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PRACTICE NOTES
Arbitrations arising from insurance and reinsurance disputes share many common features with other types of commercial arbitration but have some distinctive features. This Practice Note covers the distinctive features of insurance and reinsurance arbitrations and provides guidance on arbitral procedure and tactics in an insurance and reinsurance context. For information of the types of insurance arbitration, including ad hoc arbitration, institutional arbitration and Bermuda Form arbitrations, see: Understanding institutional and ad hoc arbitration—overview and Practice Note: Insurance and reinsurance arbitration—an introduction. Distinctive features of insurance arbitrations Common distinctive features of insurance arbitration, considered in more detail below, include: • multiple arbitrations on similar facts, which can raise issues concerning: ◦ appointment of arbitrators ◦ consolidation of proceedings ◦ disclosure of information obtained in one set of proceedings in another ◦ a potential imbalance of information relating to the facts of the underlying dispute between the insured and the insurer. Often the insured is better placed to have knowledge of the circumstances of a loss and possesses more of the relevant documents.
PRACTICE NOTES
This Practice Note considers claims for a contribution under the Civil Liability (Contribution) Act 1978 (CL(C)A 1978) as to: • when and how it may apply • who can bring a claim under CL(C)A 1978 • the requirement for ‘same damage’ • CL(C)A 1978 and debt claims • the exclusion of costs-only claims from the ambit of CL(C)A 1978 For guidance on issues of jurisdiction, limitation, settlement of the primary claim, the impact of liability exclusion and limitation clauses and practical considerations on bringing a contribution claim, see Practice Note: Civil Liability Contribution Act claims—apportionment, settlement, operational impact. For a quick summary guide of the key considerations in contribution claims, see: Contribution claims key considerations—checklist. In this Practice Note the following terms are used: • C—means the claimant in the original (primary) claim who has suffered the damage for which remedy is sought • D1, D2, D3 etc—means the defendants against any of whom C can bring the original (primary) claim • primary claim—means the original
NEWS
This week's edition of Dispute Resolution weekly highlights includes: analysis of a number of key DR developments and key judicial decisions including the Courts and Tribunals Judiciary’s publication of its updated guidance on Artificial Intelligence and the Court of Appeal decision in Lakatamia Shipping v Su (freezing injunctions); dates for your diary; details of our most recently published content; and other information of general interest to dispute resolution practitioners.
PRACTICE NOTES
This Practice Note provides guidance in relation to sanction clauses in insurance policies. It explains the effect of sanctions and the purpose of sanctions clauses in the context of insurance. It also provides guidance on drafting sanctions clauses and commentary on the widely used Lloyd's Market Association (LMA) sanction clauses. The Practice Note entitled UK financial and trade sanctions for insurers outlines the sanctions applicable to insurers, the nature of those sanctions, the role of the Financial Conduct Authority, and screening and due diligence for insurers to adopt. Lloyd's Market Association Sanctions Clauses Much of the focus of this Practice Note will be on the market standard wording: the LMA 3100A clause (LMA 3100A) and the LMA 3200 clause (LMA 3200). These were introduced in October 2023 following an LMA consultation on the LMA 3100 clause, which was first issued in 2010. LMA 3100A adopts the same wording as provided for by LMA 3100 but the title was amended by removing the words ‘and exclusion’ to better reflect that
PRACTICE NOTES
It makes good business sense for your firm to seek to limit the extent of its liability to clients. However, there are regulatory and legal hurdles to clear and restrictions on what a liability cap can achieve. In the case of consumer clients, you must bear in mind not only SRA requirements and guidance, but also statutory restrictions in the Consumer Rights Act 2015 (CRA 2015). SRA restrictions You must not exclude or attempt to exclude liability below the minimum level of cover required by the SRA Indemnity Insurance Rules. This is: • £3m for firms that are corporate entities (including LLPs) • £2m for partnerships and sole practitioners (excluding LLPs) SRA guidance You should bear in mind guidance published by the SRA. The guidance is on the requirement to take out and maintain adequate and appropriate insurance under the SRA Indemnity Insurance Rules, but also includes a section on capping your liability to clients. Whenever you seek to cap your liability to clients, you should consider your duty: • not to abuse your position
PRACTICE NOTES
EU Methane Regulation—introduction On 14 October 2020, the Commission published the EU Methane Strategy, with the stated aim of curbing temperature pathways to 2050 and improving air quality. The strategy focuses on the reduction of methane emissions in the energy, agriculture and waste sectors, as these areas account for almost the entirety of anthropogenic methane emissions.  Further to commitments made in the EU Methane Strategy, the Commission adopted a proposal for a new regulation governing methane emissions on 15 December 2021. The resulting Regulation (EU) 2024/1787 of the European Parliament and of the Council of 13 June 2024 on the reduction of methane emissions in the energy sector (the EU Methane Regulation) was published in the Official Journal on 15 July 2024. It entered into force on 4 August 2024. The EU Methane Regulation sets out rules on the following for the fossil energy sector: • monitoring, verification, and reporting of methane emissions, as well as on transparency with respect to this data • reduction of methane emissions, including
GLOSSARY
An activity schedule with each activity priced. The total of the activities equates to the contract sum.
