Insurance Litigation 2024

Global Overview – Insurance Litigation 2024

In this Chambers guide, insurance litigation includes disputes to which insurers or reinsurers are directly party, such as coverage disputes, as well as disputes in which they are not named but have a financial interest as indemnifiers of one or more parties. Thus, the guide addresses not only laws governing insurance contracts but extends to issues such as how litigation is funded and other relevant aspects of dispute resolution in each jurisdiction which may particularly impact insurers. Arbitration continues to grow in importance due to the widespread use of arbitration clauses in policies, which affords parties privacy and avoids precedents being set. Discussion of case law is therefore unavoidably of limited relevance to what may be a “true picture” of dispute outcomes.

Long-term issues

In recent previous editions of this guide, our overview has noted the ongoing litigation legacy of COVID-19, the rise of “ERG” issues, a rise in substantial employment liability compensation by financial institutions, the long-term rise in cyber exposures and claims inflation. All these trends remain live, with climate litigation in particular likely to be increasingly prominent in the courts in the next few years. We could add to those the ongoing growth of litigation funding, as potential claimants rely on third parties to bring claims that would otherwise not be viable, often in a group litigation context. The growth of such claims has been marked in the UK (where opt-out claims may be brought in the Competition Appeal Tribunal), notwithstanding the decision in PACCAR Inc and others v Competition Appeal Tribunal, which led to swift amendments to multiple Litigation Funding Agreements to avoid potential enforceability concerns and prospective legislation by the UK government to ensure the continued viability of such funding to protect access to justice. Many businesses may be concerned that such funding can serve to promote costly litigation to the benefit of funders and lawyers where quicker and more cost-effective alternative solutions might be available to provide redress to consumers and others. Litigation funding nevertheless looks set to grow on the basis that it is attractive to certain investors and can be argued to help provide access to justice. This includes in the EU, which in coming years will see the transposition across member states of its Representative Actions Directive. Litigation funding (and forum shopping) look set to grow significantly as a result in at least some member states.

What next for insurance litigation?

Litigation volumes are often said respond to the overall health of the economy in a countercyclical fashion, with a lag before matters reach court. Pending the next major recession or economic shock, what seems clear is that claims that test the boundaries of the law will grow, often pioneered in the US, testing for example whether social media is “addictive” to the under-aged and whether AI tools that scrape colossal amounts of data from the internet infringe copyright or other IP rights. Notwithstanding the close attention insurers give to emerging risks, such litigation has growing potential to test policy coverage in ways that may blindside them.   

Conclusion

As we always emphasise, while we may observe global trends, disputes are usually local and are resolved under widely varying rules that are particular to the forums in which the disputes are heard. We therefore trust that this guide will remain useful to anyone interested in disputes in which insurers have an interest.