1. Application of the doctrine of precedent. – generally where courts have already decided the meaning of words or phrases, used in a policy of insurance, the doctrine of precedent applies in subsequent similar cases and a similar construction is given. In the words of Parke B in ;
a)   Glen Vs Lewis [1853[8 Ex Ch 67
“If a construction has already been put on a phrase or clause in a contract of insurance, the same should be given in subsequent similar cases.”
b)   Louden Vs British Merchants Insurance Co Ltd
 [1961] 1 Lloyds Rep 155
An assured under a motor insurance policy was killed in an accident. There was no doubt that he was drunk at the time. The insurance co. sought to avoid liability on the ground that he had died on bodily injury sustained whilst under the influence of drugs of intoxicating liquor, liability for which was excepted [not covered] under the policy. It was held that since the words were not uncertain as to their meaning and effect, they had to be interpreted as they were in previous cases and the insurer was not liable.
c)    Lawrence Vs Accidental Insurance Co Ltd [1881] 7 QBD 216

However in the words of Atkin L.J. in
d)   Re Calf and Sun Insurance Office
[1920] 2 KB 366 at 382
“On a question of construction, I protest against one case being treated as an authority in another unless the language and circumstances are substantially identical”

e)    Dino Services Vs Prudential Assurance Co. Ltd
[1989] 1 ALL ER 422

2.    Intention of the Parties – it is a fundamental rule of construction that the intentions of the parties prevail. Such intention is discernible from the policy itself and other documents relied upon by the parties. Courts are discouraged from speculating but reference to surrounding circumstances may be made e.g. a previous construction.


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