In Farid Yeganeh v Zurich Plc and Zurich Insurance Company 2009 Folio 244, the High Court found that Zurich did not have to pay any compensation to Mr Yeganeh as he had breached a condition of his insurance policy by making fraudulent claims for property lost in a house fire.

A fire caused extensive damage to the upper floor of Mr Yeganeh’s house in September 2007. As a result Mr Yeganeh made a claim on his insurance policy with Zurich. This policy contained General Condition 4 which required Mr Yeganeh to “do all you can to prevent and reduce any costs, damage, injury or loss” and stated that “if a claim is fraudulent or false in any way, [Zurich] will not make any payment and all cover will end“. After considering the claim, Zurich refused to pay out any compensation as “the fire was fortuitous so far as Mr Yeganeh is concerned and was caused deliberately either by him or someone acting on his behalf“.  Furthermore, they stated that “Mr Yeganeh has lied in the claims process to exaggerate his claim and this was in breach of General Condition 4 and in breach of the general duty of utmost good faith“.

The court was asked to consider whether firstly Mr Yeganeh had started the fire deliberately, and secondly whether he had made a false claim as to the items lost in the fire. Regarding the cause of the fire, Judge Mackie QC noted that it was for Zurich to show that Mr Yeganeh had started the fire deliberately, and that it must bring clear evidence for this given the seriousness of the allegation. Despite expert evidence suggesting that arson was a possibility, the court found that Zurich could not provide the conclusive evidence required to show that Mr Yeganeh deliberately started the fire. However, despite the fact that Mr Yeganeh clearly did lose some property as a result of the fire, the court found discrepancies in his evidence and found that he made claims for property that was not in the house at the time of the fire, such as designer suits.

As a result, the court allowed Zurich’s defence on the basis that Mr Yeganeh had breached General Condition 4 of the insurance contract by making a false claim for the clothing contents. Mr Yeganeh’s entire claim therefore failed and no compensation was owed, even for property that had been genuinely damaged in the fire.