1 The Taylor Wessing Insurance and Reinsurance Review of 2014 January 2015
2 Contents Law and Jurisdiction... 5 The Starlight Shipping saga: decisions following the Supreme Court s ruling on 6 November High Court challenges the Financial Ombudsman Service s jurisdiction in relation to a Directors and Officers policy...7 Procedure No declaratory relief in relation to non-contracting third parties...11 Mesothelioma claim allowed despite prior settlement with other employers...13 Policy Interpretation / Scope of Coverage Co-insurance: Interpretation of a Follow Clause...16 Interpretation and interaction of conditions precedent to liability under an insurance policy...18 Wide scope of cover given to an employee/consultant in relation to a PI policy...21 Damages / Quantification of Claim The relevance of events subsequent to valuation date when quantifying under a Warranty and Indemnity Policy...24 Fraud and Avoidance Court of Appeal upholds Commercial Court decision concerning avoidance of residential insurance policy...26 No forfeiture of benefit where no dishonest intent...27 Fraudulent device rule should be followed as a matter of ratio...28 Insurers Recovery Actions No immunity for international compensation fund from freezing order relief sought by insurer in the UK...31 Consequential losses arising from riot damage held to be recoverable by insurers...33
3 Brokers Duties Insurance broker not liable despite providing inadequate insurance cover to a commercial client...35 The Supreme Court hands down judgment on PPI mis-selling and unfair relationships under the CCA...36 Reinsurance Court grants reinsurer s application for summary judgment retrocessionaire s defence had no reasonable prospect of success...38 Court of Appeal upholds Commercial Court decision concerning typhoon warranty...39 German Court Decisions The Federal Court of Justice on the German Insurance Act Belgian Insurance Development An ageing population and complementary insurance in Belgian Social Security...42 International insurance team... 43
4 4 Our Annual Insurance and Reinsurance Review summarises the key case law developments in insurance and reinsurance throughout the year. Please note that some cases covered in this review may be subject to further appeal. In our 2014 review, we look at the following cases: Case Judgment dates Page San Evans Maritime Inc & Others v Aigaion Insurance 4 February Co SA BGH v 12/03/2014 IV ZR 306/13 12 March Alan Bate v Aviva Insurance UK Ltd 21 March Milton Furniture Ltd v Brit Insurance Ltd 1 April Assuranceforeningen Gard Gjensidig v International Oil 7 May Pollution Compensation Fund 1971 Mitsui Sumitomo Insurance Co (Europe) Ltd and Others 20 May v Mayor s Office for Policing and Crime Federal Mogul Asbestos Personal Injury Trust v Federal- 27 June Mogul Ltd (formerly T&N Plc) Tokio Marine Europe Insurance Ltd v Novae Corporate 2 July Underwriting Ltd Ageas (UK) Ltd v Kwik-Fit (GB) Ltd and AIG Europe Ltd 4 July Beacon Insurance Co Ltd v Maharaj Bookstore Ltd 9 July Starlight Shipping Co v Allianz Marine & Aviation 18 July Versicherungs AG Amlin Corporate Member Ltd v Oriental Assurance Corp 7 August Dowdall v Kenyon & Sons 12 August BGH v 10/09/2014 IV ZR 322/13 10 September Eurokey Recycling Ltd v Giles Insurance Brokers Ltd 12 September Versloot Dredging BV v HDI Gerling Industrie 16 October Versicherung AG (The DC Merwestone) R (on the application of Bluefin Insurance Services Ltd) 20 October v Financial Ombudsman Service Ltd Plevin v Paragon Personal Finance Ltd 12 November Rathbone Brothers plc and Michael Paul Egerton- Vernon v Novae & Others 14 November
5 5 Law and Jurisdiction The Starlight Shipping saga: decisions following the Supreme Court s ruling on 6 November 2013 Starlight Shipping co v Allianz Marine & Aviation Versicherungs AG and others 1 Court of Appeal, 18 July High Court, 26 September Background Two decisions have been handed down this year in relation to the dispute between the ship owner of the vessel Alexandros T and the insurers of the vessel which sunk in May Starlight, the ship owner, and other co-assureds commenced proceedings against the insurers in 2006 (the 2006 Proceedings ) for the loss against their Lloyd s and Company Market Insurers (the Syndicates and the Company Market Insurers respectively), who denied the claim, alleging amongst other things that the vessel was unseaworthy with the insured s knowledge. Similar