Litigation Recent Decisions 27/08/96'

Follow the settlements' clause in reinsurance. Decisions are taken from Lawtel's legal database. TLR: Times Law Reports; ILR: Independent Law Reports; LTL: Lawtel; WLR: Weekly Law Reports.Berry & ors v Mercantile and General Reinsurance Co; Hill & anor v Mercantile and General Reinsurance Co (1996).

HL (Lords Mackay LC, Goff, Mustill, Slynn and Hoffmann) 24/7/96.

Summary: Before a 'follow the settlements' clause in a reinsurance contract can be applied the clause must be read, considered and then applied to the special facts of the case. Order for summary judgment set aside.

Two appeals by excess loss insurer against the entry of summary judgment CA 7/7/94 (TLR 25/7/94) requiring the appellant to follow the settlement made by the insurer in four sets of contracts between Kuwait Airways Corporation (KAC) and a number of Kuwaiti insurance companies whereby the latter insured KAC against loss or damage to 15 aircraft from 1/7/90 to 30/6/91. Following the invasion of Kuwait, seven of the aircraft were lost while they were on-risk under direct contracts.