Insurance - failure to disclose depression and illegal drug use permits life insurer to decline indemnity

Tara Cosgrove, Se'n O'Halloran and Conor Williams review the judgment of the Irish High Court in Saunders v Irish Life Assurance plc [2020] IEHC 312 given 24 June 2020.

Summary

The plaintiff had jointly taken out a life assurance policy with her partner two years before the death of her partner. The defendant insurer declined to pay out on the plaintiff's claim in circumstances where it was alleged that the deceased had misrepresented his medical history (particularly concerning his use of illegal drugs) by failing to disclose these facts in an online pre-contract questionnaire.

The plaintiff's evidence was that as the questionnaire had been completed on her and her late partner's behalf by an employee of a bank, whom she claimed had not asked the deceased the relevant questions about his health, no further obligation to disclose existed.

The court rejected this, holding that irrespective of the fact of whether the deceased was specifically asked the questions by the bank official, he was under an obligation to correct the replies given in the questionnaire before entering into the contract of insurance.

Background

The plaintiff, together with and her late partner, Eamon Dunne applied for a joint life assurance policy with the defendant insurer in 2008. The online application was completed in the branch of Permanent TSB bank by an employee of that bank.

The application process required the plaintiff and deceased to answer a series of questions on their health. However, the plaintiff's evidence was that the bank official did not, in fact, put the questions in the proposal form to her and her late partner, and instead completed the questionnaire on both her and her partner's behalf, presumably based upon the bank official's own knowledge of the applicants' health and circumstances.

After the questionnaire was completed, the plaintiff and Dunne signed a declaration that acknowledged that they understood their obligation to disclose all material facts to the defendant. Shortly thereafter, a copy of the policy documents was sent to the plaintiff and Dunne together with a printout of the questions and answers submitted by the bank official on their behalf. The plaintiff and her partner were required to review the questionnaire prior to the commencement of cover. They did not do so.

Following the murder of Dunne in 2010, the plaintiff sought to claim on the...