allegations were also raised in an arbitration between Starlight and another insurer of the vessel, Hellenic. The 2006 Proceedings were resolved through settlements (in the form of Tomlin orders) between Starlight and the insurers shortly before the trial began. In 2011, the insured commenced proceedings against the insurers in the Greek courts under the Greek Civil and Criminal Code. The insurers responded by seeking to invoke the Tomlin orders and the indemnity under the settlement agreements in favour of the insurers and also by initiating new English proceedings for relief and damages for breach of the jurisdiction clauses within the settlement agreements. The High Court held in favour of the insurers in its judgment dated 19 December 2011, granted the insurers summary relief and held, among other things, that the Greek proceedings were: in breach of the exclusive jurisdiction clauses in the underlying policies; in breach of the jurisdiction clauses in the settlement agreements; and in breach of the terms of the settlement agreements. The Court of Appeal, in its judgment dated 20 December 2012, allowed the insured s appeal holding that the claims brought by the Company Market Insurers and Syndicates should be stayed under Article 27 of the Judgments Regulation because these claims involved the same cause of action as the Greek proceedings and the English Court was second seised. The Supreme Court, in its judgment dated 6 November 2013, allowed the insurers further appeal, holding that Article 27 did not apply to the insurers claims since they did not involve the same cause of action as the Greek proceedings. The orders of Burton J in the High Court were reinstated and the remainder of the appeal against his judgment on the merits was remitted to the Court of Appeal. New Court of Appeal judgment dated 18 July 2014 The Court of Appeal dismissed the entire appeal (in favour of the insurers) and upheld the orders of Burton J granting summary judgment for the insurers with damages to be assessed and the insurers to be indemnified by the insured for their expenses in defending against the Greek proceedings. 1 See our previous commentary summarising the decisions of the High Court ( EWHC 3361 (Comm)), the Court of Appeal ([2012 EWCA Civ 1714) and the Supreme Court ( UKSC 70) at page 1 of our Annual (Re)insurance Review 2013 available here: 2  EWCA Civ  EWHC 3068 (Comm)
6 6 Regarding the indemnity provision, the Court of Appeal concluded that, regardless of their basis being tortious rather than contractual, the Greek proceedings were related to the loss of the Alexandros T and so fell within the indemnity provision. The insured agreed to indemnify the insurers against any claim that might be brought against them in relation to the loss of the Alexandros T and the Greek proceedings were certainly in relation to that loss. Regarding the settlement provision, the Court of Appeal stated that it was the obvious intention of the parties that the settlement provision and the indemnity provision should march together and complement one another. The Court of Appeal extended the principle from Fiona Trust v Privalov 4 (which related to the application of an arbitration agreement) to settlement clauses, concluding that the sensible commercial meaning of the words full and final settlement indicated that the intention of the parties was that all claims relating to the loss of the Alexandros T should be included in the settlement agreement. The Court of Appeal also extended the Fiona Trust principle to jurisdiction clauses and held that the Greek proceedings also fall within the jurisdiction clauses of the settlement agreements. Further, the Court of Appeal concluded that the Greek proceedings fell within the exclusive jurisdiction clauses contained within the underlying policies as the insured had promised, through those jurisdiction agreements, to submit to the exclusive jurisdiction of the English courts and thus promised not to bring claims in other courts where such claims might (or might not) succeed. The insured s argument that the claims for damages or declarations in favour of the insurers would interfere with the jurisdiction of the Greek court or infringe EU law was rejected. Following the Supreme Court s ruling lifting the stay on the insurers English proceedings, on the basis that the English proceedings and Greek proceedings did not involve the same cause of