Standard of proof for “follow the settlement” provisions

In a decision late last year the English High Court confirmed that the relevant standard of proof for “follow the settlement” type provisions is arguability rather than balance of probabilities: Tokyo Marine Insurance Ltd v Novae Corporate Underwriting Ltd [2013] EWHC 3362.

Justice Hamblen held that he was bound by earlier Court of Appeal authority on the topic.

It is understood that the case is under appeal.

The outcome of the appeal will be of interest to any lawyer or litigant currently involved in a New Zealand reinsurance dispute.

Traditionally, there have been very few cases involving reinsurance in the New Zealand Courts. The Canterbury earthquakes changed all that, with several reinsurance cases being reported in 2013  (each linked to an arbitration context).

Toyko Marine concerned retrocession insurance, i.e., the insurance of reinsurance, but the principle under scrutiny will be applicable to relevant reinsurance disputes.

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