Abstract

Reinsurance in Mesothelioma Cases

Utmost Good Faith

Contribution

Article

Claims on Reinsurance in Mesothelioma Cases. Utmost Good Faith. Contribution

 

In respect of the treatment of mesothelioma claims for the purposes of Employers' Liability reinsurance there is an issue whether the reinsured is entitled to present each outwards reinsurance claim to any single triggered reinsurance contract of its choice, that is, whether it may 'spike' the claims, for example, having settled the inwards claims on the basis that each policy on risk was contributing a pro rata share of the loss being paid by it. This may also raise an issue as to whether the reinsurance claim is contrary to its duty of utmost good faith or an implied contractual duty requiring it to present its reinsurance claims in good faith.

 

If the reinsured is so entitled, there may be  consequential issues as to how resultant rights of recoupment and contribution, are to be calculated. what rights of contribution and recoupment do the reinsurers who are called upon to pay the claim acquire against other reinsurers also on risk for the claim, and against the reinsured in respect of any deemed self-reinsurance, and how those rights fall to be calculated. In particular, should they be calculated using the 'from the ground up' pro rata method of apportionment taking into account the first layer of retention in every year of reinsured exposure, or the 'independent liability' method?

 

These issues are such as to justify leave to appeal to a court from an award by an arbitrator which deals with them: Equitas Insurance Limited   v Municipal Mutual Insurance Limited [2018] EWCA Civ 991.