action, there was therefore no question of any interference with the jurisdiction of the Greek court. The Greek court would be free to consider the Greek proceedings but will have to decide whether to recognise any judgment of the English court that the Greek proceedings fall within the terms of the settlement agreements and any award for damages made by the English courts against the insured for the breach of the settlement agreements and the policies. That, however, the Court of Appeal held, is not an interference with the Greek court s jurisdiction but rather an acknowledgement of the Greek court s jurisdiction. New High Court judgment dated 26 September 2014 The Greek proceedings were brought not only against the insurers but also individual employees and underwriters of the insurers. The issues remaining to be determined by the High Court were: the relief sought by the insurers in respect of the employees/underwriters of the insurers; and specific performance of the Syndicates settlement agreement sought by the Syndicate insurers and Syndicate individual defendants. We focus below on the first issue. The settlement agreement with Hellenic expressly stated that it was in full and final settlement of claims against the Underwriters [i.e. Hellenic] and/or against any of its servants and/ or its agents and therefore was not in issue. However, the settlement agreements with the Company Market Insurers and Syndicates stated that they were in full and final settlement of claims against the Underwriters and did not contain wording in respect of servants or agents. The Company Market Insurers and Syndicates argued that the true construction of the word underwriters encompassed the servants and agents of the underwriter. The insured argued that underwriters meant the corporate entities set out in the preambles of 4  UKHL 40. A House of Lords decision which approved the Court of Appeal s approach setting out the principle that (in the absence of express wording to the contrary) sensible business people likely intend for any dispute arising out of a relationship to be determined by the same tribunal rather than different courts or tribunals.
7 7 the Company Market Insurers and Syndicates settlement agreements and not their employees, individual underwriters or agents. The High Court considered that the correct approach to the construction of the agreements was to consider the language used and ascertain what a reasonable person would have understood the parties to have meant and that if there were two possible constructions the court would be entitled to adopt that construction which is consistent with business common sense. With this approach, the High Court concluded that the word underwriters encompassed its servants and agents and that the alternate interpretation that it was restricted to the named corporate entities defied business common sense (since it would entail the Greek proceedings potentially resulting in awards against the servants or agents who would be entitled to seek to be indemnified from the underwriters and they, in turn, would be entitled to seek cover under the indemnity from the insured in the Company Market Insurers and Syndicates settlement agreements). Further, the High Court considered that the clear intention of the parties was for the settlement agreements to provide a general release and a clean break. The High Court also accepted the insurers argument that the joint tortfeasor rule that where there is a joint cause of action against two or more persons, a discharge against one tortfeasor operates as a discharge against all supported the insurers interpretation of the settlement agreements. The High Court did not consider any exceptions to the joint tortfeasor rule to be applicable in the circumstances. High Court challenges the Financial Ombudsman Service s jurisdiction in relation to a Directors and Officers policy R (on the application of Bluefin Insurance Services Ltd) v Financial Ombudsman Service Ltd 5 High Court, 20 October 2014 Bluefin acted as a broker in obtaining a D&O policy for Betbroker Ltd. Mr Lochner, a director of Betbroker Ltd who was an insured person under the D&O policy, gave notice to Bluefin of a potential claim against him. The insurer refused to provide cover and Mr Lochner alleged that this was because Bluefin did not inform the insurer of the claim. Mr Lochner complained to the Financial Ombudsman Service (the