English and Welsh Courts - Miscellaneous

IN THE CENTRAL LONDON COUNTY COURT

		26 January 2009

1. This judgment follows the trial between Mr Lewis, holder of a PHI Policy, and the Norwich Union (NU) who underwrote, issued and subsequently avoided that policy, of 4 preliminary issues, originally formulated and agreed and embodied in a consent order dated 20 May 2008.
2. As with many preliminary issues they turned out to contain a hidden wrinkle and had not apparently been understood by the parties in the same way. I was told of this problem at about 12:15 on the first day of the trial, and there was some suggestion by NU that if the 4^th issue were to be tried as suggested for Mr Lewis then further expert evidence might be required and/or they were not then ready to cross-examine Mr Lewis on the additional matter said to have been unexpectedly imported. I doubted that, and indicated that I was not prepared to try only some of the issues and not others: it would be me on that occasion or the matter would have to be adjourned to another court at another time. I gave the parties time for reflection and discussion. After the lunch-break the parties informed me that an amended version had been agreed; that no adjournment would be required and there would be no difficulty in examining Mr Lewis properly. However, it was agreed that the NU underwriter would give evidence first.
3. I am indebted to Counsel, Mr Ben Elkington for Mr Lewis and Mr James Hatt for NU for the intelligent care with which they conducted the trial and which they devoted to their written closing and oral submissions. I have adopted the text of such written submissions where convenient and appropriate. In so doing I have not expressly addressed herein each and every point advanced, confining myself to the matters of major significance whilst taking the other arguments into account. It is a matter of regret that the core bundle, in particular, had not been prepared to the same standard - it made the conduct of the trial less easy.
4. I set out my reasons below. The result is that Mr Lewis wins by reason of NU having failed to discharge the onus of proving that it was induced to enter into this policy on its terms by the non-disclosure. In other respects the various questions are answered in favour of NU with the exception of the question of negligence under Question 4 (below) which given that it is now at two removes from relevance it is not necessary to deal with.

Basic background

5. Mr Lewis is 52 years old. He says that currently suffers from faecal incontinence and lower back problems. He also says that he has not worked since 2002 and that there is little, if any, prospect of his working again.
6. In March 1999 when he was working as an electrician Mr Lewis started the process, with the help of an agent Austin Greene who traded as/was part of ASG Financial Management (who and which cannot now, I am told, be traced), of obtaining a NU PHI policy with a 13 week deferred period.
7. Various steps took place in that process some of which will need to be examined in detail and on 24 November NU wrote to Mr Lewis offering him cover on stated terms and subject to his completing 2 documents. Those documents were completed with the help of Mr Greene. No reference was made therein to a visit by Mr Lewis to his GP on 26 July "the Visit". Cover started on 1 January 2000.
8. The following part of the background is taken from Mr Lewis's closing submissions; I am not here to try quantum and NU stress that the matters in square brackets are not admitted. [In June 2001 Mr Lewis was diagnosed as suffering from faecal incontinence. The incontinence was caused by the division of Mr Lewis's sphincter muscle during a sphincterotomy in 1997. In October 2001 he suffered a lower back injury and strain to his left leg at work. He took some time off. On his return to work in November 2001 he had another injury to his back, which was later diagnosed as a tear to his lumbar disc. He suffers from continuing pain in his lower back and referred pain in his legs. Mr Lewis stopped working in May 2002 and was dismissed on the grounds of incapacity in June 2002. The combination of Mr Lewis' faecal incontinence and lower back injury render him incapable of carrying on his previous occupation as an electrician.]
9. On 14^th October 2002 Mr Lewis submitted a claim form to NU . After a good deal of internal to-ing and fro-ing at NU, to which detailed reference will also need to be made, on 14^th January 2003 NU wrote to Mr Lewis stating that his claim had been declined, principally on the ground of non-disclosure of the Visit, and his Policy was avoided.
10. This step was taken without first making any enquiry of Mr Lewis about the Visit. What other enquiries NU made at that time is partly a matter of speculation with which I will deal below.Thereafter Mr Lewis sought to challenge NU's decision. NU confirmed its decision to avoid the Policy.
11. Before bringing these proceedings Mr Lewis took his complaint to the Financial Ombudsman Service ("FOS"). Both the adjudicator and Ombudsman found that NU was not entitled to avoid the Policy. Sadly, however, the Ombudsman also found that Mr Lewis' medical condition was not such as entitled him to payment under the Policy. That was a matter which was not in dispute between Mr Lewis and NU, and had not been referred to the Ombudsman. It was outside his remit. Mr Lewis made a complaint about the Ombudsman's handling of the claim. His complaint was accepted, the Independent Assessor holding that the FOS had wrongly extended its investigation into matters which did not form part of Mr Lewis' dispute with NU. Mr Lewis was awarded £900 by way of redress. Unfortunately, however, the Independent Assessor had no power to direct the Ombudsman to reconsider Mr Lewis' complaint or to sever the decision.
12. The NU stood on its entitlement to require Mr Lewis to accept, or reject, the Ombudsman's decision on an "all or nothing" basis. Since neither availed him, Mr Lewis rejected it and he brought these proceedings. NU has never claimed that the alleged non-disclosure of which it complains was in any way intentional or dishonest. Nor does it assert that the medical conditions from which Mr Lewis suffers and which give rise to his claim under the Policy are in any way related to the matter which he now admittedly failed to disclose.
13. At the outset, given the material findings of the Ombudsman, and the Code of Practice under which NU avowedly operates, albeit (it is said and as I have held) voluntarily, I expressed the view that NU's decision appeared to be distasteful and it is right that I should put that statement by me on record. However, I said then and I stress now that that view was irrelevant to the preliminary issues before me in these proceedings and would form, and has formed, no part of and nor has it in any way influenced the decision-making process. What I have to decide are issues of fact and law without regard, unless the law requires it, to matters of "fairness".

The preliminary issues in full

14. They are now the following in their amended form:

With respect to Mr Lewis's visit to his GP on 26 July 1999 complaining of knee pain ("the Visit"):

(1) Was the fact of the Visit such as would influence the judgment of a prudent insurer in deciding whether to accept Mr Lewis's proposal for insurance or on what terms to accept it?

(2) If the answer to (1) is Yes, is it the case either:

(a) that the fact of the Visit was known or presumed to be known to NU? or

(b) that NU had waived Mr Lewis's obligation to disclose the fact of the visit?

(3) If the answer to (2) is No, would the fact of the Visit, if disclosed prior to inception of the policy, have induced NU not to accept Mr Lewis's proposal for insurance at all or to accept it on different terms from those actually offered to Mr Lewis?

(4) If the answers to (1) and (3) are Yes and the answer to (2) Is No, is NU entitled to avoid Mr Lewis's policy or does Mr Lewis's policy on its true construction incorporate the ABI Statement of General Insurance Practice and so far as is material the following:

"An insurer will not repudiate liability to indemnify a policyholder:

(i) on grounds of non-disclosure of a material fact which a policyholder could not reasonably be expected to have disclosed;

on grounds of misrepresentation unless it is a deliberate or negligent misrepresentation of a material fact;"

and if so is NU entitled to avoid the policy terms alleged in paragraph 10 and 11 of the Particulars of Claim?

The preliminary issues in turn, in summary, and the legal approach.

