Lord ordinary finds life insurer not required to pay out £500k policy due to misrepresentations in proposal form

About this case:

• Citation:
  [2025] CSOH 52
• Judgment:
  External link
• Court:
  Court of Session Outer House
• Judge:
  Lord Sandison

Gillian Cowie, acting as executrix-dative of the late Mark Cowie, sought payment of £500,000 from Vitality Corporate Services Ltd, which the defender refused to pay on the basis that Mr Cowie had failed to take reasonable care not to make misrepresentations in the proposal form for the policy. Two other defenders named in the action who provided assistance to Mr Cowie in respect of the policy were not represented in proceedings, as the pursuer no longer sought a remedy against them.

The action was heard by Lord Sandison in the Outer House of the Court of Session. O’Neill KC and Welsh, advocate, appeared for the pursuer and McBrearty KC and Mitchell, advocate, for the first defender.

Obliged to report

Mr Cowie’s policy commenced on 2 December 2015 after the terms were concluded on or around 13 November 2015. He died on 25 October 2016 as a result of a brain haemorrhage, with his death certificate also recording coagulopathy and liver cirrhosis as causes of death. The defender asked the pursuer to provide it with authority to seek a targeted report from Mr Cowie’s GP, Dr McLennan, and it went on to obtain a variety of medical records under that authority.

After considering the content of the records provided by Dr McLennan, the defender advised him that Mr Cowie had not disclosed to it a long history of digestive system disorders, abnormal liver functions, and Barret’s Oesophagus. It told Dr McLennan that, had it been made aware of these matters by way of the proposal, it would have asked for a GP report that would have caused it to decline Mr Cowie’s application for cover. The pursuer was also made notified of the decision, which she appealed through Vitality’s internal processes but without success.

It was submitted for the defender that Mr Cowie’s misrepresentations were qualifying misrepresentations in terms of the Consumer Insurance (Disclosure and Representations) Act 2012. He was obliged to report any aspect of his health which he knew to be abnormal, or not in proper order, irrespective of whether he had received a formal diagnosis, and the questions posed to him were sufficiently clear. The unchallenged evidence before the court was that, but for those misrepresentations, Vitality would not have entered into an insurance contract with Mr Cowie.

For the pursuer it was submitted that even if there had been a qualifying misrepresentation, Vitality had not demonstrated that it would not have entered into the contract but for any misrepresentation. If it had sought further information about specific illnesses, it may have excluded them from cover, and acting reasonably it would not have refused all cover. Given that the cause of the Mr Cowie’s death was entirely unrelated to any of the matters on which it sought to rely, the obligation to make payment under the policy of insurance would, therefore, have remained unchanged.

Relatively easy conclusion

In his decision, Lord Sandison said of the existence of misrepresentations: “The evidence does leave no room for doubt that, on 30 November 2010, and thus within the 5-year period enquired about by the proposal form, Mr Cowie was treated for residual elements of Barrett’s which then existed in his oesophagus and which had survived an earlier treatment that had occurred outwith that period. It is incontrovertible that his denial in response to the relative question that he had had a disorder of the oesophagus within that period was objectively untrue and thus constituted a misrepresentation on his part.”

He continued: “Mr Cowie could have been in no doubt that he had had, within the period being enquired about, investigations which were not part of a routine ‘well person’ check and the results of which were abnormal. The relatively recent point at which he had been made aware of the abnormal nature of the results is not conducive to any conclusion that he may have been mistaken about whether or not that had occurred within the relevant period.”

Considering what Vitality would have done had it known about these conditions, Lord Sandison said: “The fact that the oral evidence was backed by reference to the relevant guidelines operative in 2015, coupled with the lack of specific cross-examination, results in a relatively easy conclusion that Vitality’s position that it would not have offered Mr Cowie cover on any terms but for the identified qualifying misrepresentations made to it by Mr Cowie, has been made out on a balance of probabilities, even if the precise mechanism by which that conclusion would have been reached cannot be definitively ascertained.”

He concluded: “Vitality has discharged the burden of demonstrating that Mr Cowie breached the duty incumbent on him to take reasonable care not to make misrepresentations to it before the consumer insurance contract between them was entered into. It has further shown that without those misrepresentations (which were careless within the meaning of the 2012 Act), it would not have entered into that contract at all. It is thus entitled to, and has, avoided the contract and refused the claim made under it, having returned the premiums paid.”

Lord Sandison therefore found that the defender was entitled to avoid the contract and granted decree of absolvitor.