[2009] EWHC 2787 (Comm)

Alistair Schaff Q.C. and Simon Kerr acted in these actions concerning claims by the Claimant (“Equitas”), as assignee of the rights of Lloyd’s Syndicates (“the syndicates”), under various contracts of retrocessional excess of loss (“XL”) reinsurance (“the reinsurance contracts”), written by the Defendants (“R&Q” and “Ace” respectively) within the London Market Excess of Loss (“LMX”) spiral.

Given the sensible agreement of the parties to hiving off various matters of detail, this trial is squarely focussed on the issue which arises in the R&Q action: namely, whether the fact that, initially, the (LMX) market wrongly (1) aggregated certain losses; and (2) included irrecoverable losses, precludes Equitas from recovering under the reinsurance contracts for otherwise (potentially) recoverable losses thus “tainted” – absent an ability to replicate the LMX spiral at each level without the introduction of the wrongly aggregated and irrecoverable elements. It is common ground that Equitas has not sought to replicate or reconstruct the LMX spiral in this fashion and realistically common ground that it is (at least) now impossible to do so.