1. Establishing a Claim Against Reinsurers: Issues Arising Under Facultative Contracts and Treaties Rob Merkin University of Exeter DLA Piper

2. The basic principle In order to claim against the reinsurers, the reinsured must: Prove its own liability under its direct wording Prove the liability of the reinsurers under their wording Payment by the reinsured is not required Charter Re v Fagan [1997] AC 313 Teal v Berkley [2013] UKSC 57

3. How does the reinsured prove its loss? The reinsured’s liability must be established and quantified as a matter of law How can that be done? Reinsured can be sued to judgment Reinsured can be on the wrong end of an arbitration award Reinsured can settle with the assured

4. Being sued to judgment Commercial Union v NRG [1998] 2 Lloyd’s Rep 600: foreign judgment binding unless Not defended properly Court had no jurisdiction “Manifestly absurd” WASA v Lexington [2009] Lloyd’s Rep IR 675: arguable that foreign judgment is only persuasive AstraZeneca Insurance Company Ltd v XL Insurance (Bermuda) Ltd [2013] EWCA Civ 1660: WASA is correct

5. Arbitration award Does an arbitration award differ from a judgment? Does confidentiality of awards make any difference? Must the reinsured exercise any right of appeal against an award?

6. Settlements Common law rule: settlements not binding Commercial Union v NRG [1998] 2 Lloyd’s Rep 600 Effect of “follow the settlements” clause Insurance Co of Africa v Scor (UK) Reinsurance [1985] 1 Lloyd’s Rep 312 Note variation in wordings, eg “without question” Effect of “claims co-operation” or “claims control” clause Gan Insurance Co Ltd v Tai Ping Insurance Co Ltd [2001] Lloyd’s Rep IR 667 Eagle Star Insurance Co Ltd v Cresswell [2004] Lloyd’s Rep IR 437 Beazley Underwriting Ltd v Al Ahleia Insurance Co [2013] EWHC 677 (Comm)

7. The XL “loss settlements” clause Reinsurers will follow any settlement “within the terms and conditions of the original policies” and “within the terms and conditions of this reinsurance” Hill v Mercantile & General [1996] LRLR 160: not pure FTS Equitas v R&Q [2009] EWHC 2787 (Comm): reinsured must act reasonably IRB Brasil Reasseguros v CX Reinsurance [2010] EWHC 974 (Comm): reinsured must act reasonably New Zealand Local Government Ins Cor v R+V Versicherung AG [2013] NZHC 690: assertion of loss not enough