15. I deal with Question 1 - "materiality" – briefly. Each party had an underwriting expert; Mr Porter for Mr Lewis and Mr Rowlands for NU. They were agreed that the Visit was material. The test for materiality is not in dispute, and I only mention it because of the inter-relation with Question 3. It is an objective one, and is premised on what a hypothetical prudent underwriter would have done. I adopt the words of Lord Mustill in Pan Atlantic Insurance Co v Pine Top Insurance Co [1995] 1 AC 501 (HL) at 532, in the context of what a prospective insured and its broker have to consider namely

"whether the materials are such that a prudent underwriter would take them into account".

The effect on the prudent underwriter does not have to be decisive, merely an influence, something that would be taken into account.

16. The parties have, against that background, agreed that the answer to Question 1 is "Yes", and accordingly I need say no more about it and it is necessary to turn to Question 2.
17. Question 2, repeated, is:

is it the case either:

(a) that the fact of the Visit was known or presumed to be known to NU? or

(b) that NU had waived Mr Lewis's obligation to disclose the fact of the visit?

18. Again, the answer to 2(a) is agreed, this time as "No". For Mr Lewis it is accepted that there is no basis for actual or constructive knowledge of the Visit.
19. 2(b) is correctly described as the waiver question, and the answer centres on the documents sent to Mr Lewis under cover of a letter dated 24 November 1999 and the terms of the letter itself . This also is a question which requires an objective answer - what would the documents emanating from NU mean to a reasonable man in terms of what information was, and was not, required then to be disclosed. Plainly, and this is common ground, that question cannot be asked in a vacuum and accordingly it will be necessary to look at the progression of events leading to and surrounding those documents. As already stated, I decide this issue in favour of NU.
20. Question 3, which does therefore arise, is

(3) If the answer to (2) is No, would the fact of the Visit, if disclosed prior to inception of the policy, have induced NU not to accept Mr Lewis's proposal for insurance at all or to accept it on different terms from those actually offered to Mr Lewis?

21. This is accurately described as the inducement point and the answer centres on the information given by Mr Lewis on the documents sent to him on 24 November 1999 and the activity of the underwriters both at the time of inception and when the claim was made which both parties say is illuminating. I have also been asked to look at and have heard evidence about various guideline documents which are relied on by NU as showing their general practice at the time, from which I am invited to derive support for NU's case. NU also relies, but only by way of "back-up" on prudent underwriting practice.
22. It is common ground that this issue is not to do with what a hypothetical prudent underwriter would or would not have done. It focuses on the actual underwriter. The onus of proof is on the insurer.
23. In considering inducement, particularly against a background of the admission that the Visit, undisclosed, was material, I bear in mind the strictures of Lord Mustill in Pine Top [supra] at 551 namely as follows:

"As a matter of common sense however even where the underwriter is shown to have been careless in other respects the assured will have an uphill task in persuading the court that the withholding or misstatement of circumstances satisfying the test of materiality has made no difference. There is ample material both in the general law and in the specialist works on insurance to suggest that there is a presumption in favour of a causative effect. It is not necessary for present purposes to give the proposition this formal label, or to explore it in detail."

24. The Court of Appeal has given further guidance in Assicurazioni Generali v ARIG [2002] EWCA Civ 1642, [2003] 1 WLR 577, [2003] Lloyd's Rep IR 131. Clarke LJ discussed the position at [56]-[62], concluding (at [62]) as follows.

"In all the circumstances I would summarise the relevant principles of inducement in this context in this way:

1. In order to be entitled to avoid a contract of insurance or reinsurance, an insurer or reinsurer must prove on the balance of probabilities that he was induced to enter into the contract by a material non-disclosure or by a material misrepresentation.

2. There is no presumption of law that an insurer or reinsurer is induced to enter in the contract by a material non-disclosure or misrepresentation.

3. The facts may, however, be such that it is to be inferred that the particular insurer or reinsurer was so induced even in the absence from evidence from him.

4. In order to prove inducement the insurer or reinsurer must show that the non-disclosure or misrepresentation was an effective cause of his entering into the contract on the terms on which he did. He must therefore show at least that, but for the relevant non-disclosure or misrepresentation, he would not have entered into the contract on those terms. On the other hand, he does not have to show that it was the sole effective cause of his doing so."

25. An example of the way of the way this presumption works is given by Assicurazioni Generali itself, where Clarke LJ set out the relevant facts at [61]:

"Here, the evidence of the three underwriters who did give evidence and of the expert witnesses was clear. If the underwriters had been told the true state of the ground conditions, as revealed by the 1982 report, and of the conflicting views expressed by the authors of that report and by Worleys, then they would have called for further information and in all probability either refused the risk or accepted it on different terms. In fact, all four underwriters including Mr Earnshaw accepted it without any relevant enquiries. There is no evidence to displace a presumption that Mr Earnshaw like the other three was induced by the non-disclosure or misrepresentation to give cover on the terms on which he did. In my judgment, these insurers also have discharged their burden of proof."

[Emphasis added by me]

26. A further example of the evidential presumption was cited and relied on by NU in its opening submissions; it is now said by NU that since I have heard and seen actual evidence relating to this policy and this insurer, the case should not be decided on the footing of any evidential presumption (although, as it was to turn out, the sole lay witness fielded by NU, Natalie Humphreys, put forward expressly as the underwriter, turned out to the apparent surprise of NU's legal team as much as anyone else's, not to have been involved in the underwriting process at any time after 17 November 1999, which ante-dates the alleged inducement). The underwriter who was induced, if at all, by the receipt of the documents was not her but rather one Debbie Ford from whom nothing has been heard for wholly unexplained reasons. For Mr Lewis I am invited to infer that enquiries were made and the answers were adverse to NU's case, although it is accepted that I am not bound to. On NU's case no enquiries were made even of Ms Humphreys until October 2007. However, the marked passage shows, and this is also common ground, that if I find that further enquiries would have been made (where I need, it is common ground, to consider what Debbie Ford would have done) then I must consider what, as a matter of probability, the outcome of those enquiries would have been and what the underwriter(s) (not necessarily Ms Ford) would have done. Given the absence, for whatever reason, of any live evidence from any underwriter (including Ms Ford, who continued to work for NU until 2005, long after this claim was intimated, and Mr Parker) I regard it as necessary to be cautious, at least, before drawing inferences in NU's favour.
27. Question 4, does not therefore arise, but it is (in precis):

If Mr Lewis loses under general insurance law principles, did the policy incorporate the ABI Statement of General Insurance Practice and if so whether NU was entitled to avoid the policy

This is principally a matter of construction. It is accepted by NU that such terms could be incorporated by agreement but NU say they were not. For Mr Lewis it is contended that they were. If they were, there was a subsidiary issue whether the fact representing the admitted non-disclosure was one which Mr Lewis could not reasonably be expected to have disclosed or whether, if it amounted to misrepresentation it was negligent (there being no suggestion that it was deliberate). I will clear this out of the way briefly as it does not arise on the basis of my primary conclusions. For Mr Lewis it was contended in closing simply that

i) it is admitted that the Policy was one to which the ABI Statement applied. That is correct.

ii) The Policy stated that Mr Lewis could "approach the ABI" if he had cause for complaint

iii) It would be a "nonsense" if NU "were free to disregard the terms of the of the ABI Statement"

28. For NU, it was contended that

i) there is no mention in the Policy of the ABI Statement, and the Policy is defined in a way which makes no reference thereto. That is correct

ii) The Policy does say that a person can approach the Ombudsman/ABI if they have cause for complaint in respect of any falling short of high standards on the part of NU

iii) These rights arise outside of the Policy and do not give rise to a binding obligation on NU

iv) there were various other points which appear no longer be material, save that I am told by Counsel for NU that the ABI statement has now been replaced by another which does have the force of law

29. In my judgment, the argument for Mr Lewis is wrong. There is no basis on which it can be said that the Statement was incorporated in the Policy. Further, and in the absence of actual incorporation, there is respectable legal writing to the effect that such statements of practice do not have the force of law and cannot be sued on by policyholders, and NU cite MacGillivray on Insurance Law (10^th edn) at 17-104 and Modern Law of Insurance, McGee (2^nd edn) at 5.48. That is not to say that the Statement is irrelevant. It is a matter which comes within the Ombudsman's remit and indeed, but for the unfortunate out-turn, that would have afforded Mr Lewis his remedy under the Statement.
30. Accordingly, and because it is now doubly-irrelevant I do not deal with the last sub-issue (and indeed I am not invited to).

