ABSTRACT
The classic common law definition of subrogation is that of Brett L.J. in Castellain v. Preston (1883) Q.B.D. 380:
The insurer’s right of subrogation was codified in s. 79 of the Marine Insurance Act 1906 (MIA 1906), which is applicable to non-marine insurance and provides as follows:
(b) The insured’s duty of disclosure of limits on subrogation The possibility that the insurer may successfully pursue a subrogated recovery action does not usually influence him sufficiently to reduce the premium or agree contractual terms more beneficial to the insured, which ought to mean that anything impacting upon the insurer’s potential subrogated rights ought not to be material. In any class of risk where the insurers are known not to consider subrogated rights of recovery as an element in risk computation, then it is unlikely that a duty will be imposed the insured to disclose the fact that third parties are protected from liability. The information is simply not material.
