{"id":68,"date":"2014-08-04T00:00:00","date_gmt":"2014-08-03T23:00:00","guid":{"rendered":"https:\/\/fenchurchlaw.hostingsystems.co.uk\/uk\/blog\/2014\/08\/04\/privy-council-finds-that-a-policyholders-alteration-of-invoices-submitted-in-support-of-an-insurance-claim-did-not-constitute-a-fraudulent-device\/"},"modified":"2024-08-21T17:02:17","modified_gmt":"2024-08-21T16:02:17","slug":"privy-council-finds-that-a-policyholders-alteration-of-invoices-submitted-in-support-of-an-insurance-claim-did-not-constitute-a-fraudulent-device","status":"publish","type":"post","link":"https:\/\/fenchurchlaw.com\/en-uk\/privy-council-finds-that-a-policyholders-alteration-of-invoices-submitted-in-support-of-an-insurance-claim-did-not-constitute-a-fraudulent-device\/","title":{"rendered":"Privy Council finds that a policyholder\u2019s alteration of invoices submitted in support of an insurance claim did not constitute a \u201cfraudulent device\u201d"},"content":{"rendered":"<p>The case of <em>Beacon Insurance Company Ltd v Maharaj Bookstore Ltd<\/em> [2014] UKPC21 concerned an insurance claim arising from a fire and the insurance company\u2019s rejection of that claim on the ground that part of it had involved fraudulent devices.<\/p>\n<p>A fire at Marahaj\u2019s premises had destroyed stock worth in the region of $750,000.00 Insurers refused indemnity on the basis that some of the invoices submitted in support of the insurance claim had been altered by the policyholder (the policy included an express condition that all benefit under the policy would be forfeit if any fraudulent means or device was used by the policyholder).<\/p>\n<p>The trial judge accepted that the policyholder had altered certain invoices, but that the alterations had not been made for any fraudulent purpose or with any fraudulent intention. Rather that the stock in question had genuinely been purchased by the insured.  The Court of Appeal allowed an appeal by the insurers, and the Privy Council has now overturned the Court of Appeal\u2019s decision and reinstated the first instance decision in the policyholder\u2019s favour.<\/p>\n<p>In reaching its decision the Court emphasised that in the leading case on fraudulent devices (<em>Agapitos v Agnew<\/em> [2003] QB 556) it was made clear that a fraudulent device requires not only an intention that an action will improve the policyholder\u2019s position in relation to the processing of a claim, but also that the policyholder\u2019s intention is dishonest.  As quoted by the Privy Council from the judgment of Mance LJ in Agapitos:<\/p>\n<p>          \u201c<em>a fraudulent device is used if the insured believes that he has suffered the loss claimed but seeks to improve or embellish the facts surrounding the claim <strong>by some lie<\/strong><\/em> (the Board\u2019s emphasis).\u201d<\/p>\n<p>The Privy Council found that the Judge at first instance had been entitled to decide that the policyholder\u2019s alteration of invoices submitted to the insurer was free of any dishonest intent.  In the words of the Privy Council:<\/p>\n<p>        <em>  \u201cwhile foolish, such tampering was far from conclusive evidence of dishonesty on [the policyholder\u2019s] part\u201d<\/em>.<\/p>\n<p><strong>David Pryce comments on the case:<\/strong><br \/>\n&#8216;Insurance law is technical and often counter intuitive.  However, underpinning it is the basic principle that insurers should pay, promptly and in full, genuine claims made by honest policyholders.  It is sometimes easy to forget that the technicalities and complexities of insurance law are all designed to meet that simple principle.  This decision is another in an increasingly long line which show the Courts taking a pragmatic and flexible approach in order to keep that principle in the foreground where it belongs.