Patel v Windsor Life Assurance Company Ltd

In a life assurance claim, the claimant must prove the death of the life assured on the balance of probabilities. Where insurers allege fraud, they bear the burden of proof, but the evidence must be cogent and commensurate with the seriousness of the allegation. A policyholder’s deliberate failure to disclose a material fraudulent purpose breaches the duty of utmost good faith and entitles the insurer to deny cover. An assignee or beneficiary cannot obtain a better claim than the original policyholder. Fraudulent representations, unexplained inconsistencies and unreliable evidence may together justify findings of fraud and failure to prove death.

Vipul Patel claimed £250,000 under a life assurance policy issued on the life of a person known as Amitkumar A. Barot. Patel was trustee and beneficiary under the policy and claimed that Barot had died in India on 2 October 2001. Windsor Life denied liability, alleging that Patel and Barot had participated in a scheme to obtain substantial life cover by fraud and that Barot had not died.

The court had to determine whether the alleged fraudulent scheme had been proved and whether Barot’s death had been established. It also considered whether any failure to disclose the fraudulent purpose entitled the insurer to avoid or deny cover.

The claim was dismissed and judgment was entered for Windsor Life Assurance Company Limited.

1. The insurers bore the burden of proving the alleged fraud on the balance of probabilities. Because of the gravity of the allegation, cogent evidence was required, applying the approach identified in Ikarian Reefer [1995] 1 Lloyd’s Rep. 455 and Re H [1996] AC 563.
2. The court found that Patel and Barot had participated in a fraudulent scheme to obtain substantial life cover. The conclusion was supported by the unexplained and inconsistent income and property representations, the implausible film-related explanations, Patel’s role in completing applications, his use as beneficiary, and his procurement of a false accountant’s letter.
3. Patel’s previous convictions were evidence that he had committed the offences of which he was convicted under section 11 of the Civil Evidence Act 1968. His evidence was therefore approached with particular caution and was accepted only where supported by cogent independent evidence.
4. The evidence did not establish that Barot died on 2 October 2001. The death certificate was false, the cremation-register entry was unreliable, and the supporting witnesses were not credible or sufficiently corroborative. The court found that the steps taken to obtain the false documents formed part of the fraudulent scheme.
5. Even if the representations concerning Barot’s property and film remuneration had not induced the policy, Barot had failed to disclose the material fact that the policy was sought as part of a fraudulent scheme. That breached the duty of utmost good faith and entitled Virgin Direct to deny cover. Patel could have no better claim than Barot as trustee, assignee or beneficiary.