Compensation for Pleural Plaques Update 

On the 17 June 2009 the Damages (Asbestos-related Conditions) (Scotland) Act 2009 came into force.

This Act, which applies to Scotland only, allows pleural plaques sufferers to raise actions for damages in Scotland where they have been negligently exposed to asbestos.

Similar legislation is also being considered south of the border. These developments are of importance to those involved in commercial due diligence, particularly those involved in acquisitions of industrial and manufacturing businesses.

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Implications for Part VII Transfers

On Tuesday the High Court handed down its judgment setting out the grounds on which it had, on 25 June 2009, sanctioned the transfer of the general insurance business of the Lloyd's Names for 1992 and prior years of account to a special purpose vehicle in the Berkshire Hathaway group which had been renamed Equitas Insurance Limited (the "Transferee"). This newsflash flags the points to note from the judgment which are relevant to those considering schemes under Part VII of the Financial Services and Markets Act 2000 (the "FSMA").

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The New Cost of Proving Innocence

Government set to restrict access to Central Funds for acquitted defendants

"The Government believes that public funding should be prioritised on those who cannot afford to pay for their own representation and those who can afford to pay towards the costs of their defence should do so."

In June 2009, the Government published its response ("Response") to its consultation on 'The award of costs from Central Funds in Criminal Cases' 3 ("Consultation Paper"). The Response sets out important plans to reform the way in which an acquitted defendant in criminal proceedings is awarded costs from the public purse. The reforms are likely to have a major impact on those who insure against regulatory risk, not least providers of directors' and officers' ("D&O") liability insurance.

In summary, a successful defendant will only be entitled to claim for costs at legal aid rates. Unlike the present system which permits an acquitted defendant (whether an individual or a company) to claim all of the reasonable defence costs incurred in the proceedings, in future any costs in excess of legal aid rates will have to be borne by the defendant or, as is often the case, the defendant's legal expenses insurer.

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InSure July 2009

This month's roundup of developments affecting the insurance industry sees the GEO consulting on the Equity Bill, the FSA chairman addressing the ABI, CEIOPS announcing Solvency II implementing measures, ....

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Insurance industry still falling short on embedding risk management

A recent Moore Stephens’ survey has revealed that there is still some way to go in terms of embedding risk management into the UK insurance industry, given the FSA's continued focus on the whole area of risk management in regulated firms.

The survey was designed to assess how insurance entities are managing risk today and how risk management attitudes and practice in the industry have moved since the first Moore Stephens’ survey on this subject in March 2007.

Given the emphasis placed by the FSA on senior management responsibilities, we expected a significant increase in risk management maturity, but this was not the case. Despite some improvement, our survey reveals that while risk management frameworks and responsibilities have been set and people and resources allocated in the majority of insurance businesses, risk management continues to be low on board and senior management agendas.

This publication has been created to keep you up to date with recent changes and developments (and frequently forgotten core principles), which may cause you to change your corporate behaviour, and to bring to your attention any legal issues to which your business may be vulnerable. Contents:

• Terminating contracts - damages and exclusion clauses;
• More protection for directors' home addresses;
• How much warning should defendants be given where they may have to pay an additional liability to a winning claimant?
• Apportioning damages between a fraudster and the 'merely negligent' professional;
• Limitation - how the rules work in practice;
• Summaries of recent developments for those dealing with commercial disputes. 

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