High Court considers Insurers’ duty to act rationally when exercising right to avoid
In the recent case of UK Acorn Finance Ltd v Markel (UK) Ltd , the High Court found that underwriters had failed to apply rational decision making when exercising their discretion to avoid a professional indemnity policy. The court confirmed that in certain circumstances a contractual discretion, even where it is stated to be absolute, is subject to an implied duty to approach the decision rationally and with an open mind (a Braganza duty).