FOS ), which ruled that it had jurisdiction to hear his complaint against Bluefin. Bluefin sought judicial review of that decision, asserting that at the relevant time Mr Lochner was not acting as a consumer and therefore not entitled to complain to the FOS under the relevant rules. As an initial issue, the question arose whether, as the FOS argued, it alone had discretion to determine the potential claim unless there was an error of law or it was clear that an irrational decision had been made or whether the court was entitled to consider whether the eligibility requirements were satisfied. Where a tribunal s authority over a claim depends on a set of objective facts being satisfied, it is established that it is for the courts, and not the tribunal itself, to consider whether those precedent facts have been met. The Court held that: (i) it was within its jurisdiction to decide whether the individual was acting as a consumer as a question of precedent fact ; and (ii) on the facts, as a matter of precedent fact Mr Lochner was not a consumer. Alternatively, the FOS had misdirected itself as a matter of law, and had it not done so it would have concluded that the FOS did not have jurisdiction, as at the relevant time the insured was not eligible as a consumer or otherwise. 5  EWHC 3413 (Admin)
8 8 The decision confirms that eligibility to make a complaint to the FOS is a matter of precedent fact which the courts may review, and provides some much-needed clarity regarding the definition of a consumer for this determination. The decision also highlights an avenue for parties such as insurers or brokers to challenge the FOS jurisdiction to entertain complaints regarding D&O policies, based on the eligibility of the complainant. Background Bluefin Insurance Services Ltd ( Bluefin ) acted as a broker for a D&O policy (the Policy ) taken out by Betbroker Ltd ( Betbroker ). The Policy named Mr Wayne Lochner ( Mr Lochner ) as an insured person. The Policy included cover in respect of claims made for management liability of individuals for wrongful acts. A claim was brought against Mr Lochner personally for alleged fraudulent or reckless misrepresentations he made about Betbroker which induced Aberdeen Asset Management to invest approximately 500,000 in Betbroker. The Policy had expired on 8 September 2008, but the claim was brought against Mr Lochner on 7 September The insurer refused cover contending that they had not received any notice of a claim or circumstance likely to give rise to a claim prior to the expiry of the Policy. Mr Lochner stated that he had made Bluefin aware of the potential claim against him prior to the expiration of the Policy, but that this information had not been passed on to the insurer. Mr Lochner made a complaint to the FOS against Bluefin for its alleged failure to pass on this information. The FOS jurisdiction flows from s.226 Financial Services and Markets Act 2000 ( FSMA ) and the delegated legislation made by the Financial Conduct Authority (the FCA ) in the form of the Dispute Resolution: Complaints section of the Financial Services Handbook ( DISP ). The FOS published a decision dated 3 May 2013, which set out a series of findings including: The jurisdiction of the FOS is set out in the Financial Conduct Authority s dispute resolution DISP rules. These rules stipulate exactly what the Financial Ombudsman Service can and cannot consider. The decision proceeded to set out DISP 2.7.3R, which states that an eligible complainant must be a person that is: (i) a consumer and definition of consumer in the Glossary to the FCA Handbook was at the relevant time any natural person acting for purposes outside his trade, business or profession. The FOS concluded that the question was whether Mr Lochner was acting outside his employment when bringing this complaint, and concluded that he was. Bluefin argued that Mr Lochner did not fall within this definition. Relevant issues examined by the Court (a) Is a decision whether Mr Lochner was acting as a consumer an issue of precedent fact for the Court to determine regardless of the FOS assessment? The Court first addressed whether the issue of whether Mr Lochner was acting as a consumer was an issue of precedent fact, such that the Court then has jurisdiction to make a decision on the basis that there is a right or wrong answer (as argued by Bluefin), or whether the issue was reserved for the FOS discretion (as argued by the FOS). The judge agreed with Bluefin on the basis of Lady Hale s judgment in the Supreme Court in R (A) v Croydon London Borough Council 6. While the FOS has compulsory jurisdiction to 6  1 WLR 2557
