Legal Updates

 Litigation and Dispute ResolutionMay 18, 2022

Proportionate remedies for misrepresentation

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In Tolan v McLaughlin & Greaney Insurances Limited T/A Future & Zurich Insurance PLC, [2022] IECA 27, the Court of Appeal upheld the decision of the High Court dismissing the plaintiff’s claim against, Future, his insurance brokers, and Zurich Insurance plc (“Zurich”), his insurers, arising from Zurich’s decision to withdraw storm cover retrospectively due to a misrepresentation in the proposal form.


The plaintiff, Mr Tolan, held an insurance policy with Zurich in relation to his farm and buildings. The policy had been placed through Future. In February 2017, Storm Doris damaged the plaintiff’s two cattle sheds, which had been insured with Zurich since April 2015. Following notification of a claim to Zurich in relation to storm damage to the sheds, Zurich declined to indemnify the plaintiff. Zurich did not repudiate the policy, instead, Zurich withdrew the storm cover retrospectively from policy inception in relation to the cattle sheds and refunded that part of the premium which related to the insured value of the cattle sheds. Zurich otherwise continued to provide cover to the plaintiff.

The reason for withdrawing the storm cover was that the description of the cattle sheds in the submission for insurance to Zurich was incorrect. The submission reflected that the cattle sheds had been built in 2007 and that the walls of the sheds were constructed of concrete block. The cattle sheds were in fact older and the walls were constructed of stone.

The High Court judgment

The primary issue of fact in the High Court was the source of the information given to Zurich to quote for the insurance cover for the cattle sheds.

The plaintiff claimed that Future’s employee should have notified Zurich that the buildings had been constructed in the 19th century and that Future compounded the errors made in the completion of a previous proposal form sent to his prior insurers, which referred to ‘2002’, as being the year of building for the cattle sheds.

Future maintained that the plaintiff told it in 2015 that the cattle sheds were built in 2007 and that any losses suffered by him were therefore as a result of his own actions. They also outlined that if the plaintiff had provided the correct information, he would not have been able to obtain storm cover in respect of the cattle sheds in any event due to their age.

The court noted that Zurich handled the claim in a way which reflected what they would have done at policy inception, if the correct material facts had been provided, and that the plaintiff could not therefore point to any losses suffered arising from the misrepresentation, as he could never have obtained storm cover for the cattle sheds. The court rejected the plaintiff’s argument that Future’s employee should have spent more time with him to ensure he understood that “the material description of the cattle sheds was vital”, noting that he must take responsibility for confirming the facts before and after the inception of the policy.

The court found that the plaintiff informed Future of the 2007 construction date and certainly did not inform it of the error in the proposal form following his receipt of it. The court also concluded that “unrealistic” was a mild word to describe the plaintiff’s claim that the broker was responsible for Zurich’s refusal to renew his insurance policy, noting that Zurich makes its own decisions. The plaintiff’s claims against the defendants were, therefore, dismissed.

The Appeal

The Court of Appeal commented that the key issue for determination by the High Court was where responsibility lay for the inaccurate information provided about the cattle sheds. The court noted that the trial judge determined that the responsibility lay with the appellant, and not with Future or its employee and concluded that the trial judge had an abundance of evidence to make his decision, which was supported by credible evidence.

The Court of Appeal was of the opinion that the conclusions which the trial judge reached were inevitable, and were the only conclusions that could reasonably be drawn from the evidence. The appeal was, therefore, also dismissed.


The above decision highlights the importance for an insured of answering all questions correctly in a proposal form for insurance cover. Section 8 of the Consumer Insurance Contracts Act 2019 (“CICA”), which commenced on 21 September 2021 and is discussed in our previous article (, outlines the pre-contractual duties of consumers and insurers. It requires that every insurer, before a contract of insurance is entered into or renewed, informs the consumer of the general nature and effect of the pre-contractual duty of disclosure. It will be important for insurance brokers to clearly advise their clients as to the extent of their pre-contractual duties and to document all advices given in this regard.

While not effective at the time of the above decision, or the facts at issue giving rise to the decision, section 9 of CICA provides for proportionate remedies for misrepresentation. In the case of a negligent misrepresentation, the section provides that if the insurer would have entered into the contract but on different terms (excluding terms relating to the premium), the contract is to be treated as if it had been entered into on those different terms, if the insurer so requires. The approach taken by Zurich in the above case is in line with the remedies now set out in section 9 of CICA.

As a consumer’s pre-contractual duty is confined to providing answers to questions asked, it is important that insurers ask all relevant questions so that they are in a position to avail of any proportionate remedies in the event of a misrepresentation. In the event that cover would not have been provided in the first instance had the correct information been provided, then an insured will have difficulty pointing to any losses suffered arising from the misrepresentation.

DISCLAIMER: This document is for information purposes only and does not purport to represent legal advice. If you have any queries or would like further information relating to any of the above matters, please refer to the contacts above or your usual contact in Dillon Eustace.

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