LLR: Insurance & Reinsurance

Lloyd’s litigation - Practice - Management of claims - Rule in Henderson v Henderson (1843) 3 Hare 100 - Public policy - Whether Lloyd’s name who had succeeded as plaintiff in negligent underwriting action could subsequently bring proceedings against same defendants raising portfolio selection claim - Whether name could plead special circumstances excusing him from compliance with rule.

Excess of loss - Whole account and aviation - “actually paid” - Reinsured in provisional liquidation - Assumption as to claims presented to reinsured, that they had agreed their liability in respect of those claims, but by reason of inability to pay debts as and when they fell due they were unable to pay those claims - Whether reinsurers liable to indemnify reinsured in respect of sums which reinsured had not paid, either by transfer of funds or by settlement in account, although amount of loss had been agreed - Whole account treaties incorporating Reinsuring Clause, Liability Clause, “Ultimate Net Loss” clause - Aviation treaty incorporating Reinsuring Clause, Original Aviation Loss Warranty Clause, Definition of Loss Clause and Ultimate Net Loss Clause - Approach to interpretation of contracts - Reasonableness.

Negligence - Valuation - Damages - Negligent overvaluation of property.

Taxation - Lloyd’s names - Underwriting business - Whether damages awarded to names against their members agents in respect of negligent underwriting arose from “a members underwriting business” and subject to tax in their hands.

Insurance - All risks - Property development - Consequential loss - Rent revenue lost due to delay caused by loss of architects drawings due to fire at site - Interpretation and application of clauses in consequential loss policy.

Lloyd’s - Agency agreement - “pay now sue later” clause - Summary judgment given against Lloyd’s Name - Appeal by Name contending that clause, Standard Agency Agreement (SAA) which included it, and byelaw under which Agreement was made were void under article 85 of Treaty of Rome.

Salvage - Award - Quantum - Pollution - Special compensation - International Salvage Convention, 1989 article 14 - Salvors claim under article 14(3) - Whether limited to expenses which he had incurred - Whether concept of salvage remuneration or reward should be rejected - Meaning of “fair rate” - Whether special compensation payable for duration of salvage operations once vessel or its cargo threatened damage to environment - Costs - Whether arbitrator misdirected himself when ordering successful salvors to pay part of shipowners article 14 costs.

Accident insurance - Bodily injury - Accidental means - Deliberate act of assured - Benefits payable in respect of “Bodily injury resulting in Death” - “Bodily Injury caused by accidental means” - Cause of death found to be consumption of alcohol.

Letter of credit - Contract - Illegality - Reinsurers unauthorised in Engand applying for injunction against payment to reinsured under letter of credit - Whether reinsurers had cause of action and were entitled to bring action despite assertion of their own illegality - Applicability of sect 132(6) of Financial Services Act 1986.

Evidence - Insurance litigation - Preliminary issues relating to construction of documents - Whether judge erred in excluding (1) evidence of way in which risk was presented and broked; (2) part of history of amendment/variation of cover; (3) all evidence of communications which did not cross broker/underwriter dividing line, and of understandings on part of one or other of parties, on basis that they were “private”; (4) oral evidence of matters covered by documents.

Limitation - Knowledge - Constructive knowledge - Claims by Lloyd’s Names in negligence in respect of losses incurred in writing US casualty business - Claims prima facie barred by six-year limitation period in Limitation Act 1980 - Whether Names could rely upon section 14A of Act - Whether Names had “knowledge required for bringing an action for damages in respect of the relevant damage” - Whether Names could reasonably have been expected to acquire knowledge required from documents sent to Names more than three years before issue of writ - Limitation Act 1980 section 14(A).

Lloyd’s litigation - Managing agents - LMX business - Whether underwriter assumed greatly excessive aggregate liabilities and took out too little vertical reinsurance - Whether underwriter was negligent in writing personal stop loss (“PSL”) reinsurance and failing to have matching reinstatements - Whether underwriter fell below standards to be expected of any underwriter who specialised in market - Liability of managing agents to names - Whether names entitled to be put into same position they would have been in if competent underwriter had competently chosen PML (probable maximum loss) event, competently calculated PNE exposure, competently decided how much of that exposure to retain net for names account, and then purchased vertical reinsurance for balance of exposure - Causation - Estoppel.

Contract - Construction - Whole account excess of loss reinsurance contracts - Coverage of all losses occurring during a defined period “in respect of risks written prior 1022 October 1982” - Reinsured syndicates underwriter subscribing to MIPI lineslip prior 10 October 22, 1982 but stamp for both marine (700) and non-marine (701) Syndicate placed on lineslip and signature of 5 per cent line without allocating percentage - Whether syndicate 701 not upon risk at all prior 10 October 22, 1982 in that 5 per cent attributable to 700 alone - Line of 701 reduced - Whether note on slip recorded formation of totally new contract - Whether declarations were “risks written” because lineslip was only an authority to write risks - Applicability of contra proferentem doctrine - Construction of aggregate extension clause.

Reinsurance - Follow the settlements - Construction of clauses - Lloyd’s litigation - Errors and omissions - Claims refused by reinsurers - Definition of wording - Whether liability of reinsurers had been conclusively determined - True meaning of follow settlements clause, and definition of “each and every loss” - Whether reinsurers bound by decision as to number of claims.

Insurance - Shop policy form - Change of circumstance - Clause stating that no cover until insurers agreed to increased risk - Whether chances of insured peril operating increase during period of cover would enable insurers to avoid liability.