Facts leading to inception

31. I now turn to the detailed circumstances giving rise to the issues up to the point where the policy came on risk and the following are, where the matters were in dispute, my findings of fact.
32. On 15^th March 1999 and with the assistance of his financial advisor, Austin Greene (no doubt this person was in fact remunerated by NU commissions but it is common ground that he acted as Mr Lewis's agent for all relevant purposes), Mr Lewis submitted a proposal form to NU for a Safeguard Income Protection insurance policy. In the proposal form – filled in by Mr Greene at Mr Lewis's home - Mr Lewis disclosed amongst other things that (i) he suffered from Irritable Bowel Syndrome ("IBS") which caused diarrhoea and (ii) he had undergone operations for varicose veins and on his "backside" (a sphincterotomy). Reliance is placed both by NU and Mr Lewis on the terms of this document and in particular the specific questions asked, in respect of the waiver issue.
33. On receipt of the completed form, NU sent a Private Medical Attendant's Report (PMAR) form to Mr Lewis' G.P. NU sought, in particular, full details of Mr Lewis's varicose veins and diarrhoea. Reliance is placed both by NU and Mr Lewis on the terms of this document and in particular Section 7 (which speaks of "significant" illnesses etc and expressly disavows interest in "trivia") in respect of the waiver issue. This report was completed by Mr Lewis's GP, Dr Webster, on 12^th April 1999. Dr Webster noted that Mr Lewis had suffered from neck pain in 1997 (not disclosed by Mr Lewis in his application form) and had been referred to an allergy clinic to see whether his gastro-intestinal symptoms were allergy related.
34. On 19^th April 1999 NU sent Mr Lewis a Medical Questionnaire in relation to neck pain, which had been identified by Dr Webster in the PMAR. Considerable reliance is placed by NU on its reaction to knowledge of the neck pain in support of its case on inducement (although it is material that it was the reaction of Ms Humphreys and not Ms Ford – on the evidence of the former, and the logs, both the sending of the MQ about the neck, and the November decision to exclude the cervical spine). On 23^rd May Mrs Lewis completed that Questionnaire for and with her husband. He set out that he had the symptoms every day when he woke in the mornings and had had neck pain since 2 years previously. NU also required Mr Lewis to undergo a medical examination by an independent examiner, Dr Shah. NU instructed Dr Shah "specifically" to comment on Mr Lewis's neck pain and on the forthcoming allergy tests referred to by Dr Webster, and Mr Lewis was examined by Dr Shah on 25^th May 1999 . Dr Shah undertook a physical examination (on the neck and in other respects as set out on the form), and reported that Mr Lewis was "average" out of a choice between "average" "under average" and "uninsurable." In relation to the allergy tests, Dr Shah recorded that Mr Lewis had an appointment later that same day. Neck movements were reported as "all...painfree", "Complains of neck stiffness in the morning. Neck movements are normal painfree"
35. On 4^th June 1999 NU wrote to Mr Lewis enquiring about the result of his allergy test. There appears to have been other contact between NU and Austin Greene.

It appears from the NU logs that Mr Lewis spoke to NU on 20^th July about the test results, NU tried to contact the GP and Mr Lewis rang again on 22^nd July. On Monday 26^th July 1999 Mr Lewis visited his GP. It is this visit which NU relies upon as entitling it to avoid the Policy.

36. There was some challenge to Mr Lewis's account relating to this but taking into account the actual entries in the GP's notes (set out in reverse date order), other documents relating to accounting, a subsequent letter from the GP and Mr Lewis's evidence which on this point I accept, I find that the reason for the Visit was to obtain confirmation from his GP for his accountant of the periods when he had been unable to work following his varicose vein and sphincterotomy operations. The GP record matches this. There is then a second entry dealing with Mr Lewis' knee and a request for a nasal spray. I accept and find that Mr Lewis had made the appointment the previous week (26^th July being a Monday) and that, once there, he mentioned in passing that over the weekend he had experienced pain in his left knee (he said he did not use the word "joint" and I accept that) which felt as if it might lock but never did.
37. The GP examined the knee, and said there was nothing wrong with it (the record shows "nothing abnormal detected"), that Mr Lewis should try over-the -counter Ibuprofen and if it did not settle he should see the practice nurse. He was advised to avoid excess exercise - all very anodyne. I also find that, as Mr Lewis said (and there is nothing to gainsay this) that he did not need to buy or take Ibuprofen, did not see the practice nurse and had no recurrence of the discomfort.
38. The only pause I had over this was the reference "1/52" in the GP note. It was put to Mr Lewis that this showed that he had reported having had, and had indeed had, pain for a week (and hence, implicitly, that this was the reason for the Visit, or at any rate that the knee pain was not as transient/minor as he was claiming). I have given thought to that, and come to the conclusion that the note does not require me to disbelieve Mr Lewis in this point. It could mean "within the last week", "less than a week", it could have been an error but whatever it meant, and taking due account of the probable contemporaneity of the typed record, I accept what Mr Lewis said. And I do so against a background where in other instances I am conscious that I found his evidence less impressive.
39. On 27^th August 1999 Mr Lewis rang NU and informed it of the results of the allergy test. The results indicated, he said, that he was allergic to wheat and dairy products. One of NU's underwriters (not Ms Humphreys – she is "IPNYH" on the NU system, and this was "IPSZH") spoke to Mr Laskey, the Senior Underwriter, who directed that written confirmation of the tests results should be obtained from Mr Lewis' GP. It seems that nothing happened on this before NU were prompted to act by a call from Mr Greene recorded in the NU log on 7^th October – nothing in the interim is recorded.
40. On 9^th October 1999 NU wrote to Dr Shah (the independent examiner) requesting the results of the allergy test. It seems that NU had mistakenly thought that Dr Shah was the GP and that letter was returned stating that Mr Lewis was "no longer registered with that practice". On 23^rd October 1999 NU wrote to Mr Lewis's actual GP practice, Island Health, and on 29^th October they wrote back stating they were unable to divulge medical information without an authorized consent form. NU then sent a consent form and on 12^th November 1999 the practice said that it could find no records of the results of the allergy tests.
41. Ms Humphreys then made a provisional decision to under-write Mr Lewis' application on 17^th November without seeing the allergy test results. NU were undoubtedly by then concerned about the 8 month delay in processing Mr Lewis' application. The underwriting notes for that date state:

"discussed [with] JL [Jonathan Laskey, senior underwriter] - too much time elapsed now [therefore] will issue terms [with] +50% for weight / IBS/ allergy to wheat etc + cervical spine [exclusion] with [Declaration of Health] for completion re results of allergy testing."

and the underwriting decision sheet states:

"issue DOH, & med Q, with [acceptance letter] & advise this must be completed in respect of allergy testing & IBS (use date of app for DOH)."

