The Commercial Case Law Index is a collection of judgments from African countries on topics relating to commercial legal practice. The collection aims to provide a snapshot of commercial legal practice in a country, rather than present solely traditionally "reportable" cases. The index currently covers 400 judgments from Uganda, Tanzania, Nigeria, Ghana and South Africa.
Get started on finding judgments that are relevant to you by browsing the topic list on the left of the screen. Click the arrows next to the topic names to reveal a detailed list of sub-topics. Most judgments are accompanied by a short summary written by subject-matter expert postgraduate students from the University of Cape Town.
The appellant had decided not to claim two previous accidents because he did not want to lose his no-claim bonus. This case highlights the effects of an “OUT bonus” clause within an insurance policy that positively discourages clients from submitting claims.
The court considered whether the appellant’s failure to disclose the two previous incidents in which the vehicle was damaged within 30 days, allowed the respondent to avoid liability in terms of the contract. The court had to decide whether the appellant’s inaction amounted to a breach of the insurance policy, which had stated in plain language that one is rewarded for not claiming.
The court held that the insurer’s policy created a self-absorption of any damage caused by the insured, whereby, the insured was to be paid 10% of their premiums after the first three years of the policy. The court held that this formed the basis of the appellant’s decision to not disclose his claims.
The court was not satisfied that the appellant’s failure to disclose the two previous incidents within 30 days amounted to a rejection of the claim. The court held that the obligation to report “incidents” created uncertainty, especially in situations whereby the insured had no intention of lodging a claim. In this case, it was evident that the appellant’s decision not to claim was a result of the attraction of the OUT bonus.
Thus, the court upheld the appellant’s claim and held that the defendant was liable to compensate the appellant.