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Fraud unravels all? A critical examination of the fraud rules in marine insurance and documentary credit transactions

Richards, Katie ORCID: 2017. Fraud unravels all? A critical examination of the fraud rules in marine insurance and documentary credit transactions. PhD Thesis, Cardiff University.
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This thesis considers the extent to which ‘fraud unravels all’ explains the judicial response to fraudulent marine insurance claims and fraud in documentary credit transactions. The simplicity of the maxim suggests that fraud does not unduly trouble the courts and gives the impression of a uniform and deterrent approach to fraud within the civil law. The comparison made in this thesis demonstrates this impression to be misleading; the courts have conceived of fraud differently and have employed context-specific policy concerns to justify the shape of each fraud rule. The insurance discussions are dominated by deterrence with legal sanctions placed at the heart of the model. By contrast, the trade finance courts adopt a more laissez-faire attitude which prioritises the efficiency of the credit mechanism and considers deterrence an ex ante issue for the parties. Accordingly, this thesis examines the respective policy justifications and considers their continued validity in light of comparative and empirical evidence. In the insurance context, it is argued that the judicial understanding of deterrence is outdated which renders the resulting legal rule ineffective. An examination of approaches to fraud in other jurisdictions then demonstrates the possibility of constructing a more nuanced remedial framework which would balance the competing policy considerations of deterrence and proportionality. The documentary credit discussion contends that the narrow English approach to fraud is not an inevitable policy decision and moreover, has resulted in detrimental consequences for the credit mechanism. It employs empirical data to develop an explanation of deterrence for the duration of credit transactions. In both contexts, these arguments have important implications for the future development of the law. In summary, this research undermines the utility of ‘fraud unravels all’ and calls instead for courts and academics to resist instinctively attractive solutions in favour of a robust, empirically-informed approach to fraud.

Item Type: Thesis (PhD)
Date Type: Completion
Status: Unpublished
Schools: Law
Subjects: K Law > K Law (General)
Uncontrolled Keywords: fraud, marine insurance, documentary credits, international trade, relational governance, relational contract theory, deterrence theory, United City Merchants, The DC Merwestone
Date of First Compliant Deposit: 28 March 2018
Date of Acceptance: 9 March 2018
Last Modified: 03 Nov 2022 11:07

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