9 9 further the aim of resolving certain disputes quickly, it still must be shown that the incident case is one to which the compulsory jurisdiction rules apply. The answer to this question would lie in a hard-edged finding of objective fact. It was therefore held that this was a matter of precedent fact for the Court to determine. However, on the hypothetical basis that this was not the case, the Court also assessed whether the FOS had misdirected itself in law. (b) If the issue is for the FOS, did the FOS misdirect itself in law in reaching its decision? Time when assessment of eligibility is to be made The FOS had argued that the correct point in time is the point at which the complainant makes their complaint, while Bluefin argued that the assessment should be made at the earlier time of when the Policy was entered into, or, at the latest, the date of the act or omission which forms the basis of the complaint. On this aspect, the judge agreed with the FOS and held that the correct interpretation under s.226 FSMA was that if the complainant was a consumer at the time of the complaint, then he would be an eligible complainant. Did the FOS incorrectly conclude that Mr Lochner was a consumer? The Court was asked to assess whether, at the time of making the complaint, Mr Lochner was acting for purposes outside his trade, business or profession. Bluefin argued that it does not follow that if the claim is brought personally it is therefore outside the trade, business or profession. The fact that the liability is personal does not make it, without more, consumer liability. Bluefin further argued that Mr Lochner could not have been acting as a consumer, as the alleged wrongdoing was in the course of promoting the business of which he was founder, CEO and shareholder. Distinguishing the Policy from other group policies such as private health insurance, Bluefin argued that whilst those policies covered purely private matters, this Policy only covered an individual against professional or business liabilities. The FOS argued that, given Mr Lochner s spouse was also a beneficiary under the Policy, the question of whether Mr Lochner was a consumer was no different than if she has made the complaint. The FOS argued that the Policy was exactly like a private health insurance policy in that it protected an individual in their private life from liabilities or misfortunes that may, or may not, occur through employment. The judge held that the complaint made by Mr Lochner to the FOS was to obtain redress which would compensate him for the loss sustained by virtue of his being left unprotected under the Policy in respect of loss arising from the Claim for his wrongful acts undertaken in the course of his trade, business or profession. There was no proper basis that the FOS could conclude that the subject matter of Mr Lochner s complaint was outside his trade, business or profession. The judge rejected the analogy made between the Policy and a purely private group insurance policy, because such policies provide protection in respect of the private interests of the members of the scheme. Therefore, as a matter of precedent fact, the judge held that Mr Lochner was not acting as a consumer at the time that the complaint was made. Further, or in the alternative, the FOS had misdirected itself in law when concluding that Mr Lochner was doing so. Mr Lochner was not an eligible complainant. The Court granted an order quashing the FOS decision to entertain the complaint.
10 10 Significance of this decision This decision provides much needed clarity regarding the eligibility of complainants regarding policies, such as D&O policies, which provide a personal benefit to the directors. It also confirms that eligibility issues are ones of precedent fact to be assessed by the Court, to be objectively assessed based on the facts, rather than remaining within the FOS sole discretion. This clarifies the limits to the FOS ability to determine its own jurisdiction. The decision will have importance for parties who are seeking to challenge the scope of the FOS jurisdiction. It could also lead to the FOS being more cautious about entertaining such complaints in the first place.
