English and American Insurance Company Ltd v AXA Re SA [2006] EWHC 3323 (Comm) (20 December 2006)

English and American Insurance Company Ltd v AXA Re SA [2006] EWHC 3323 (Comm) (20 December 2006)

The court held that the letters from Axa were not protected by without prejudice privilege and were admissible as open offers. The court found that EAIC's settlement with Dow Corning, at least as to the paid claims portion, constituted a settlement within the meaning of the 'follow the settlements' clause. EAIC had acted honestly and businesslike in reaching the settlement, and Axa had no realistic prospect of defending the claim for the paid claims amount. Summary judgment was granted for US$ 673,808 plus interest, but not for the IBNR portion.

Citation
[2006] EWHC 3323 (Comm)
Parties
Claimant: English and American Insurance Company Ltd (in a scheme of arrangement); Defendant: Axa Re SA
Jurisdiction
England and Wales
Judgment Date
20 December 2006
Procedural Posture
Commercial Court Claim for Summary Judgment and Evidentiary Strike Out / Summary Judgment Application and Application to Strike Out Evidence
Outcome
Summary judgment granted in part for the claimant.
Legal Topics
Summary Judgment, Follow the Settlements Clause, Without Prejudice Privilege, Scheme of Arrangement, Reinsurance Liability, Businesslike Settlement, Estoppel, Admissibility of Evidence
Insurance Law Reinsurance Law Civil Procedure Summary Judgment Follow the Settlements Clause Without Prejudice Privilege Scheme of Arrangement Reinsurance Liability +3 more

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Parties

English and American Insurance Company Ltd (in a scheme of arrangement)

Claimant

Axa Re SA

Defendant

Procedural Posture

Commercial Court Claim for Summary Judgment and Evidentiary Strike Out / Summary Judgment Application and Application to Strike Out Evidence

Legal Issues

  1. 1 Whether the defendant is liable under reinsurance contracts to indemnify the claimant for sums paid under a scheme of arrangement reflecting a market settlement (LMSA) with Dow Corning.
  2. 2 Whether certain correspondence and offers are admissible or protected by without prejudice privilege.
  3. 3 Whether the claimant's settlement with Dow Corning constitutes a settlement triggering the 'follow the settlements' clause in the reinsurance contracts.

Ratio Decidendi

The court held that the letters from Axa were not protected by without prejudice privilege and were admissible as open offers. The court found that EAIC's settlement with Dow Corning, at least as to the paid claims portion, constituted a settlement within the meaning of the 'follow the settlements' clause. EAIC had acted honestly and businesslike in reaching the settlement, and Axa had no realistic prospect of defending the claim for the paid claims amount. Summary judgment was granted for US$ 673,808 plus interest, but not for the IBNR portion.

Court Disposition

Summary judgment granted in part for the claimant.

Orders

  • Summary judgment for EAIC in the sum of US$ 673,808 plus interest from 29 January 2002.
  • Application to strike out evidence dismissed.