Originally published in BLG's Reinsurance and International Risk team Notes, Summer 2007
Although the last few months have seen fewer reinsurance disputes reaching the courts, there have been some important developments.
Follow the settlements
In Wasa v Lexington (2007) the Commercial Court had to address issues of allocation of multi-year pollution losses to reinsurers as well as the limitation on a follow the settlements clause in a facultative reinsurance contract containing a full reinsuring clause. The allocation aspects are discussed separately in this edition of RIRt Notes.
Lexington had issued property insurance to Alcoa covering three years, 1977-1980. Alcoa was an American aluminium smelting and processing company which, after the insurance was placed, became liable for huge clean-up costs in respect of pollution to its sites in the US between 1943 and at least 1980. After extensive litigation in the US, Lexington was found to be jointly and severally liable in
