26 April 2007

Addleshaw Goddard acts in landmark reinsurance case concerning the scope of 'follow the settlements' clauses in reinsurance contracts

WASA v Lexington (Commercial Court, 25 April 2007)

The Commercial Court yesterday delivered judgment in a landmark case concerning the interpretation of 'follow settlements' clauses in reinsurance contracts.

Addleshaw Goddard acted for the successful claimant, WASA International Insurance Company Limited ('WASA') in proceedings against its reinsured, Lexington Insurance Company ('Lexington').   WASA sought a declaration that it was not liable to indemnify Lexington in respect of a settlement that Lexington had entered into with its own insured, the Aluminum Company of America ('Alcoa'), for the cost of remedying pollution and environmental damage at numerous sites across the US. The settlement was entered into on the basis of Washington State court rulings determining that Lexington was liable to provide insurance coverage for all damage incurred by Alcoa, irrespective of whether the damage had taken place before, during or after the insurance coverage years.

25 April 2007

Arbory Group Limited v West Craven Insurance Services (A firm) (2007)

The recent case of Arbory Group Limited v West Craven Insurance Services represents the first time that a company under-insured for Business Interruption Insurance due to its broker 's negligent advice, has successfully argued that it should be entitled to damages for loss of profit flowing from the non-receipt of insurance monies.  This consequential loss claim was in addition to its claim for recovery in respect of the shortfall in insurance monies.

25 April 2007

US law of environmental liability coverage and English reinsurance contracts

The Facts 

Lexington insured Alcoa in respect of loss or damage to property, on their Special Floater form, referred to as a difference in conditions insurance, from noon on 1 July 1977 until noon on 1 July 1980. The insurance contained a standard US Service of Suit clause. 

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19 April 2007

Bribery allegations to be determined by arbitration? – Fiona Trust and Holding Corporation & Ors v Yuri Privalov & Ors [2007] EWCA Civ 20

Where a party alleges contracts were procured by bribery and purports to rescind those contracts, does the dispute come within the arbitration clauses in those contracts? Is there really a difference between a dispute arising "out of" a contract and a dispute arising "under" a contract? If a contract is rescinded on grounds of bribery, will the arbitration clause within that contract survive?

March 2007

Brokers Beware: Assume in Haste, Repent at Leisure

The recent High Court decision in Fisk v Thornhill & Son (A Firm) highlights the risks to brokers if they fail to inform the insured of policy terms and conditions or omit to conduct thorough investigations before giving warranties on the insured's behalf.

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Spring 2007

Reinsurance and International Risk Team Notes

• Intermediaries
• Choice of law and jurisdiction
• Identity of insureds
• Non-disclosure
• Conditions precedent
• Notification
• Settlement
• Asbestos update
• Events and seminars

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