London Market newsletter January 2009

In this month's issue:

• EL Trigger Litigation set for appeal;
• Retrocessionaire not entitled to avoid 'WCA carve-out contracts;
• Offer and acceptance of reinsurance contract;
• Failure of 'Machinery';
• Scheme report not necessary on issue of application for Part VII;
• Guest article.

Download (doc)

FSA Undertaking on Unfair Terms

Using its powers under the Unfair Terms in Consumer Contracts Regulations 1999 (the Regulations), the FSA has recently challenged the use of a declaration in the terms of business of the On-Line Partnership Limited as being potentially unfair. The On-Line Partnership Limited is a network of independent financial advisers and mortgage advisers, therefore, the impact of this undertaking has far reaching consequences on both firms in the immediate network and more widely across the financial services sector.

Court exercises Part VII jurisdiction to transfer shares

Mr Justice Warren recently approved Clyde & Co's application for an order approving an Insurance Business Transfer Scheme under which the general insurance business of AXA Reinsurance UK Limited ("AXA Re") was transferred to AXA Global Risks (UK) Limited ("AGR").

One noteworthy feature of the application is that Clyde & Co were able to use the wide powers available to the Court under Section 112 of FSMA to efficiently resolve AXA Re's involvement as one of the London market companies involved in the leasing of the LUC building. AXA Re was a shareholder in LUC Holdings Limited and, along with other shareholders, had entered into guarantees, inter alia, in respect of the payment of rent to the owner of the building.

Download (pdf)

We have recently seen important messages from FSA Enforcement in relation to 'credible deterrence' and the use of enforcement as a strategic tool. This is important for firms and individuals, particularly those in senior management positions.

2009 is going to be an important year in relation to the FSA's approach to enforcement. Attached is the first in a series of briefings looking at enforcement and approved persons which you should find helpful.

Download (doc)

 InSure January 2009

This month's roundup of developments affecting the insurance industry sees CEIOPS publishing a new report on the financial stability of the insurance market, the FSA proposing new rules for approved persons and inviting views on lack of transparency and conflicts of interest, ....

Download (doc)

EU introduces Regulation for law applicable to torts 

On Sunday, the EU introduced an entirely new approach to the way in which courts within the EU will determine what law applies to non-contractual obligations (torts and similar claims). Sunday was the date on which the Rome II Regulation (Rome II) came into force.

Rome II is designed to harmonise conflicts of law, and thus facilitate mutual recognition of court judgments between EU states. It is relevant to all businesses which trade anywhere outside England, and which may face tort claims, such as product liability, personal injury or unfair competition.