Equitas Limited v R&Q Reinsurance Company (UK) Limited11 Nov 2009
Slaughter and May successfully represented Equitas Limited (Equitas) in proceedings in the High Court regarding Equitas's pursuit of multiple reinsurance claims against its reinsurer, R&Q Reinsurance Company (UK) Limited (R&Q). In the first ruling of its kind, the Court determined that Equitas could prove its claims at a retrocessional level with the assistance of an actuarial model. The case provides important clarification for the reinsurance sector in relation to claims which had ground to a halt for over a decade as a result of disputes and market uncertainty. It is not yet known whether R&Q will appeal.
Equitas was established to reinsure and run-off the 1992 and prior years’ non-life liabilities of Names, or Underwriters, at Lloyd's of London. The reinsurance claims arise out of the 1990 Iraqi invasion of Kuwait and the grounding of the oil tanker, Exxon Valdez, in 1989. The issue in dispute was whether R&Q could decline to settle claims at a retrocessional level simply because all loss settlements in the reinsurance spiral market had included some element of incorrectly aggregated Kuwait/BA or irrecoverable Exxon Valdez losses, or whether Equitas could prove its claims through the use of actuarial models capable of identifying with reasonable certainty the effect of the incorrectly aggregated Kuwait/BA and irrecoverable Exxon Valdez elements.
Dispute Resolution: Efstathios Michael (partner), Stephanie Stapley (associate), Damian Taylor (associate)
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