Run-off - Pool - Reinsurance of pool members liabilities - Whether, on true construction, “reinsurance” agreement substituted reinsurers for reinsured member of pool as party to whom pool agency would owe its duties as agent conducting run off - Whether pool manager owed duties directly to reinsurer - Whether, if run-off conducted in way which forced reinsured to partake in run-off or to incur costs or expenses, reinsured had remedy against reinsurer - Whether, if pool manager repudiated its contract with reinsurer, reinsurer could terminate contract with reinsured - Obligation on reinsured to allow its name to be used, or to compel it to act in accordance with reinsurers reasonable instruction - Reinsurer agreeing to “bear all expenses of whatever nature that otherwise would have been claimed or requested from the reassured by the agent during the run-off period” - Whether that contemplated expenses to which pool manager might not be legally entitled - Whether there was warranty by reinsured that pool manager would carry out settlements conscientiously.

Wording - Construction - Proportional facultative obligatory reinsurance - Cover note providing “wording to be agreed”, “subject to all terms, clauses and conditions as the original and to follow the settlements and agreements of [reinsured] in all respects” - General portfolio of US and Canadian fire and casualty business - Whether reinsured made valid cession on sample contracts of insurance - Whether sample contracts outside scope of reinsurance - Meaning of “US and Canadian fire and casualty business” - Reinsurers liability in respect of amounts paid by reinsured to its assured or reassured in respect of costs/legal expenses.

Lloyd’s litigation - Competition - European Community - Whether conduct of insurance business fell within scope of EC Treaty article 85 - Whether Lloyd’s Central Fund arrangements (whether considered alone or in combination with Lloyd’s reinsurance provisions) (a) had an influence direct or indirect, actual or potential, on pattern of trade between Member States, such as might prejudice realization of aim/objective of a single market between Member States; (b) had as their object prevention, restriction or distortion of competition within Common Market - Whether rule of reason under European law applied to Central Fund arrangements - Whether, if Central Fund Arrangements infringed article 85(1), paragraph 10 of Central Fund Byelaw was severable - Whether defendants losses were caused by any of matters complained of in proceedings.

Lloyd’s - Lloyd’s names - Run off and reinsurance to close - Claims against underwriting agents, members agents and syndicate auditors - Alleged negligence in writing of run-off contracts and reinsurances to close - Limitation - Whether actions timebarred.

Excess of loss - Whole account and aviation - “actually paid” - Reinsured in provisional liquidation - Assumption that claims presented to reinsured, that they had agreed their liability in respect of those claims, but by reason of inability to pay debts as and when they fell due they were unable to pay those claims - Whether reinsurers liable to indemnify reinsured in respect of sums which had not been paid, either by a transfer of funds or by a settlement in account, although the amount of the loss had been agreed - Whole account treaties incorporating Reinsuring Clause, Liability Clause, “Ultimate Net Loss” clause - Aviation treaty incorporating Reinsuring Clause, Original Aviation Loss Warranty Clause, Definition of Loss Clause and Ultimate Net Loss Clause - Approach to interpretation of contracts - Reasonableness.

Jurisdiction Forum non conveniens International insurance litigation - Asbestosrelated claims - Action in New Jersey commenced by insured New South Wales asbestos producer and US subsidiary against New South Wales insurers - Insured claiming, inter alia, damages, declaration that insurers must defend and indemnify insured with respect to asbestos-related claims filed against them in United States, and statutory damages for injuries proximately caused by alleged violation of Sherman Act - Action in New South Wales for declaratory relief commenced by insurers against insured - Motion by insured to set aside New South Wales proceedings on forum non conveniens grounds - Whether insured had established that New South Wales was clearly inappropriate forum.

Follow the settlements - Aviation war risks - London Market Excess of Loss spiral - Follow the settlements - Iraqs invasion and occupation of Kuwait - Aircraft belonging to Kuwait Airways Corporation (KAC) flown out of Kuwait and destroyed - KAC insured under war risk policies - Total insurance value of aircraft about $700m - Maximum sum insured in respect of ground risk in relation to any one occurrence $300m - Kuwait Insurance Company, in collaboration with their reinsurers, paid to KAC $300m - KAC accepted payment, but without prejudice to their full claim, which was to be litigated - Whether Follow Settlements Clause required LMX reinsurer to follow settlement save in very exceptional circumstances - Whether reinsurer free to mount defences based on issues of law and/or fact notwithstanding settlements further down chain of reinsurers.

Jurisdiction - Service outside jurisdiction - International reinsurance dispute - Reinsured English company seeking to sue successor of Romanian state-owned reinsurer - Whether action should be set aside.

Company - Auditor - Indemnity - Bermudan reinsurance company suing appointed auditors for alleged negligence - Companys byelaws providing that “officers” should be indemnified against civil liabilities incurred as such officers - Whether word “officers” as used in byelaws included companys auditors appointed under byelaws.

Jurisdiction - Writ - Service out - international reinsurance placed in London market - Claim for declaratory relief by successor in title to reinsurer fronting for syndicate - Leave given to serve on reinsured in United States - Whether claim fell within scope of RSC Order 11 rule 1(d) - Meaning of “contract” - Proper law - Parties entering London market in order to transact business - Existence of concurrent proceedings in New York - Successor in titles claim based on allegation of illegal conduct on part of its predecessor - Whether action was proper case for service out of jurisdiction.