11 11 Procedure No declaratory relief in relation to noncontracting third parties The Federal Mogul Asbestos Personal Injury Trust v Federal-Mogul Ltd (formerly T&N Plc) & Others 7 High Court, 27 June 2014 The High Court considered the law relating to third parties ability to seek declaratory relief in respect of contractual rights where they are not parties to the contract. This is particularly difficult where the parties to the contract are not themselves in dispute as to their rights or obligations. Here, a trust sought various declarations from the High Court regarding the handling and settlement of the asbestos claims by reinsurers. However, the trust was not a party to either the insurance policy or the reinsurance contract. Background Parties and the insurance policies The claimant in these proceedings was a trust (the Trust ) established by an order of the US Bankruptcy court to deal with asbestos related personal injury claims against Federal-Mogul Ltd ( Federal Mogul ). The history of this matter relates to T&N plc (and its subsidiaries) ( T&N ), which was one of the largest producers and distributors of asbestos and products containing asbestos for much of the 20 th century, and which was subsequently acquired by Federal-Mogul Corporation in T&N was faced with an enormous number of asbestos related personal injury claims. For a period of time, T&N s strategy was to settle the asbestos claims as quickly and cheaply as possible without litigation and it became a member of a joint claims-handling organisation the Center for Claims Resolution ( CCR ) for further costs savings in defending the asbestos claims. By the mid-1990s, T&N shifted its primary business to engineering. In December 1996, T&N put in place an asbestos liability policy (the Policy ) with Curzon Insurance Ltd ( Curzon ) with the aim of drawing a line under the exposure to the asbestos claims and allowing the engineering business to develop unimpaired by that exposure. Curzon ceded liabilities in three equal shares under a reinsurance agreement (the Reinsurance Contract ) to three reinsurers Centre Re (a subsidiary of Zurich Re), EIRC (a subsidiary of Swiss Re), and Munich Re (the Reinsurers ). Insolvency and claims-handling issues The asbestos claims proved to be far in excess of what T&N expected: between 1976 and 2001 T&N resolved 245,000 asbestos claims at a cost of US$835m. By January 2001, the CCR had essentially collapsed and T&N was forced back into the US tort system as a standalone defendant. In October 2001, Federal-Mogul and T&N filed for bankruptcy in the US and went into administration in the UK. In the context of this insolvency, a Plan of Reorganisation (the Plan ) under Chapter 11 of the US Bankruptcy Code was put in place which culminated in the creation of the Trust. The Plan required T&N to grant the Trust a power of attorney to take all necessary and/or appropriate steps to pursue [recoveries] in respect of [the asbestos claims] and do anything else which the [Trust] considers to be necessary or desirable to achieve the purposes (the POA ). The Trust itself established a mechanism for valuing individual asbestos claims in accordance with what were referred to as Trust Distribution Procedures (the TDPs ). The terms of the Policy provided wide scope for asbestos claims-handling to T&N as follows: 7  EWHC 2002 (Comm)
12 12 full, exclusive and absolute authority, discretion and control, which shall be exercised in a businesslike manner in the spirit of good faith and fair dealing, having regard to the legitimate interests of the parties to [the Policy] and of the reinsurers thereof, with respect to the administration, defence and distribution (including but not limited to settlement) of all Asbestos Claims The Policy provided that this claims-handling power would transfer to Curzon in the event that there was an insolvency event in respect of T&N (it was common ground that an insolvency event had occurred). The Policy also stated that the appropriate standard for handling asbestos claims could not be specified completely at its signing date but that T&N was required to specify a standard from time to time. At the time of the inception of the Policy, the CCR s standards were stated in the Policy as being the best practice at the time. The Reinsurance Contract provided that if Curzon became entitled to exercise the asbestos claims-handling power then this power would transfer from Curzon to the Reinsurers. The Trust alleged that the TDPs would ascribe a lower value to asbestos claims than the likely settlement or award values if the claims were litigated in the US tort system and that therefore handling the asbestos claims in accordance with the TDPs was an economic no-brainer and the only business-like approach for the Reinsurers to settle the asbestos claims. On this basis, the Trust sought various declarations which the High Court described as falling into four broad categories: 1) standing of the Trust to claim the declarations; 2) obligations of Curzon/Reinsurers with regard to claims-handling; 3) methodology utilised by the Trust in relation to settlement/discharge of asbestos claims presented by the Trust (including in respect of two specific claims which had been previously settled); and 4) potential limitation issues and the effect of the Plan and its relationship with the Policy. The