Reinsurance

The operation of the London Market

The judgment of Thomas J in Sphere Drake Insurance Ltd v Euro International Underwriting Ltd [2003] EWHC 1636 (Comm), to be reported in [2003] Lloyd’s Rep IR, undertakes a detailed consideration of the operation of certain aspects of the London reinsurance market and comes to conclusions which will have far-reaching implications for the activities of brokers and other intermediaries in the market. The judgment is some 1,400 pages long and the vast bulk of it is concerned with determining the factual background and state of mind of the various parties involved. The concern of the following summary is to highlight the legal points of principle which emerge. The judgment is concerned purely with issues of liability, and the determination of quantum is to follow in due course, although the alleged losses were in the order of some US$250m.