PRACTICE NOTES
ARCHIVED: This archived Practice Note is drafted in the context of the previous/old Electronic Communications Code (the previous Code) (and highlights drafting points and due diligence where a property may be subject to telecommunications leases under the previous Code), but the contents remain relevant for the purposes of the transitional provisions set out in the new Code. It is not maintained and is for background information purposes only. The new Code (under Schedule 3A, Part 1 to the Communications Act 2003) came into force on 28 December 2017. The transitional provisions in the new Code, set out in Schedule 2 to the Digital Economy Act 2017, provide that while subsisting agreements under the previous Code (ie an agreement under paragraph 2 or 3 or a court order granting Code rights under paragraph 5 of the previous Code) will continue to have effect as an agreement under the new Code, this is subject to modifications, including in relation to termination in respect of certain subsisting agreements. The transitional
PRACTICE NOTES
Introduction Wind energy has been instrumental in facilitating the transition in energy generation from fossil fuels to renewable sources. Compared to other forms of renewable energy generation, onshore wind is generally low cost and has dramatically reduced in cost over the last ten years, with a recent study from the International Renewable Energy Agency (IRENA) suggesting that the levelised cost of onshore wind electricity generation fell 69% between 2010 and 2022. Furthermore, when compared with offshore wind turbines which must handle higher wind speeds and require underwater installation and maintenance, onshore wind turbines are viewed as relatively ‘low tech’ and simple to install. For these reasons, onshore wind is one of the most widely deployed forms of renewable energy generation, with a mature global market that in 2023 boasted over 940GW of capacity spread across developed and developing countries in five continents. Notably, offshore wind, with a global capacity of only 72GW across three continents, pales in comparison to the more developed onshore
NEWS
Dispute Resolution analysis: Successful summary judgment application in the Commercial Court concerning an exclusive licence agreement under which minimum royalties were payable. The claimant licensor sought judgment for a discrete US$635,810 sum said to have been acknowledged as payable following termination for non-payment. The defendant licensee resisted on the basis of a misrepresentation/rescission case advanced in its Defence and Counterclaim, also bringing a reverse summary judgment application seeking declaratory relief on the construction of the renewal/term and minimum royalty provisions. The court entered judgment for the claimant and dismissed the defendant’s reverse summary judgment application. Written by Alexander Whatley, barrister at Gatehouse Chambers.
PRACTICE NOTES
This Practice Note introduces the Istanbul Arbitration Centre (ISTAC), the role of the ISTAC’s governing bodies in the administration of arbitrations, the ISTAC Arbitration Rules (ISTAC Rules) and the ISTAC Mediation-Arbitration Rules (ISTAC Med-Arb Rules). Established in 2015, the ISTAC provides a comprehensive and flexible arbitration framework for resolving both domestic and international disputes. The ISTAC Arbitration Rules, based on international best practices, ensure efficiency, impartiality, and confidentiality. The ISTAC Rules offer practical solutions for a wide range of disputes and are recognised for their flexibility, expedited processes, and cost-effectiveness. Since 2019, ISTAC has also offered Med-Arb as a dispute resolution mechanism, introducing as the first set of rules in the world specifically designed for the combined use of mediation and arbitration. Introduction to the ISTAC In general The ISTAC is an independent institution offering arbitration and mediation services to international and domestic parties. Its services are available to all entities and individuals, regardless of membership, making it an accessible forum for resolving
PRECEDENTS
This Agreement is made on [date]. Parties 1 [insert name of Customer] [of OR a company incorporated in [England and Wales] under number [insert registered number] whose registered office is at [insert address]] (Customer); and 2 [insert name of Supplier] [of OR a company incorporated in [England and Wales] under number [insert registered number] whose registered office is at] [insert address] (Supplier) (each of the Supplier and the Customer being a party and together the Supplier and the Customer are the parties). Background (A) The Customer conducts the business of [insert description]. (B) The Supplier conducts the business of supplying [insert description of services] to other businesses. (C) The parties have agreed that the Supplier shall supply services to the Customer and its Affiliates under individual services contracts entered into between the Customer or any of its Affiliates and the Supplier from time to time. (D) The parties wish to set out in this Agreement the terms under which the individual services contracts shall be entered into. The parties agree: 1 Definitions and interpretation 1.1 In this Agreement: Affiliate • means any entity that directly or indirectly Controls, is Controlled by, or is under common