[the words "and med Q" have plainly been added after "DoH" by way of insertion]

42. Mr Lewis' application file (including the underwriting notes and the underwriting decision sheet) was then passed to administration. The administration department prepared a letter to Mr Lewis which was based on the underwriting notes and decision sheet. The letter (and this is the "waiver" letter) was dated 24^th November 1999 and stated:

"Please find enclosed acceptance terms which are subject to the completion of the declaration of health and the medical questionnaire in respect of allergy testing and IBS."

43. The acceptance terms (£808/m or £1,000/m) stated that special terms were being applied, namely a Medical Loading and a Medical Exclusion (relating to the Cervical Spine).
44. When he received NU's letter and enclosures, Mr Lewis contacted his financial adviser, Mr Greene. Mr Lewis forwarded the original documents to Mr Greene, keeping copies for himself, the two then spoke over the telephone and Mr Greene completed the declaration of health and the medical questionnaire and returned them to Mr Lewis for signature. There was no mention of the Visit or anything about his left knee.
45. There was considerable cross-examination on this, but the case advanced for Mr Lewis on his reason for not mentioning the Visit was, principally, innocent oversight. That was his pleaded position. In evidence, he started to say that he understood that the purpose of the documents was to determine information solely about IBS/allergy testing. That evidence was not credible. However, he is a man who, certainly by now and probably for a long time, has been fixated by the perceived injustice of his position, and that passage of his evidence was, in my judgment, a manifestation of that fixation and not a pointer to general or overall unreliability. He did accept in the end/revert to the fact that had he been asked shortly after the Visit, or had the Visit occurred shortly before the original application, he would have realised that it should be mentioned and it would have been. He had just forgotten. I accept his evidence that that he would have referred to it had he not forgotten.
46. I should add that there was reference in the pleadings to some perceived association between the knee pain and varicose veins, and Mr Lewis was cross-examined on various post-event letters written on his behalf. It was not clear what the purpose of such cross-examination was, save as to credit (and possibly to show that perhaps NU/the Ombudsman had grounds for being suspicious of Mr Lewis and that therefore so should I). I allowed it to continue probably more than I should; I derived no assistance from it and I note that no reliance is placed on it in NU's closing submissions.
47. The completed DoH and MQ were returned to NU and received by NU on 10^th December. The DoH and MQ were considered by Ms Debbie Ford who was, it is now accepted by NU the actual underwriter at that stage, although NU continue to describe Ms Humphreys as a "competent witness in her own right". The fact is that the person who was, or who was not, induced at that stage was Ms Ford and the pleaded case that the underwriter who was induced (and would have done X or Y) was Ms Humphreys is just plain wrong.
48. There were entries in the DoH about things other than IBS or previously-known matters. Ms Ford did not make any enquiries about the "course of injections" referred to in the DoH. Nor did Ms Ford chase the allergy test results which remained outstanding and which the Senior Underwriter had expressly stated should be obtained in writing. [Ms Humphreys stated in evidence that Ms Ford adopted a different approach to that which she would have adopted. I return that below]. Be that as it may, it is an additional fact that neither of them applied any form of general exclusion relating to ano-rectal problems, a risk consideration which NU's expert described as "fundamental". The Policy was then set up to come on risk on 1^st January 2000, and a copy of the "Safeguard Policy Wording" was sent to Mr Lewis.

Question 2(b) – waiver.

49. The case put forward for Mr Lewis had several primary strands (it may be that not all survived to closing but I deal with them all in any event):

i) that the requirement to disclose must be read against what was required of Mr Lewis initially

ii) that it was limited by reason of the limitations set out in the disclosure sought of the GP (no trivia etc)

iii) that the covering letter was at best ambiguous and at worst expressly limited the required disclosure to IBS/allergy testing

iv) in closing, that the factual matrix shows that the only matter of concern to NU was the outstanding IBS/allergy testing issue.

50. I reject each of the contentions advanced for Mr Lewis.

i) there is no basis for the suggestion that the original disclosure required was limited so that it would have excluded the Visit. Read as a whole the application did clearly require such disclosure. In any event, a different document sent many months later in a different context is a far remove from that sent in March and does not materially assist me.

ii) what was sought from the GP is not relevant to this point. Mr Lewis never saw that document, and it is different in kind from the application form (and the material DoH).

iii) there is room for suggesting that the covering letter of 24 November was, taken on its own, not as clear as it should have been. I was invited to say it was ambiguous because of the internal instructions as to its drafting; I decline to do so for that reason: but objectively it was ambiguous (and for what it is worth it was accepted by Ms Humphreys that it was not well-drafted). The ambiguity relates to whether the relevant phrase should be read disjunctively or conjunctively. However, it is not as clearly misleading as is contended, and it does not stand on its own. The enclosures clearly require

a) as to the MQ, information about a specific medical condition – in this case and from the letter plainly IBS/allergy testing

b) as to the DoH, general information to bring the NU up to date on all stated matters since 15 March 1999 – the date of the original application.

51. It is submitted that the letter overrides the "standard" forms. I do not accept that. Taking the forms together with the letter, it becomes objectively clear that ambiguity in the letter is to be resolved such that the DoH is required "generally" and the MQ specifically as to IBS/allergy testing.
52. I draw some, but only a little, support, from the fact that it is also clear from the answers to the DoH that Mr Greene was under no misapprehension as to the general nature of the enquiries posed in the DoH. This being a matter of objective judgment, the mere fact that Mr Greene understood the forms is not determinative. I cannot say what Mr Lewis would have made of them himself unaided: as demonstrated by NU at the start of his cross-examination, he is not a man who has had the need for, or acquired, high-level reading skills. He himself relies solely on forgetfulness: the waiver point is a purely legal one
53. In arriving at this conclusion I have adopted the test of what a reasonable man would have made of the documents: not perhaps Mr Lewis unaided, given his limited skills, probably not me personally given my legal experience, just an objective test based on a reasonably careful reading of the documents, and every part of them, by a reasonable man knowing that they were formal documents relating to insurance.
54. I come to this conclusion with regret only to the extent that it is unfortunate that large and supposedly competent insurance companies should send bespoke and important letters which are not crystal clear on a free-standing basis. However, that regret is assuaged in the particular case by the knowledge that Mr Lewis's adviser was in no way misled and that any unclarity was of no causative effect.

Question 3 – Inducement

55. I turn to the last live issue.
56. NU's case as pleaded was, in its Defence and amended Defence, a general one: in a passage in paragraph 15, otherwise about materiality, that the non-disclosure "induced NU into entering into the policy" In an earlier paragraph (14), reliance is placed on a letter from NU dated 14^th January 2003 as the reason for avoidance on the grounds of non-disclosure of a material fact. The Defence is dated 18 September 2007, the amended Defence 9^th October 2008 but the material passages remained the same.
57. In the meantime a Part 18 request was served about the paragraph 15 assertion. It is undated but was answered on 8^th May 2008. In it there were 3 answers

i) that the actual underwriter was Natalie Humphreys

ii) that had disclosure been made, the original acceptance terms would have been withdrawn and NU would have undertaken further enquiries regarding the Visit. "Further details will be supplied within the witness statement of Natalie Humphreys" [I infer from this that although the first version of the witness statement of Ms Humphreys, dated 16 January 2008, was in existence it had not then been served]

iii) on the assumption that there would have been further enquiries: what and of whom, what the results would have been, what the Defendant would have done. Answer: "These are matters that will be addressed in the witness statement of Natalie Humphreys".

