Post on 05-Feb-2016
description
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INTERNATIONAL MARINE CLAIMS CONFERENCE
Dublin1 October 2004
Tim Taylor
Barlow Lyde & Gilbert
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Communication
What's the worst that can happen if it breaks down
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Topics
Dual Role of Advisers
The English approach
Follow Leader Clause
Claims and Underwriting
Practical Issues
Split markets
Relations with brokers
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Dual Role of Advisers
The US experience
English approach
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Basic Rules
Instruction for both underwriters and insured to defend claim
What happens if lawyers discover something detrimental to coverage?
Lawyer can and must report to underwriters matters relevant to coverage (Brown v Guardian Royal Exchange [1994])
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Limitations
Joint retainer, the insured waives solicitor/client privilege
Waiver is limited
Duty not to act in bad faith (TSB Bank v Robert Irving & Burns [2000])
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Role of Leading Underwriter
No duty of care to followers when risk first bound
Case law suggests position changes post placing
The “LEEGAS” [1987]
“Underlying the whole relationship between the leading underwriter and the following underwriters, furthermore, is the former’s manifest duty of care”
If leader is negligent theoretically followers could sue for damages
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Agency or Trigger
Conflicting authorities
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Mander v Commercial Union [1998]
Leader not agent when agreeing declarations to an open cover. The lead acts as a “trigger”
“It is agreed with or without previous notice to follow British underwriters in regard to agreements, alterations, extensions, additions, endorsements….”
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Charman v Roadworks [1994]
A slip can evidence the terms of a contract of agency between the leader and followers
What if there is no slip?
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Scope of Leader Clauseon Placing
Very wide in LEEGAS
“Any amendments, additions, deletions, including new and/or acquired and/or managed and/or chartered, notices of assignment, ratings and alternations of any description to be agreed by Leading Underwriter and to be binding on all others hereon”
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BP plc v GE Frankona & Others [2003]
“it is agreed to follow automatically all additions and/or deletions and/or amendments and/or alterations of any description whatsoever therein, Underwriters hereon waiving advice hereunder and also to follow all claim settlements made by the Leading Underwriters of this policy ……..without exception”
Held
“The Leading Underwriters clause was not concerned with declarations to the Open Cover “
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Claims Situation
Practice varies
No general rule that decision of leader binds followers (Paul Tudor Jones v Crowley Colosso [1996])
LMP Protocols
Claims management controlled by leader and “agreement parties”
International Placings?
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International Markets
DTV German Conditions Hull 1978
Leaders have powers
+ to provide bail
+ to make amendments (other than for increases in value) and settle claims which are binding on followers
+ commence proceedings
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Norwegian Plan
Article 9-Powers of claims Leader
“Unless otherwise agreed, the claims leader is entitled to take the steps referred to in §§ 9-3 to 9-9 with binding effect on the co-insurers. In all such cases he shall, as far as possible, take into consideration the interests of all the insurers. If time permits he should, in cases of importance, consult those co-insurers of whose existence he is aware”
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International Hull Clauses
Cl 45 “Where there is co-insurance in respect of this insurance, all subscribing Underwriters agree that the Leading Underwriter(s) designated in the slip or policy may act on their behalves so as to bind them for their respective several proportions in respect of……….”
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the appointment of surveyors, experts, average adjusters and lawyers
the duties and obligations to be undertaken by the Underwriters including, but not limited to, the provision of security
claims procedures, the handling of any claim and the pursuit of recoveries
all payments or settlements to the Assured or to third parties under this insurance other than those agreed on an ‘ex-gratia’ basis.
the Leading Underwriter(s), or any of them, may require any such matters
to be referred to the co-subscribing Underwriters.
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Responsibilities of Leader in Claims Situation Under English Law
Leader can only agree claims within protocol
Ex gratia settlements not (usually) included
Roar Marine v Bimeh Iran Insurance Co [1998]
“It is agreed with or without previous notice to follow leading British Underwriters in regard to agreements, alterations, extensions, additions, endorsements and cancellations and attaching and expiring dates, and also in regard to all decisions, surveys, the providing of bail and settlements in respect of claims and returns, but excluding ex gratia and without prejudice settlements.”
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Can Follower Sue Leader?
If a leader settles a claim (negligently) outside cover
The following market is bound to follow and pay claim but could claim against leader
If there is an agency, probably under normal principal/agency rules
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If no agency, is there a duty of care?
LEEGAS supports view that leader owes duty of care to following market
“Underlying the whole relationship between the leading underwriter and the following underwriters, furthermore, is the former’s manifest duty of care.”
Doubted in Roar
“The law does not have to afford a legal remedy for every conceivable failure to behave properly or professionally “
Not happened yet………….but
Key issue is for leaders to communicate in difficult cases or include a hold harmless clause in the slip
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Dangers
Leaders should be careful not to act outside their authority
Advisers should not give the impression that all followers support a position unless that is clear
More important when international split markets are involved
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Practical Issues
Be alert to the risks
Communicate with other markets
Do not assume that the rules in other markets are the same
Relationship with brokers
Varies in different markets