Primeo Fund (In Official Liquidation) and Bank of
Bermuda (Cayman) Limited, HSBC Securities Services (Luxembourg)
SA (Cayman Islands Court of Appeal 13 June
2019)
The common law principle of reflective loss has been
judicially described as a "perplexing and developing
area". The most recent decision of the Court of Appeal in the
Cayman Islands has highlighted the importance of paying close
attention to the scope and application of the
principle.
On 13 June 2019 the Cayman Islands Court of Appeal gave judgment
in Primeo Fund (In Official Liquidation) and Bank of Bermuda
(Cayman) Limited, HSBC Securities Services (Luxembourg) SA in
which it held that recovery by Primeo of losses caused by the
administrators and custodian of the feeder funds, through which
they were invested in Bernard L Madoff Investment Securities LLC
("BLMIS"), were barred by the principle of reflective
loss, even though wrongdoing had been established.
