The City Law School Professor’s work was mentioned in a dispute regarding an increase in the cost of insurance.
By Mr John Stevenson (Senior Communications Officer), Published
The Encyclopaedia of Banking Law, co-authored by The City Law School’s Professor Jason Chuah, was cited in a recent case heard on appeal to the Judicial Committee of the Privy Council.
The Privy Council, in the case of McPhee v Colina [2023] UKPC 8, from the Bahamas, stated:
"It is well settled that a customer is under no duty to examine bank statements and therefore cannot be estopped from disputing liability merely because of failure to notice their inaccuracy and draw it to the attention of the bank, even if a prudent and careful customer would have done so: see e.g. Encyclopaedia of Banking Law (2022) Division C, paras 384, 407; Tai Hing Cotton Mill Ltd v Liu Chong Hing Bank Ltd [1986] AC 80. The same reasoning must apply by analogy in this case."
McPhee v Colina raised a number of issues of importance to ‘the universal life insurance’ product and issues about the construction of the wording of policies.
The question in dispute was whether the charge to the appellant, known as the ‘cost of insurance’, was fixed for the life of the insured, or was subject to annual increases.
The Judicial Committee of the Privy Council held that the courts below were entitled to find that the insured’s (McPhee) policy had lapsed on several occasions and that Colina (the insurer) has the right to increase the cost of insurance as a condition of reinstatement following lapse.
The Privy Council is the alter ego of the UK Supreme Court but is empanelled to sit as the apex court in cases on appeal from certain Commonwealth countries.