In this final post in our Hunton & Williams Bermuda Form Arbitration Series, we discuss case law involving the Bermuda Form. As explained in a prior post, the Bermuda Form includes an arbitration clause specifying that disputes be submitted to arbitration in London under the English Arbitration Act, but applying the substantive law of New York. The natural consequence of this arbitration provision is that reported decisions analyzing the substantive provisions of the Bermuda Form are few and far between. Little binding precedent has developed—or will develop—regarding interpretation of the Bermuda Form given that awards are issued in confidential arbitration proceedings. Nonetheless, several decisions in England and the United States offer insight into the handling and resolution of disputes involving Bermuda Form policies.
As explained in a prior post in the Blog’s Bermuda Form Arbitration Series, some time after the final hearing, the arbitration tribunal will issue an Award. This post focuses on challenges to and enforcement of that Award.
A prior post in the Blog’s Bermuda Form Arbitration Series discussed several strategic considerations for the discovery and briefing stages of Bermuda Form arbitrations. This post focuses on the final stages of arbitration: The final hearing, and awards of interest and costs.
* * *
The Final Hearing
The presentation of evidence in the “final hearing” of a London arbitration differs substantially from traditional trial practice in the United States. A party’s direct or affirmative evidence is presented in writing in witness statements. Witnesses are presented live only for cross-examination. A party should offer all its witnesses for cross-examination; if a party does not do so, it risks that the arbitrators will not give a witness’s direct evidence much weight. This rule does not apply if the parties agree that a witness need not be presented for cross-examination. Continue Reading Bermuda Form Insurance Arbitration Series: The Final Hearing, and Interest and Costs Awards
A prior post in the Blog’s Bermuda Form Arbitration Series discussed several strategic considerations for London arbitrations involving the Bermuda Form, including considerations for initiating the arbitration, selection of arbitrators, and selection of counsel. This post focuses on strategic considerations for the discovery and briefing stages of London arbitrations.
In this post in the Blog’s Bermuda Form Insurance Arbitration Series, we discuss the use of London-based arbitration to resolve disputes involving the Bermuda Form.
In this post in the Blog’s Bermuda Form Insurance Arbitration Series, we discuss additional features of the Bermuda Form that policyholders should take into consideration.
In this post in the Blog’s Bermuda Form Insurance Arbitration Series, we discuss some key features of the Bermuda Form that policyholders should take into consideration.
The commercial insurance programs of many multi-national and United States businesses include “Bermuda Form” policies, a special policy form developed in Bermuda in the mid-1980s that includes unique provisions and provides for arbitration of disputes, usually in London under the substantive law of New York. These provisions provide challenges for United States policyholders and “stack the deck” in favor of the insurance companies that are repeat players in “Bermuda Form arbitrations.” Policyholders should carefully consider purchase of Bermuda Form policies and ensure that they are structured as favorably as possible for the policyholder. Presentation of claims under Bermuda Form policies can present special challenges. Therefore, if claims arise, policyholders should consult counsel with expertise with Bermuda Form policies to ensure that the claim is presented with an eye toward the unique definition of “occurrence” and other provisions included in Bermuda Form policies.
With Brexit approaching in March 2019, uncertainty remains over whether Britain and Brussels will reach an agreement to ensure that UK insurers can continue to pay out on policies after Britain leaves the European Union. The uncertainty tied to Brexit serves as a broader warning to policyholders about the potential pitfalls that can occur when large-scale political or economic change occurs, and how that change can impact an insurer’s indemnity obligations under a pre-existing contract. In the case of Brexit, it remains unclear whether UK and EU regulators will permit the transfer of existing contracts across borders, or whether they will permit a contract formed and regulated under the rubric of one economic area to suddenly be governed by another. Although procedures do exist for the transfer of policies from one insurer to another, the cost of such a transfer is substantial – roughly £1 million ($1.3 million). Pre-Brexit, the UK saw about 20 such transfers per year. Reports suggest that number could increase ten-fold, with the expense to eventually be passed down to policyholders. With increased secession movements around the world in recent years (e.g., Crimea, Catalonia, Scotland, etc.), the insurance ramification of such changes ought to be considered by companies and insurers doing business or insuring business interests in such regions.
Obscured by the recent hurricanes ravaging the Caribbean, Florida and Texas, Mexico suffered its own natural disaster earlier this week with a 7.1 magnitude earthquake. Our hearts and prayers go out to those affected by the quake.