58. Before turning to the avoidance circumstances, I remind myself that Ms Humphreys was not asked anything until late 2007 and had had nothing at all to do with it after 17 November 1999. Moreover, in cross-examination she expressly disavowed each and every answer in NU's Pt 18 answer. Not a word has been said by NU one way or the other to explain the absence of any information or evidence from Ms Ford despite her being at NU until 2005, long after this dispute arose. And even if she was in some senses to be treated as some sort of "provisional" underwriter, not only did NU not ask Ms Humphreys anything before avoiding (or before setting out their case(s) from January 2003), they did not contact Mr Lewis – which whether actually bad practice or not was certainly regrettable and unhelpful.
59. Technically, the particularisation of NU's pleaded case is therefore limited to the reference to the letter of 14^th January 2003 (save that it contradicts the Part 18 Answers). Materially that letter says this

"the medical records have shown that there is non-disclosure of material facts, the most significant being a consultation with knee joint pain between 15 March 1999 and 6 December 1999. Your medical notes have been referred to our Underwriters and they have confirmed that, had they been aware of this consultation, they would have conducted further enquiries at that time and possibly a knee exclusion would have been applied."

60. Accordingly the formal, particularised, position is that NU say that "they would have conducted further enquiries at that time and possibly a knee exclusion would have been applied." It turns out that this letter is a part-quotation of a document internal to NU at the time of avoidance to which I refer below. The formal position also, probably included whatever was in the statement of Ms Humphreys as to questions 2 and 3, but her oral evidence contradicted the "ask more" line of attack and even her witness statement(s), contained mutually-inconsistent averments at paragraph 20 (further MQ, which she was to abandon) and paragraph 28 (would have excluded knee from cover without more, which was contradicted by her witness statement of 4^th December 2008, stating that the policy would not have been granted at all).
61. Were it not for the fact that it is accepted between the parties that the effect of Assicurazioni Generali v ARIG (above) at [62] is that the insurer does not need to show what precisely it would have done, merely that it would have done something different, that alone might have put an end to NU proving its case but I am not invited to deal with the matter on that limited basis. At its highest, NU now says "no cover at all, without more, full stop" – which is precisely what even the Chief Underwriter did NOT say at the time. And it was not always what Ms Humphreys was to say in the witness box – she was not consistent even then.
62. The opening for NU was bold and simple: the most important evidence is that from the actual underwriter: Ms Humphreys [wrong], and she says at paragraph 28 that the knee would have been excluded from cover. That written opening pre-dated the final statement from Ms Humphreys by 2 days: in that she said "no cover at all" because, it was stated for the first time, of NU rules/practice of having a "two exclusions and out" regime. So both aspects of the most important evidence even on this position had altered.
63. In seeing whether NU has discharged the burden of proving its case (at its widest, in the general bare assertion at paragraph 15 of the amended Defence) I have considered

i) direct evidence from the actual underwriter. There is none save to the limited, if any, extent that Natalie Humphreys can be described as such

ii) Ms Humphrey's evidence so far as it assists generally and as to general practice

iii) documentary evidence at the time and other correspondence since

iv) other material that lends some reliable support

v) supportive material such as what the experts said

vi) the overall picture in the round

The sequence of events from the claim onwards

64. The circumstances of avoidance were these. Although the sequence of events is now challenged for NU in closing submissions, Natalie Humphreys was asked about the sequence. She knows her way around the NU type of documents, and the following is her explanation of the sequence of events and it fits the various different documents involved. Unlike the correspondence relied on by NU, notice of the alleged sequence of events, from the documents, was expressly given for Mr Lewis before the trial started.
65. After earlier and informal intimation of a claim, on 14^th October 2002 Mr Lewis submitted a claim form to NU stating that he was incapacitated by way of: (1) ligament and tendon damage in his left leg and back, (2) deficiency of the internal anal sphincter, (3) numbness and sharp pain to left leg and back and (4) the development of passive episodes of incontinence which occurred every day. In the ordinary course of its processes of checking for non-disclosure, NU obtained a copy of Mr Lewis' medical notes, which a claims handler then carefully reviewed on 23^rd December 2002. A list of significant entries in Mr Lewis' GP records was prepared.
66. In that list the claims handler clearly included "knee pain" as at July 1999. The claims handler then referred the matter to the underwriting department. The Chief Underwriter, Mr Parker, reviewed Mr Lewis' medical records (and not just the list of entries prepared by the claims handler: that much is plain from the detail recorded which is not on the claims handler's basic list). Mr Parker noted those matters that were regarded as significant – and there were some, including non-disclosure of matters relating to stress which, the note shows, would "at worst" have led to a medical loading of 100% . He made no reference to the visit in July 1999. It may be that he did not believe that the Visit, in context and given the non-recurrence of any such report, was significant. If that were an incorrect inference, no blame could be laid at Mr Lewis's door. No explanation has been tendered by NU for not calling anyone (apart from Ms Humphreys whom they must have known by then had had no direct dealings at the avoidance stage) to speak to these documents directly. The inference is supported somewhat (in the sense that an event in July 1999 must always have been relevant for a policy starting in January 2000 where the application started in March 1999) by the fact that although the initial application was made in March 1999, and the policy came on stream in January 2000, Ms Humphrey's evidence was that a further DoH would always be required if there had passed more than one month since the DoH accompanying the original application.
67. It is partly for that additional reason that I am not persuaded by the alternative construction which NU in closing seek to place on these documents namely that somehow both the Chief Underwriter and the CMO were initially looking only for non-disclosure re the first form (March) but only later realised that the cover came on risk some time after March so only then did Mr Parker look at the "subsequent" medical records – the word relied on. It could equally be said in context that it is merely descriptive of an entry between application and inception, followed by a reference to "his DoH" – the existence of which is not marked as a new consideration. The documents being looked at by the Chief Underwriter on this first occasion plainly show the application date of 15 March 1999, the inception date of 1 January 2000 and a knee pain entry for July 1999. Ms Humphreys spoke to the documents and as best she could and did not dissent from, or she agreed with, the sequence put. Anything else is speculation which is insufficiently persuasive and without proper evidential foundation. However, and although I have dealt with it because it forms part of the rival submissions, it is not central or even particularly material to the resolution of the dispute. Its relevance is as to whether Mr Parker really would have caused further enquiries to be made. I should add that these observations apply equally to Mr Parker's not saying "non-disclosure" down to paragraph 72 below
68. On 31^st December 1999 Mr Parker wrote internally: "although there is non-disclosure, do not feel would have affected terms". In accordance with NU's claims handling procedures, that would ordinarily have been the end of any non-disclosure issue, and the matter should have proceeded to an assessment of Mr Lewis' entitlement to be paid under the Policy (5/E402).
69. Taking that next step, the claims handler then referred the matter to the CMO. The specific issue the CMO was asked to address was whether or not Mr Lewis met the eligibility criteria in the Policy: "Do you feel we should instruct IME [Independent Medical Examination]. Would you say that taken together PH [policy holder] would be TI [totally incapacitated]".
70. The CMO reviewed Mr Lewis' medical records. For some reason which has not been explained, the CMO took it upon himself to go beyond the scope of what he had been asked to consider, and raised the issue of non-disclosure by Mr Lewis. He identified 4 possible areas of non-disclosure. None of those related to the knee. Again, one has to ask why not: everyone knew or may sensibly be taken to have known of the relevant dates.
71. In the light of the CMO's comments, the matter was referred back to Mr Parker, with a request that the decision be reviewed. On 3^rd January 2003 Mr Parker reviewed the matter and spoke to the CMO. Mr Parker confirmed that the original decision stood, i.e. that any non-disclosure would not have affected the terms offered to Mr Lewis.
72. Ordinarily the matter would not have had this second step, but it would in any event have rested there. However, on 9^th January 2003 the claims handler had a discussion with Mr Parker and the CMO (CB/F135). This was the third occasion on which Mr Parker had considered the issue of non-disclosure For the first time express reference was made to the entry regarding the knee in Mr Lewis' medical notes. The internal documents of that date record:

"Discussed with Hugh [CMO] and Jon Parker. PH negligently disclosed (sic) material facts the most significant being between app and DoH – knee pain. This would have resulted in further enquires and possibly an exclusion

[pausing there, that much was paraphrased in the pleaded letter of 14 January 2003]

There are various other incidents pre-app and also between app and DoH which should have been mentioned. Avoid policy and refund premiums.