&#8217;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The case of Beacon Insurance Company Ltd v Maharaj Bookstore Ltd [2014] UKPC21 concerned an insurance claim arising from a [&hellip;]<\/p>\n","protected":false},"author":12,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[3],"tags":[],"class_list":["post-68","post","type-post","status-publish","format-standard","hentry","category-news"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.3 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Privy Council finds that a policyholder\u2019s alteration of invoices submitted in support of an insurance claim did not constitute a \u201cfraudulent device\u201d - Fenchurch Law UK<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/fenchurchlaw.com\/en-uk\/privy-council-finds-that-a-policyholders-alteration-of-invoices-submitted-in-support-of-an-insurance-claim-did-not-constitute-a-fraudulent-device\/\" \/>\n<meta property=\"og:locale\" content=\"en_GB\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Privy Council finds that a policyholder\u2019s alteration of invoices submitted in support of an insurance claim did not constitute a \u201cfraudulent device\u201d - Fenchurch Law UK\" \/>\n<meta property=\"og:description\" content=\"The case of Beacon Insurance Company Ltd v Maharaj Bookstore Ltd [2014] UKPC21 concerned an insurance claim arising from a [&hellip;]\" \/>\n<meta property=\"og:url\" content=\"https:\/\/fenchurchlaw.com\/en-uk\/privy-council-finds-that-a-policyholders-alteration-of-invoices-submitted-in-support-of-an-insurance-claim-did-not-constitute-a-fraudulent-device\/\" \/>\n<meta property=\"og:site_name\" content=\"Fenchurch Law UK\" \/>\n<meta property=\"article:published_time\" content=\"2014-08-03T23:00:00+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2024-08-21T16:02:17+00:00\" \/>\n<meta name=\"author\" content=\"Michael Hayes\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Michael Hayes\" \/>\n\t<meta name=\"twitter:label2\" content=\"Estimated reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"2 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\\\/\\\/fenchurchlaw.com\\\/en-uk\\\/privy-council-finds-that-a-policyholders-alteration-of-invoices-submitted-in-support-of-an-insurance-claim-did-not-constitute-a-fraudulent-device\\\/#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/fenchurchlaw.com\\\/en-uk\\\/privy-council-finds-that-a-policyholders-alteration-of-invoices-submitted-in-support-of-an-insurance-claim-did-not-constitute-a-fraudulent-device\\\/\"},\"author\":{\"name\":\"Michael Hayes\",\"@id\":\"https:\\\/\\\/fenchurchlaw.com\\\/en-uk\\\/#\\\/schema\\\/person\\\/0dc618622f4d437bfe590862d6078dd7\"},\"headline\":\"Privy Council finds that a policyholder\u2019s alteration of invoices submitted in support of an insurance claim did not constitute a \u201cfraudulent device\u201d\",\"datePublished\":\"2014-08-03T23:00:00+00:00\",\"dateModified\":\"2024-08-21T16:02:17+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\\\/\\\/fenchurchlaw.com\\\/en-uk\\\/privy-council-finds-that-a-policyholders-alteration-of-invoices-submitted-in-support-of-an-insurance-claim-did-not-constitute-a-fraudulent-device\\\/\"},\"wordCount\":451,\"commentCount\":0,\"articleSection\":[\"News\"],\"inLanguage\":\"en-GB\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\\\/\\\/fenchurchlaw.com\\\/en-uk\\\/privy-council-finds-that-a-policyholders-alteration-of-invoices-submitted-in-support-of-an-insurance-claim-did-not-constitute-a-fraudulent-device\\\/#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/fenchurchlaw.com\\\/en-uk\\\/privy-council-finds-that-a-policyholders-alteration-of-invoices-submitted-in-support-of-an-insurance-claim-did-not-constitute-a-fraudulent-device\\\/\",\"url\":\"https:\\\/\\\/fenchurchlaw.com\\\/en-uk\\\/privy-council-finds-that-a-policyholders-alteration-of-invoices-submitted-in-support-of-an-insurance-claim-did-not-constitute-a-fraudulent-device\\\/\",\"name\":\"Privy Council finds that a policyholder\u2019s alteration of invoices submitted in support of an insurance claim did not constitute a \u201cfraudulent device\u201d - 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