The Scottish Lion Insurance Company Ltd decision 

On 14 October, the parties involved in the Scottish Lion scheme dispute reconvened in front of Lord Glennie in the Scottish Court of Session for a further brief hearing. No further argument was heard from either side, and Lord Glennie agreed to the objecting creditors request to dismiss the petition to sanction the scheme. The order will not be issued until 16 October, and Scottish Lion will have 28 days from then to appeal. An appeal is unlikely to be heard until the middle of next year at the earliest.

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InSure October 2009

This month's roundup of developments affecting the insurance industry sees the ABI warning of the costs of Solvency II, the European Commission proposing a new insurance regulator, the FSA unveiling measures to protect PPI consumers and publishing TCF good & poor practice examples, ....

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September 2009

Asbestos is a substance that has been widely and lawfully used by industries, before being identified as dangerous and triggering significant litigation.

Asbestos-related illnesses have appeared later in France than compared to other countries due to the fact that French companies started using asbestos later than their foreign counterparts. While in other countries the number of patients seems to decrease, this is not the case in France where asbestos, used in a professional context is said to kill approximately 2,500 people each year with an increase of 25% every three years. Scientists estimate that the peak of mortality should occur between 2025 and 20401 and that asbestos will claim the lives of 100,000 victims in France.

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The Court of Session judgment in Re Scottish Lion Insurance Company Limited

• When considering whether the statutory majority in value of claims (75%) has been achieved the Court's inquiry is not limited to whether the valuation is perverse or irrational and is a matter of both jurisdiction and discretion;
• The principle of "creditor democracy" would apply when a scheme is proposed in a situation where there is a problem requiring solution;
• A solvent scheme is an instance where "subject to other considerations" creditor democracy would not carry the day;
• It is incumbent on the company proposing the scheme to adduce in evidence reasons which might justify why the majority of creditors is attempting to coerce the minority.

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September 2009

Recent Cases and Regulatory & Legislative Developments from:

• the UK;
• the US;
• Germany;
• France;
• Spain;
• Latin America;
• and China.

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Ground-breaking ruling in proposed Scottish Lion Scheme of Arrangement

On 10 September a Scottish Court took the view that the creditors of the Scottish Lion Insurance Company Limited should be unanimous in approving a solvent Scheme of Arrangement of the company.

The view of the judge, which upheld the objections of 5 dissenting (US) creditors, has enormous potential ramifications. It threatens the whole viability of solvent Schemes of Arrangement as a mechanism for effecting planned exits from the market, or specific sectors of it, and releasing capital for re-deployment elsewhere.