[this part was not in that letter]

and (this by Mr Parker himself)

He referred to his GP...regarding his knee ... where he was prescribed Ibuprofen [not entirely accurate] and advised re exercise. Given that he was in manual work this was a material fact and would have necessitated further enquiries – at least a medical examination. The results of the examination may have necessitated a knee exclusion – reviewable after2 years.

73. It is submitted for Mr Lewis that it must be the case that the true reason why NU decided to avoid the Policy was the "other incidents" referred to above, for on the basis of Mr Parker's position that disclosure of the knee pain "may/possibly" have affected the terms offered to Mr Lewis, NU had no justification for avoiding the policy on that ground. Therefore (if it believed it had any justification for avoiding the policy) NU must have been relying on the "other incidents" as giving it such a justification. Additionally, it is said, the claims handler's note expresses the view that Mr Lewis' non-disclosure of his knee pain was a negligent failure to disclose. In accordance with NU's internal documents, a negligent failure to disclose should not have led to the Policy being avoided. Therefore either NU was ignoring its own procedures, or it was avoiding the Policy due to some other perceived non-disclosure.
74. I am not persuaded as to the second of these – it was never made sufficiently clear to me where "negligence" fitted the "avoidance flowchart" on which Mr Lewis placed reliance. As to the first, I am left with the feeling that NU did indeed avoid the policy by taking what it perceived to be the whole picture into account. That said, NU can still succeed if it shows that the knee non-disclosure taken alone would, on a balance of probability, have affected the terms. However if, as it is, the fight is taken on a narrow basis, I can only decide it on that narrow basis.
75. Finally, and as stated, the letter of 14^th January 2003 was sent, NU's position being:

"they would have conducted further enquiries at that time and possibly a knee exclusion would have been applied."

Evidence generally

76. Now, Ms Humphreys' evidence. I have dealt with the basic changes of position above. She said she would have wanted to know about the allergy test results. It is plain that Debbie Ford, the actual underwriter, did not. She said she would have sought information about the course of injections referred to in the Nov/Dec DoH. Debbie Ford did not. She accepted that her view, "usually" (that was her initial position) to exclude for joint pain was different from that of the Chief Underwriter expressed internally and externally in January 2003. She also said that she would have excluded the knee automatically whether or not the knee was the principal reason for the Visit (contrary to paragraph 20, and quite contrary to the NU position at the time of avoidance). When asked, given that she said she would exclude the knee from cover anyway, why she (had she been the underwriter) had said she would have made further enquiries, her response was that the out-turn may have been that the answers would cause her to decline cover altogether. She had no answer to the point that by then she was saying that there would have been no cover in any event due to the "two and out" policy. She accepted, with some reluctance, that her evidence reflected a more rigorous approach than that of others within NU - materially that includes Ms Ford and Mr Parker. Contrary to the submissions for NU, I do regard it as material, as it affects the relevance and probative value of her own opinion in relation to what Debbie Ford would have done (and indeed as to the relevance of the "general practice" to that question). Lastly, she was faced with the firm criticism (of her and Ms Ford) by NU's expert Mr Rowlands that a failure altogether to exclude ano-rectal problems was absolutely not prudent, it being "fundamental".
77. I found her evidence unimpressive and unhelpful to NU's case.
78. In support of her evidence, and generally, reliance was placed on general practice within NU, first on the LUIS guidelines promulgated to NU by its re-insurer ERC Frankona. The evidence relating to the use of these documents was unsatisfactory. There is a book, seemingly about 1,000 pages long, with a 26-page index containing perhaps some 70 medical conditions on each page. In order to look for the guidance on "knee", the underwriter needs to make some form of medical diagnosis assumption, be it soft tissue rheumatism, bursitis or whatever. Even if Ms Ford had looked for, and found, the passage in LUIS relied on under the former – the one relied on by NU in this case, there is no statement that exclusion is the recommended outcome even for "successfully treated, full recovery" – just a loading of 50%.
79. Even given the fact of Mr Lewis having a manual occupation, and the general LUIS guidance that ratings should be increased for non-sedentary occupations, Ms Humphreys accepted that her paragraph 28 was not supported by LUIS. And it is an assumption only that "knee joint pain" (with or without a suggestion of Ibuprofen) is soft tissue rheumatism. The worst case on LUIS per se namely present condition, severe, time off more than 4 weeks, is "refer to CMO usually exclude". The basic approach of LUIS was, in addition, to obtain a clear understanding of the problem rather than exclude.
80. A guidance document which does state that where it is soft tissue rheumatism there should always be an exclusion in manual occupations was not, she expressly confirmed, the version in existence as at 1999. It appears, as a matter of logic, also not to have been the general policy at the time, indeed as at the end of 2002, if Ms Humphreys was right about this being soft tissue rheumatism, assuming that Mr Parker was a reasonably prudent underwriter acting in accordance with NU guidelines as Ms Humphreys understood them.
81. Reliance was also placed on certain other guidelines about "knee trouble" said to have been in existence in 1999. They do state, as shown in the bundle and as expressly spoken to by Ms Humphreys, that "knee trouble" is to be likened to "back disorders" where in general for manual occupations NU would tend to exclusion rather than loading. Those documents themselves did not exist at all in 1999 – they are said to have come into existence in 2000; the best Ms Humphreys could do was to say that guidance of that type was in existence in informal terms in 1999. Her evidence on the form and content of whatever material the underwriters had at the relevant time was unclear, and she was unable to say what they said. Eventually she said that she could not say anything about what the "informal", pre-2000 guidance said about "knee trouble".
82. I formed the clear view that here, as elsewhere, Ms Humphreys had been "overproofed". It is right to record that in re-examination she gave evidence that her "understanding" was that in 1999 knees were excluded from cover for manual occupations where the condition had been extant within the preceding year; it was a general answer, the source of that understanding was not clear, and the trouble with re-examination is that if it contradicts what is said in cross-examination then one is left with nothing reliable. Or it was new evidence not derived from anything particularised in her witness statement (which is thus inherently unsatisfactory), and given all the material which is inconsistent with it, either this was not the supposedly general practice or it was not generally applied.
83. Before leaving NU's evidence I should refer to the expert Mr Rowlands. As stated, he considered the ano-rectal matter a basic underwriting error. He would have excluded the knee on the basis of the GP visit alone and without more and, if NU took a different view, that too was imprudent. He was unaware of the "two and out" policy", and wrote his report on the footing that use or at least consideration of the LUIS material was compulsory for NU, which it was not. He said that he would not expect an underwriter to go through the index of LUIS – they would be expected to work out the probable cause of the symptom and look up that cause if required. His answer to the basis of the LUIS entry relied on being "successfully treated" where there was no treatment required was that rest can be treatment. He accepted that in a number of respects NU had not acted like prudent underwriters, and, finally, that he was unable to say what NU would have done had the Visit been disclosed.
84. In support of its case on what it would have done – making enquiries this time – heavy reliance is placed by NU on its reaction (Ms Humphreys' reaction) to the daily neck discomfort: MQ and despite the report of painfree and unrestricted movement, the exclusion of the neck. Mr Porter, expert for Mr Lewis, was criticised for drawing a distinction between the neck and the knee solely on the basis of the currency and duration (2 years) of the neck problem. Mr Porter's further view was that if an MQ had been sought then if the answer was in accordance with Mr Lewis's evidence he would have left the terms as they were. He did not consider that what was revealed by the notes necessarily fell within the LUIS index entry relied on, nor that trivial knee pain would necessarily be there at all – commonsense needed to be applied. He was unaware (and he was not alone) that NU had a practice of time-limited exclusions. He accepted that both Ms Humphreys and Mr Rowlands would have excluded the knee altogether, and he also accepted that he disagreed with certain statements made on behalf of NU in later correspondence. It was put to him that he stood alone as being the only person who did not support exclusion: his answer was that with the exception of Mr Rowlands, everyone else worked for NU (which in the case of Ms Humphreys was true until some time in early 2008, after her first, and principal, statement was signed). Finally, it was put to him that any competent underwriter would have excluded the knee, and his answer was that it was not guaranteed – he would not have done. For NU, reliance is placed on that answer but only the first part. It is now accepted by Counsel for NU that the answer included the second part; once it does then it does not have the force for which NU contend. I am asked to place little/no reliance on Mr Porter for the reason (additional to the part-quoted "not guaranteed" answer) that he did not work for NU, and hence his evidence is not directly relevant to what NU would have done. That is a curious criticism generally, and where both experts, neither of whom worked for NU, were asked to opine but to the extent that it is valid it cuts both ways.
85. Although I think it was possible that Mr Porter did entertain some personal sympathy for Mr Lewis's position, I did not form the view that his evidence had been tainted by it. Overall I accept his evidence.

