In what is undoubtedly a significant decision for boards seeking to grapple with how to respond to the impact of climate change on their company’s business as well as the D&O insurance market, the High Court has refused permission for ClientEarth, a minority shareholder in Shell plc, to continue a derivative action on behalf of the company against its directors (the Directors): ClientEarth v Shell plc & Ors [2023] EWHC 1137 (Ch). The underlying claim brought by ClientEarth alleged the Directors breached their statutory duties owed to Shell as a result of acts and omissions relating to ..read more

A recent case has considered whether property damage caused by the controlled detonation of a World War II bomb was “occasioned by war”. If it was, the damage would be excluded from cover by the operation of a war exclusion clause under a property damage and business interruption policy (the Policy). In Allianz Insurance Plc v The University of Exeter [2023] EWHC 630 (TCC), the High Court held that the insurer was entitled to a declaration that the insured’s claim for damage and other losses was not covered by the Policy due to the fact that the proximate cause of the damage was the dropping o ..read more

There are some exciting changes and promotions in the Insurance & Professional Risks team at Herbert Smith Freehills effective from 1 May that we wanted to share with our clients and contacts. Alexander Oddy takes over as head of the Insurance & Professional Risks team in London as Paul Lewis becomes new joint managing partner for Disputes and the UK/US Regional Head of Practice. In the same team, David Bennett, who specialises in Health & Safety, Personal Injury and Product Liability, has been promoted to Partner and Dan Saunders to Of Counsel. Dan’s practice focuses on Profession ..read more

The Court of Appeal handed down judgment today in David McClean & Ors v Andrew Thornhill KC [2023] EWCA Civ 466, unanimously dismissing the appeal.  Herbert Smith Freehills Partner Will Glassey and Associate Henry Saunders acted for the successful Defendant Andrew Thornhill KC. BACKGROUND The Claimants were investors in three film finance schemes which were promoted by Scotts Atlantic Management Limited (“Scotts“) in 2002 – 2004.  The schemes were intended to attract sideways loss relief, entitling investors to offset the schemes’ losses against their personal income. Each prospe ..read more

On 30 March 2023, the Treasury published a Call for Evidence alongside a joint PRA/FCA Discussion Paper, launching the first comprehensive review of the Senior Managers and Certification Regime (“SMCR“) since its introduction. There has been some speculation since the SMCR review was announced by the Chancellor of the Exchequer, Jeremy Hunt, as part of the Edinburgh reform package (see our blog post here) that this may be the first step towards abolishing the SMCR. The Discussion Paper and Call for Evidence provide a clear steer that the regime is here to stay. The two papers consist larg ..read more

We are pleased to share with you our Insurance & Professional Risks Annual Review of 2022 which provides an overview and analysis of the key cases and developments affecting those engaged in or with contentious matters in the insurance and reinsurance market. Please click the image below to access our 2022 Annual Review. Key Contacts: Paul Lewis Partner +44 20 7466 2138 Alexander Oddy Partner +44 20 7466 2407 Sarah McNally Partner +44 20 7466 2872 William Glassey Partner +44 20 7466 2854 Barnaby Hinnigan Partner +44 20 7466 2816 Fiona Tr ..read more

In Al Mana Lifestyle Trading LLC & Ors v United Fidelity Insurance Company PSC & Ors [2023] EWCA Civ 61 the Court of Appeal considered the jurisdiction of the English court to hear claims brought by the Claimant policyholders against their insurers for indemnities for business interruption losses (BI) arising from the Covid-19 pandemic. In doing so, the court had to consider whether a jurisdiction clause that both parties agreed was “not a model of drafting” was exclusive or not. The Court of Appeal reversed the first instance decision and found that the English court did not have ..read more

In Brian Leighton (Garages) Limited v Allianz Insurance Plc [2023] EWHC 1150 Civ 8 the Court of Appeal construed the wording of a pollution exclusion and determined that it applied narrowly and only where pollution (or contamination) was the proximate cause of the damage. The case concerned a fuel leak which contaminated the insured property. While the fuel leak gave rise to pollution or contamination, the parties agreed it was not the proximate cause of the damage. The proximate cause was penetration of the fuel pipe by a sharp object. The Court of Appeal overturned the first instance decisio ..read more

In Dassault Aviation SA v Mitsui Sumitomo Insurance Co Ltd [2022] EWHC 3287 (Comm) the court considered whether a contractual prohibition on assignment of a contract encompassed a transfer of subrogation rights to an insurer by operation of Japanese insurance law. The judge reached her conclusions with “an unusual degree of hesitation” and noted that the case gave rise to an “interesting point“. Ultimately the court found that the broadly drafted contractual prohibition in a sale contract did render ineffective the transfer of subrogation rights to an insurer. BACKGROUND The Claimant agreed to ..read more

HM Treasury unveiled yesterday its long awaited consultation paper for a new Insurer Resolution Regime (“IRR“) with the consultation set to run until 20 April 2023. The management of UK (re)insurers in financial difficulty is currently handled through a mixture of standard corporate and (re)insurer-specific insolvency arrangements. Proposals to amend the existing insolvency arrangements for (re)insurers are under review as part of the Financial Services and Markets Bill. The IRR will sit on top of these arrangements and provide a pre-insolvency set of powers. It will give regulators additional ..read more