Law and Jurisdiction - Dodging the triple trigger

Faraday Reinsurance Co Ltd v. Howden North America Inc & Anor [2011]

Commercial Court 1 November 2011

Much has been written about the House of Lords decision in Wasa v Lexington [2009]. Underlying the dispute in that case was the differing attitude between English law and that of many US states in relation to the indemnity trigger under occurrence based insurance. Under English law, insurers simply cannot be liable for loss, damage or injury actually occurring outside the period insured. In the context of mesothelioma claims, the relevant "occurrence" for these purposes is the moment when the claimant becomes fatally ill (Bolton v Municipal Mutual [2006]). By contrast, many US states look backwards through the prior period of exposure to the conditions that gave rise to the illness, and indeed forwards to the point when the relevant illness became manifest. What results is a continuous or "triple" trigger of liability, spanning multiple policy years. Moreover, many of those same states also impose a joint and several liability between the various policies impacted, with the result that the insured may sue any one of them for the full amount of the loss, even though the overall period of occurrence extends well beyond that insured.

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Lawyers James Crabtree, Susannah Wakefield