The facts that gave rise to two recent supreme court judgments in insurance law are similar. In the first case, the policyholder, when concluding an insurance contract, designates his son as occasional driver of a vehicle and himself as main driver, whereas his son is in fact the main driver of the vehicle. In the second case, the policyholder, when concluding an insurance contract, hided, among other things, a conviction for drunken driving.
In both cases, the insurance brokers are aware of this information, which is important for assessing the risk to be insured. In both cases, a serious car accident takes place. In both cases, the insurer discovers the fraud and brings a claim against the policyholders.
In the first case, the policyholder also starts an indemnity claim against his insurance broker. The judge rejected this indemnity claim in its entirety, basing its decision on the general legal principle of ‘fraus omnia corrumpit’. Generally, this principle implies a prohibition on fraud and a prohibition to benefit from this fraud. The Supreme Court overturned this decision of the judge. It can be deduced from the Supreme Court judgment that the general legal principle of ‘fraus omnia corrumpit’ does not exclude, in the event of concurrent errors by different persons (in this case the policyholder and the insurance broker), assessing the extent to which the error made by each of them contributed to the damage and, on that basis, determining the share of the damage that the liable person who has compensated the injured party can recover from the others.
In the second case, no appeal before the Supreme Court is made regarding the general legal principle of ‘fraus omnia corrumpit’, but rather regarding the nature of the claim made by the policyholder against his insurance broker. The Supreme Court is of the opinion that this is an own contractual claim of the policyholder against the insurance broker on the basis of which the policyholder is entitled to full compensation.
Cass. 30 september 2021 (C.20.0591.N) et Cass. 17 september 2021 (C.20.0254.F)
