Wasa International Insurance Co Ltd and AGF
Insurance Co Ltd v Lexington Insurance Co (Court of Appeal, 29
February 2008). On 29 February 2008, the English Court of
Appeal handed down its judgment in this follow the settlements
case reversing the decision of the judge at first
instance.
The judge at first instance had decided that the insurance
and reinsurance contracts were not completely back-to-back and,
as a matter of law, the reinsured's settlement of the
insurance claim did not fall within the terms of the
reinsurance, so that the reinsurers did not have to follow it.
The Court of Appeal, however, concluded that although there
were some differences in the insurance and reinsurance
contracts, the parties intended that they should have the same
effect and, therefore, as a matter of law, the reinsured's
settlement of the insurance claim did fall within the terms of
the reinsurance, so the
