[1998] Lloyd’s Rep IR 421, [1996] L.R.L.R. 265

David Bailey – Reinsurance – fs clause – proper and business like steps – time on risk

Facultative reinsurance contracts – Legal liability – Excess – Construction – Terms to be implied – Reinsurance of ports liability – Damage caused by groups of individuals over 18 months – Whether reinsurance contracts provided that loss or damage which arose over period spanning more than one period of insurance under underlying policy was to be treated for purposes of determining amount of reinsurers liability either: (i) by reducing reinsureds liability under underlying policy by amount of excess applicable in respect of each year and then apportioning resulting figure on “time on risk basis” between periods of insurance over which such loss and damage had occurred, or (ii) by apportioning reinsureds liability under underlying policy on “time on risk basis” between periods of insurance over which such loss and damage had occurred and then reducing resulting figures by amount of excess applicable in respect of each year.