The UK Commercial Court has decided that a reinsurance company is entitled to damage for the cost of investigating a conspiracy between one of its employees and its broker/intermediary. R+V Versicherung AG v. Risk Insurance and Reinsurance Solutions, SA, [2006] EWHC 1705 (Commercial Court July 10, 2006). The Court had previously ruled on other damages requests. The fraudulent activity included a hidden compensation agreement that gave the broker additional commissions in exchange for an equity interest in a London operation that was of minimal if any value.
UK Court Opinions
UK – settlement agreement does not impair reinsurance
A UK Chancery Court has held that by entering into collateral settlement agreements relating to asbestos-related personal injury claims, a party did not violate provisions of various reinsurance agreements. Curzon Insurance Limited v. Centre Reinsurance International Company, [2005] EWHC 2991 (Ch) (December 21, 2005). The Court stated that the rights of the reinsurers under the reinsurance agreements were not impaired by the settlements.
UK – Reinsurance broker not entitled to double brokerage
The UK Court of Appeal has held that a reinsurance broker was not entitled to receive brokerage on both a deposit premium and on the total adjusted premium (without deduction of the deposit premium). This was a question of the interpretation of four excess of loss reinsurance contracts and seven burning cost contracts. Absalom v. TCRU Ltd., [2005] EWCA Civ 1586 (December 19, 2005).
UK Court issues injunction to stop actions in a United States District Court
At the request of the sole member of a Lloyd's syndicate that is in run-off, the London Commercial Court has issued an injunction to restrain a party to a UK arbitration from seeking to intervene in a related action pending in a United States District Court, in which it would seek to restrain the Claimant in the UK arbitration from proceeding with the UK arbitration. Goshawk Dedicated Ltd. v. ROP Inc., [2006] EWHC 1730 (Queen's Bench Div. Commercial Court July 12, 2006). The Court held that the parties were obligated to arbitrate in the UK, as contractually agreed. This is an interesting example of a jurisdictional conflict between two countries.
UK Court rejects contention that party may be an additional insured as an undisclosed principal
A broker was directed to procure a policy on a vessal for the benefit of two parties as co-insureds. It failed to have one party named as an insured. When a loss occurred and the claim of the unnamed party was denied, litigation unsued. The UK Court of Appeal held that losses of the unnamed party resulted from breach of duty by the broker, and that the unnamed party could not be considered to be a co-insured based upon its status as an undisclosed principal of the policy's beneficiary. Talbot Underwriting Ltd. v. Nausch, Hogan & Murray, Inc., [2006] EWCA 889 (June 29, 2006).