It is that time of year when we collect together the various briefings and articles that we have produced over the last 12 months. We hope that these will be a useful source of reference to our clients and contacts with an involvement or interest in relevant developments in the insurance and reinsurance market. All of our articles, as well as updates on other legal and regulatory developments, are available on our Insurance Blog where you can also subscribe for updates: https://hsfnotes.com/insurance.
There have been a number of significant insurance decisions in the courts this year considering important issues for underwriters and policyholders alike. These include:
- the Court of Appeal decision in Equitas Insurance Ltd v Municipal Mutual Insurance Ltd which considered, for the first time, how liabilities for mesothelioma claims should be treated at the reinsurance level;
- the Court of Appeal decision in Euro Pools Plc (in administration) v Royal and Sun Alliance Plc which gives guidance on the key legal principles relating to notification of circumstances under claims made liability policies;
- the decision of the Supreme Court in Travelers Insurance Company Ltd v XYZ which considered the question of an insurer's liability for costs under section 51 of the Senior Courts Act 1981; and
- what has been described by some as the first decision under the Insurance Act 2015 in the Scottish courts (Young v Royal and Sun Alliance Plc).
2019 has also seen a number of other interesting developments that will no doubt impact the insurance market going forward. We had the first judgment in a shareholder class action in England & Wales handed down by the High Court in Sharp v Blank (also known as The Lloyds/HBOS litigation).In another sign of the extent to which class actions have become part of the mainstream of English litigation, the Supreme Court has this year given permission to appeal in three cases brought by or on behalf of large groups of claimants in three completely different contexts: Merricks v MasterCard Inc, Wm Morrisons Supermarkets Plc v Various Claimants and Okpabi and others v Royal Dutch Shell Plc and Shell Petroleum Development Company of Nigeria Ltd. Significant disputes of all types frequently give rise to insurance issues and they are worth keeping under review from this perspective. By way of example, cases of "class action tourism" have implications for global insureds and those insuring them. Earlier this year we released a webinar and short guide to Insurance Issues in Class Actions as part of our series of webinars on class actions in England and Wales. These can be accessed from our Insurance Blog.
We considered in our Annual Review of 2018 the Morrisons decision and its impact on insurance and the market given that it was the first successful UK data breach class action. This year, the proposals announced by the ICO to levy significant fines on organisations for breaches of the General Data Protection Regulation (GDPR) brings the management of data risk to the fore once again. It also prompts the question as to whether you can insure penalties imposed for breach of the GDPR and we consider the answer to this in one of our articles.
From a regulatory perspective, Brexit has continued to be top of mind for many insurers and intermediaries. We have continued to work with clients across the sector, helping them in their preparations for the UK's exit from the EU. Given the uncertainty that has persisted, this has meant that no-deal contingency planning remains highly relevant. Elsewhere in the regulatory sphere, the FCA published its thematic report on the general insurance distribution chain and gave a clear warning to firms involved in the design and sale of general insurance products that they must do more to protect customers from harm. The FCA also published its interim report on its general insurance pricing practices market study, which looked in particular at how firms adapt the margins they aim to earn according to the likely behaviour of individual customers. It found that pricing practices in the home and motor insurance markets are not working well for consumers and that firms' oversight of pricing practices requires "significant improvement". The FCA will consult on potential remedies in Q1 2020 once its final report is published. Earlier in the year, the FCA published the final report for its Wholesale Insurance Broker Market Study. It concluded that, while there is room for improvement, the FCA had not found evidence of significant levels of harm that merited the introduction of intrusive remedies. Finally, the extension of the Senior Managers and Certification Regime took effect for brokers from 9 December 2019 (a year later than (re)insurers).
2019 has also been a busy year for the team here at Herbert Smith Freehills both in London and across the network. We increasingly find ourselves working on cross-border matters with our international colleagues (whose contact details you will find at the end of this publication).It has also been a very positive year with us being awarded two awards for Insurance Team of the Year 2019 at both the Legal Business Awards and the Legal Week Commercial Litigation & Arbitration Awards.
We hope that you find this Annual Review of interest.
Finally I would like to thank you for your continued support of our practice. We strive to deliver the best service we can to you, our clients.
Please click here to access the 2019 review.