HIH Casualty and General Insurance Ltd v Chase Manhattan Bank
Encyclopedia
HIH Casualty and General Insurance Ltd v Chase Manhattan Bank [2003] UKHL 6 is an English contract law
case, concerning misrepresentation
.
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.
Lord Scott dissented.
English contract law
English contract law is a body of law regulating contracts in England and Wales. With its roots in the lex mercatoria and the activism of the judiciary during the industrial revolution, it shares a heritage with countries across the Commonwealth , and the United States...
case, concerning misrepresentation
Misrepresentation in English law
Misrepresentation in English law is an area of English contract law, which allows a person to escape a contractual obligation or claim compensation for losses. If one person can show that she entered an agreement because of another person's false assurances, then the other person will be unable to...
.
Facts
Chase Manhattan BankChase Manhattan Bank
JPMorgan Chase Bank, N.A., doing business as Chase, is a national bank that constitutes the consumer and commercial banking subsidiary of financial services firm JPMorgan Chase. The bank was known as Chase Manhattan Bank until it merged with J.P. Morgan & Co. in 2000...
was in the highly speculative business of lending money against receipts from five future movies (in this case, Amy Foster
Swept from the Sea
Swept from the Sea is a 1997 American drama film based on a 1903 short story, "Amy Foster" by Joseph Conrad. It stars Vincent Perez, Rachel Weisz, Ian McKellen, Joss Ackland, Kathy Bates, Zoë Wanamaker and Tom Bell and was directed by Beeban Kidron....
, U Turn, Apt Pupil
Apt Pupil (film)
Apt Pupil is a 1998 American psychological thriller film based on the eponymous 1982 novella by Stephen King. The film was directed by Bryan Singer and stars Ian McKellen and Brad Renfro...
, The Mirror Has Two Faces
The Mirror Has Two Faces
The Mirror Has Two Faces is a 1996 American romance film produced and directed by Barbra Streisand, who also stars. The screenplay by Richard LaGravenese is based on the 1958 French film Le Miroir à deux faces written by André Cayatte and Gérard Oury, which focused on a homely woman who becomes a...
and The People vs. Larry Flynt
The People vs. Larry Flynt
The People vs. Larry Flynt is a 1996 American biographical drama film directed by Miloš Forman about the rise of pornographic magazine publisher and editor Larry Flynt, and his subsequent clash with the law. The film stars Woody Harrelson, Courtney Love, and Edward Norton.The film was written by...
). 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
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 Scott dissented.
See also
- English contract lawEnglish contract lawEnglish contract law is a body of law regulating contracts in England and Wales. With its roots in the lex mercatoria and the activism of the judiciary during the industrial revolution, it shares a heritage with countries across the Commonwealth , and the United States...
- Misrepresentation in English lawMisrepresentation in English lawMisrepresentation in English law is an area of English contract law, which allows a person to escape a contractual obligation or claim compensation for losses. If one person can show that she entered an agreement because of another person's false assurances, then the other person will be unable to...