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Switzerland: Supreme Court Decision Concerning Lloyd's Underwriters

By Lloyd's International Trading Advice.
18 May 2016 

Purpose

This article informs managing agents of a Supreme Court decision in Switzerland that may impact litigation involving Lloyd’s underwriters in the future.

Background

The decision in Supreme Court case BGE 4A_116/2015 in Switzerland on 9 November 2015 means that litigation involving underwriters of a syndicate must list the name and address of each individual and corporate member of that syndicate in the legal proceedings.

The legal case related to a claim by underwriters of a Lloyd’s syndicate, together with a non-Lloyd’s co-insurer, against another non-Lloyd’s co-insurer in respect of a loss at a power plant. The plaintiff had presented itself as "Lloyd's Underwriters, London (subscribing to policy no. xxx)" in the legal proceedings. The Supreme Court found that although this naming format is correct in principle, it is procedurally insufficient because under Article 221 of the Swiss Code of Civil Procedure each party to a legal action must be designated in a manner that leaves no doubt with regard to their identity.

Implications for Lloyd’s managing agents

The implication of this requirement for litigation involving underwriters of a syndicate is that the name and address of each individual and corporate member of that syndicate has to be listed in the legal proceedings. The Supreme Court found that the identification of the relevant underwriters was not possible from the naming format used in this particular action and as a result it dismissed the case.

Although this Supreme Court decision relates to a case where Lloyd’s underwriters were a plaintiff, it sets a precedent that may be used by other Swiss courts in cases where Lloyd’s underwriters are a defendant.

Lloyd’s will engage with the Swiss authorities to seek a remedy, however in the meantime if a managing agent has a query about how underwriters should be named in litigation before a Swiss court, Lloyd’s recommends that it refers to the Supreme Court judgment and obtains its own legal advice if necessary. Lloyd’s legal department is willing to provide details of the members of a syndicate to the relevant managing agent if requested to do so.

If Lloyd’s brokers, coverholders or OMCs have a query about this matter they should contact the compliance department of the relevant managing agent of the case concerned.

Please cascade this information within your organisation as necessary. If you have any further questions, please contact the Lloyd’s International Trading Advice team.

Lloyd's International Trading Advice
Primary point of contact for advice and information on Lloyd's trading status worldwide.

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