Correspondence

86. I now deal with the correspondence relied on by NU in closing. I start by accepting the submission for Mr Lewis that trawling through letters and choosing parts of some of them, some with quite anonymous sources, after the event is no substitute for adducing live evidence or at the very least the service of Civil Evidence Act notices. Even with the more relaxed modern regime there is a limit, and I bear also in mind that much of this material is bound to be self-serving. NU rely on paragraph 3.9(ii) of PD39 and assert that there was implicit agreement thereunder. I will treat this material as technically admissible, but unless it is "against interest" I attach very little weight to it.
87. The statements and letters are listed at NU's closing thus:

i) 24^th June 2005, Mr Laskey (senior underwriter) "filtered through Pat Cowley, the claims consultant dealing with the FOS, which probably explains why it is expressed in terms of a prudent underwriter rather than D itself". This e-mail says

"..decision unchanged to that given on 9/1/03 [Mr Parker, set out above]...would have led a prudent underwriter to exclude the knee"

That may be, but the opinion said to be expressed and re-adopted is not "exclude the knee" and, apart from the differences of opinion as to what a prudent underwriter would have done, "prudent underwriter" is not the test. NU's attempt in closing to use this note to prove that what Mr Parker really meant in January 2003 was that cover would have been affected is not one I am prepared to accept on the basis of this material by way of untested inference.

ii) In a letter dated 26 July 2006 in the context of correspondence between the parties' solicitors the following words are in quotation marks, indicating (it is said) that they are taken from NU's underwriting department:

"Taking into account the manual nature of Mr Lewis's occupation as a commercial and domestic electrician and the recent nature of this consultation in relation to the commencement date 01/01/2000, the Underwriter felt that had Mr Lewis disclosed this, full details would have been obtained to assess the severity and exact status of the condition and at minimum an exclusion of the left knee applied. A review of this exclusion would have been offered after 2 years."

This is, I find, once again a re-writing of what was actually recorded. There is no clue as to who the Underwriter is. If it was Mr Parker, he is simply contradicting what is recorded for and by him at the time, and without this being tested I attach no weight to it.

88. I am then invited to infer that NU underwriters (not even named, and this is inference alone) provided the basis for the following statements.

i) 11 February 2003 in a letter to Mr Lewis:

"our underwriting department would have conducted further enquiries at that time and terms would have been affected" . Again, a gloss on/alteration of what recorded.

ii) 30 July 2003, a letter to Mr Lewis's solicitors:

"Given that Mr Lewis was in a manual occupation, our Underwriters felt the non-disclosure of this material fact was significant and would have affected the offer of a policy" . See above (and in addition, the footnote for NU referring me to an internal note of 31^st July, unless a bad reference, tends to indicate that this is a paraphrase of a mere general assertion)

iii) 29 September 2003, a letter to Mr Lewis's solicitors:

"the consultation on 26 July 1999 was significant to our underwriters and terms would have been altered based on the medical notes made available about the consultation" See above.

iv) 12 January 2004, a letter to the FOS:

"Other non-disclosures were noted but the underwriters felt that the left knee consultation was the only consultation significant enough to actually change the way they would have underwritten the policy"

This is very general, but to the extent that it impinges and stands alone, that is not quite what was said at the time. In fact, it does not stand alone and (as he puts it "by way of example" in respect of incomplete passages), Counsel for Mr Lewis draws my attention to the fact that the following passage from the very same letter is not included in the passage quoted for NU:

"Our underwriters confirmed that in view of his manual occupation, had they been aware of the consultation they would have at the very least, investigated further and a knee exclusion may then have applied, subject to review to see if it could be revoked after a two year period (emphasis added)."

Given the obvious materiality of that unquoted passage, its omission is highly unfortunate. I assume, of course, that it was inadvertent but if it does nothing else it is a good reminder of the danger, and unreliability, of the process of picking out passages of some of the correspondence and characterising them as evidence.

v) 5 October 2004, a letter to the FOS:

"we would have asked him about this further and this would have led to his left knee being excluded 'at that time'. Due to this lack of notification about the visit relating to his knee/varicose vein pain, our underwriters were not given this opportunity and so Mr Lewis received more favourable underwriting terms than he should have got." See above, and of course as with other instances of "knee exclusion" assertions, this assumes, contrary to what Ms Humphreys opined, there would have been cover at all.

Conclusion and sub-division of the rationale

89. I have come to the conclusion on the basis of all of the above that I accept the submissions put forward for Mr Lewis in closing as to inducement, and I subdivide the rationale below. NU submit, and it is agreed, that I do not need to determine exactly what the difference in the cover would have been, merely whether the non-disclosure was an effective cause of NU's entering into the policy on the terms which they did. So be it, but where so many different versions are advanced, it is appropriate for the court to scrutinise with more than usual care whether the base proposition is valid.
90. I have no hesitation in rejecting any case advanced by NU to the effect that the underwriter (here, it is common ground, Debbie Ford) would have excluded the knee altogether/declined cover, without more. This is partly for the reason that the most telling documents in this as in many other cases are those written closest to the time. The three key statements (all those of Mr Parker, not Ms Ford) are the 2 of 9^th January 2003 and the letter of 14^th January. At its highest, NU's realistic case is contained somewhere in

"This would have resulted in further enquires and possibly an exclusion", "would have necessitated further enquiries – at least a medical examination. The results of the examination may have necessitated a knee exclusion – reviewable after2 years" "would have conducted further enquiries at that time and possibly a knee exclusion would have been applied."

