This briefing note reviews the House of Lords decision in Wasa v Lexington, in which the the reinsurers' appeal was allowed. In a decision likely to be welcomed by London market reinsurers, the Lords held that although the the normal commercial purpose of proportional facultative reinsurance policies is to provide "back to back" cover with the direct policy, where the contracts are governed by different laws, it remains a question of construction of both contracts as to what risk is assumed.
Authored by Joanne Jolly and Tracey Anderson of the London office of Barlow Lyde & Gilbert, the full article can be downloaded by clicking this link.