first two categories are of particular interest and we discuss the High Court s analysis in relation to these further below. Standing of the Trust The High Court came to the conclusion that the Trust did not have standing to seek the declarations in respect of claims-handling obligations either by virtue of having sufficient interest or under the terms of the POA provided by T&N in favour of the Trust. The Reinsurers argued that since the Trust was not a party to the Policy or the Reinsurance Contract it had no standing to interfere with these contractual arrangements. Absent any exceptional circumstances warranting such interference, the principle of privity of contract (preventing a non-contracting third party from claiming contractual rights/obligations) would be undermined. Further, the Reinsurers argued, interference was particularly unwarranted given that there was no dispute between the contracting parties as to the exercise of their rights and that the issue was compounded by the fact that the Trust was seeking to interfere with the exercise of extremely wide contractual powers of discretion. The Trust accepted that it was not a party to the Policy or the Reinsurance Contract. However, the Trust argued that this was not a necessary precondition to granting declaratory relief and that the law had moved on from the Meadows 8 case. The Trust relied on the principles summarised by Aiken LJ in Rolls Royce Plc v Unite the Union 9 in respect of the grant of declaratory re which included the point that the fact that the claimant is not a party to the 8 Meadows Indemnity Co Ltd v Insurance Corp of Ireland Plc  2 Lloyd s Rep 298; which held that it would only be in exceptional circumstances that a party not privy to a contract who had no locus standi would be entitled to obtain a declaration of rights under that contract 9  1 WLR 318
13 13 relevant contract in respect of which a declaration is sought is not fatal to an application for a declaration, provided that it is directly affected by the issue. The High Court agreed that the law had clearly moved on since the Meadows case. However, the High Court accepted the Reinsurers argument that a non-contracting third party cannot obtain declarations in respect of the rights of parties to a contract where those contracting are not themselves in dispute as to their respective rights and obligations. The Trust also argued that it had standing by virtue of the terms of the POA which gave the Trust wide scope to pursue or recover sums for the asbestos claims. The High Court disagreed with this argument. It held that the present dispute related not to what is recoverable but rather to determine the scope of such coverage and what may be recoverable and that it was unlikely that T&N and the Trust had intended the POA to grant the Trust a power to seek declaratory relief from the Court in respect of claims-handling. Claims-handling obligations As a result of the High Court s conclusion on standing, the Trust was not entitled to seek the declarations relating to claims-handling. However, the High Court considered the substantive merits of these declarations in case it was wrong on the issue of standing and concluded, on various grounds, that it would also refuse to grant these declarations on their merits. In particular, the High Court concluded that the wording of the Policy and the Reinsurance Contract which, following T&N s insolvency, granted wide discretion to the Reinsurers in terms of claims-handling (i.e. full, exclusive and absolute authority, discretion and control to be exercised in a businesslike manner) was incompatible with the Trust s suggestion that it was entitled to limit the Reinsurers exercise of these contractual rights. The Reinsurers broad contractual rights as to claims-handling were caveated in that they must be exercised in a businesslike manner (as well as in good faith and fair dealing and with regard to legitimate interests). The Trust s TDPs were not the only businesslike manner for handling claims and there is no monopoly on what may be businesslike. Mesothelioma claim allowed despite prior settlement with other employers Dowdall v William Kenyon & Sons Ltd 10 High Court, 12 August 2014 The Court held that the claimant, who had previously settled a claim arising from asbestosis against seven of his 11 former employers, was not precluded from now pursuing a new personal injury claim against the remaining three employers (one was irrelevant), in respect of the development of mesothelioma. The case is important because it raises uncertainty over settlement agreements and orders in hundreds of asbestos cases brought in the last 20 years. Defendants who were previously sued for damages arising from exposure to asbestos may now be liable for a further contribution from other employers when the condition develops into mesothelioma. Background The claimant was exposed to asbestos by 10 employers over a long period of time. In 1998 he was diagnosed with asbestos and pleural plaque with a 15-20% level of disability. In 2001, he brought an action for damages against seven of his 10 former employers in respect of asbestosis, pleural plaque and for the risk of developing mesothelioma (the First Action ). The claim was settled in 2003 for 26,000 (the First Settlement ). It is important to note that, in 10  EWHC 2822 (QB)