91. There is no support, for the reasons set out above, for any higher case which comes close to outweighing the effect of those contemporaneous (and unguarded) observations. I find that much of any such case has grown like Topsy, and has no sound basis. There is certainly no sound evidence for it, be it Ms Humphreys' evidence, general practice, prudent underwriting, the correspondence, commonsense or at all.
92. That leaves the next question: If Mr Lewis had disclosed the Visit, would NU have made further enquiries – whether by way of medical examination or otherwise? The GP visit in July 1999 should have been disclosed in Mr Lewis' DOH – it would have been "material" to a reasonably prudent underwriter: that does not turn it into an actual influence on any, never mind the actual, underwriter. That form was considered by Ms Ford. NU has chosen not to call any evidence from Ms Ford. NU had ample opportunity to obtain a statement from Ms Ford at any time between its avoidance in January 2003 (indeed from when it started to consider avoidance) and Ms Ford's departure from NU in 2005. In the unexplained absence of evidence from her (or indeed anyone else such as Mr Parker) I am reluctant to draw inferences in NU's favour.
93. In the absence of any evidence from Ms Ford, however, NU can only ask me to infer what she would have done if disclosure had been made. Is there scope for the Court to infer or presume that Ms Ford would have made further enquiries had the Visit been referred to in the DOH? It is clear from the evidence that Ms Ford acted (i) in a way which was different to how Ms Humphreys would have acted, and (ii) in a way which was different to how NU's own expert stated a prudent underwriter would have acted. In particular, as regards the allergy test results being outstanding (despite Mr Laskey having directed that written evidence be obtained), no enquiries being made about the newly-disclosed course of injections, no ano-rectal exclusion (which would presumably have meant no cover at all on the "two and out" basis) and no further information about those problems. I am far from satisfied as to any relevant general practice within NU, and its general application, and am not satisfied that she would have followed whatever there was. She was, so far as I can tell on what I have, a person who fell quite a long way short of prudence in identifiable respects on this policy, and disregarded even the express requirements of the Senior Underwriter. Mr Parker says he would have made further enquiries: that may be so (and I do not have to decide that, though the sequence of events gives me some cause to doubt it), but I am not prepared to infer that she would have done.
94. It is also clear from the documents that by November 1999 NU were anxious to progress Mr Lewis' application. It is for that reason that it gave up waiting for his allergy tests results before issuing conditional acceptance terms. This, I accept as submitted, does suggest that Ms Ford would have been reluctant to raise further queries had she otherwise been minded to do so.
95. Lastly I find it hard to disregard the live evidence of Ms Humphreys for NU who expressly stated that, acting in accordance with policy, practice and guidelines, no such further enquiries would have been made – she contending for "no cover at all without more, simply on the basis of fact of the Visit alone".
96. In my findings here as elsewhere I have cautioned myself against being unduly favourable to Mr Lewis given that his failure to disclose deprived NU of the actual answer to the questions arising.
97. Overall I am not satisfied that Ms Ford would have made further enquiries. It is for NU to discharge its burden and it has failed to do so. What its case may have looked like had Ms Ford been called I have no idea: for whatever reason she was not, it remains unexplained and accordingly I have to decide the case on what I have.
98. If, however and contrary to the above, any enquiries would have been made, I find on a balance of probabilities that the cover terms would have been unaffected. There are 3 possible types of enquiry, one specifically mentioned – medical examination (by the GP or an independent doctor), questions of the GP or a further MQ directed at Mr Lewis. The question what anyone would have done with the results is not a "Debbie Ford specific" one – that is also common ground.
99. I accept Mr Lewis's evidence (and it is confirmed by the GP notes) that the GP examined his knee in July 1999 and found nothing abnormal. I accept Mr Lewis's evidence as to the circumstances of the Visit, and the (non) history relating to his knee thereafter. There is no subsequent or other evidence as to his knee to indicate that anything adverse would have been found had he been examined by anyone in December 1999.
100. Whilst it may be that Mr Lewis's later statement, dealing with what he would have said had he been asked about the knee, looks rather perfect, the fact is that had he, or his GP, reported, as I find they would, what he told the court about his knee, then, like the results of any further physical examination, it is at the very least probable that he would have come out with a clean bill of health, and that any fears about his knee would have been allayed. The further enquiries were to have had a purpose – to see whether the knee was good or not, and it would probably have been pronounced good – indeed on such evidence as there is (including the 2003 GP's letter), as good as was reasonably possible and consistent with the passing complaint having been made by him in July.
101. What, therefore, would NU have done in the light of the further enquiries? I start with the obvious, and in so doing reject the counter-submissions for NU as to the meaning to placed on these documents. Each of the immediately contemporaneous statements speaks of "may" or "possibly". It makes little sense to read those documents other than in the sense that it was a possibility – less than a probability.
102. That would be an end to this aspect of NU's case, without more . However, if that is unduly legalistic, then commonsense must intervene. What was posited by Mr Parker was some form of enquiry, and that such enquiry may/would possibly lead to an exclusion. "May", or "possibly" are premised on an adverse outcome – perhaps even the far end of "bad" on the "good-bad spectrum" – the worst case. I have held that the outcome would not have been adverse; it would not have been anywhere near the bad end of any spectrum. Accordingly, the may/possibly eventuality would not have been sufficiently approached to become a probability even on this alternative (and in my view over-generous to NU) reading of the documents.
103. In the same way as I caution myself about Mr Lewis, no NU underwriters gave evidence, so Mr Lewis has been deprived of the opportunity of hearing from them (if indeed they would have supported any case assisting NU's position) and testing their account on it.
104. I return to the basic test, and try not to fall into any trap of dividing NU's particular cases up and dismissing each possible sub-element without considering whether, overall and on a balance of probabilities, NU was induced by the non-disclosure to enter into this policy on these terms. Having undertaken that exercise, I find that, overall, NU has failed to satisfy me that the terms would have been any different had the disclosure been made.
105. Accordingly I answer Question 3 in favour of Mr Lewis, and I will hear counsel as to the directions required for the quantification of his claim and as to costs.

FOOTNOTE

I add this by way of clarification following an application for permission to appeal (but again I do not purport to cover every single sub-set of the submissions made in this matter).

a)    Ms Humphreys' enquries about, and subsequent exclusion of, the neck was not clear support for any general practice within NU, still less a safe pointer to what Debbie Ford would have done. The former was plainly a more rigorous, or conservative, underwriter than, at the very least, Debbie Ford, and, it seems, Jonathan Parker (she contending for "no cover at all" because of the Visit).  As held, her evidence was unimpressive

b)    the clean bill of health which I find would have been returned in respect of the knee was different in kind to the report on the neck. The former was very transient and any subsequent enquiry could not have resulted in a better outcome. No use of Ibuprofen. no recurrence at all, no visit to practice nurse. The neck, by contrast, plainly had something  wrong, had done for a long time and whatever it was was active and current. Mr Lewis woke every morning with a stiff neck, and had done for two years. There was no evidence from NU as to how that hypothetical report would have affected the terms, the best being statements at the time that further enquiries would have been made which "may" / "would possibly" have led to a knee exclusion. There is no reliable evidence capable of putting the case any higher than that.

c)    I accepted what Mr Porter said about the knee being different from the neck. It is now said that there is nothing to show that NU thought the same way. In truth there is nothing to show what either Ms Ford in particular (further enquiries or not) or NU in general (reaction to responses, if enquiries were made) thought, or would have thought, save what I can derive by way of inference.

d)    in making an application for permission to appeal on the evidential relationship between the neck and knee, which I refused, Counsel for NU expressly acknowledged that these were matters of "weight" only.

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