Implied terms in reinsurance agreements

Ever since Phoenix v Halvanon [1985] 2 Lloyd’s Rep 599 the London reinsurance market has worked on the basis that the courts will imply into obligatory and facultative reinsurance agreements a variety of terms for the protection of reinsurers. That assumption was challenged by Morison J in Bonner v Cox [2005] Lloyd’s Rep IR 569, at least in respect of non-proportional treaties. The learned judge’s doubts have been confirmed and indeed strengthened by the Court of Appeal on appeal in this case, Bonner v Cox [2005] EWCA Civ 1512, forthcoming in [2006] Lloyd’s Rep IR. A number of other issues were also raised, although that of implied terms was by far the most important.