UK COURT HOLDS THAT REINSURANCE BROKERS OWE A CONTINUING DUTY TO THEIR REINSUREDS; TIME-BARRED DEFENSE NO LONGER PACKS A PUNCH
Resolving a dispute between a reinsured and its reinsurance broker, the UK Commercial Court has held that reinsurance brokers owe a continuing duty to remit money received from reinsurers to their reinsureds. The reinsurance broker conceded that it breached its duty, but argued that the first breach was more than six years (the limitations period) before the litigation was commenced and that the claims are time-barred. The reinsured argued, and the High Court agreed, that the reinsurance broker’s duty is continuous, such that a “fresh cause of action arose on each day when [the broker] failed to make a remittance which it ought to have made.” Equitas Ltd. v. Walsham Bros. & Co., [2013] EWHC (Comm) 3264 (Eng.).
This post written by Abigail Kortz.
See our disclaimer.
