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Jurisdictional issues in liability insurance

Jurisdictional issues in liability insurance. Presented by Silvan A. Said Gulf Insurance Institute. Systems of Law. Civil Law Common Law Shar íah. Civil Code.

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Jurisdictional issues in liability insurance

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  1. Jurisdictional issues in liability insurance Presented by Silvan A. Said Gulf Insurance Institute

  2. Systems of Law • Civil Law • Common Law • Sharíah

  3. Civil Code • Provides all citizens with an accessible and written collection of laws which judges must follow. Civil Law is inspired by Roman Law • Colonial expansion spread the civil law system and European civil law has been adopted in much of Latin America as well as in parts of Asia and Africa. • Liability is therefore determined by the application of the written law enacted by the lawmakers by judges.

  4. Common Law • Common law is case law developed by judges through decisions of courts rather than through enacted laws and statutes. • started in the middle Ages in England and has spread where there the legal influence of the British Empire. • Liability depends on a combination of legal precedence as well as judge’s decisions on new legal issues as they arise.

  5. Shar'iah • controls, rules and regulates all public and private behaviour • It can be used as guide for how an individual acts in society and how one group interacts with another. • The Shar'iahLaw can be used to settle border disputes between nations or within nations.

  6. Legal Systems of the world Source: wikipedia

  7. Liabilities arising under Tort • Deterrence or Compensation ? • Deterrence : courts seek to separate the existence of insurance from the liability of the tortfeasor. E.g. In The UK common law system, judges do not consider the mere fact that the defendant is insured as any bearing on liability. • Compensation: the question of liability becomes irrelevant and the tort system is used to shift the economic burden from one individual of society to the insurance pool where all society contributes. This is notably prevalent in Scandinavian and other EU countries

  8. Liabilities arising from Statute • Law makers generally enact statutes to increase awareness for safety and prevent accidents. • Different impact of such statutes on liability insurance • Imposition of Strict Liability • Default may lead to evidence of negligence • Companies may need coverage for fines and penalties arising from accidental breach.

  9. No Fault Liability • Abolition of liability in tort and of its insurance in favour of direct insurance of victims against losses. • Popular in medical malpractice • Reduces the deterrent effect – attempts to replace this with administrative fines and penalties • Gained momentum in the ‘70s and ’80s, in recent years governments have been wary of expanding further and the time tested system of fault and liability prevails.

  10. Shar'iah • Qesas Crimes and Diya (Blood Money) • A person committing Qesas crime will be punished according to the Quranic teachings on that particular crime • Under Qesas, the victim or victim’s relatives have right to seek retribution and retaliation • This system is analogous to liability under common law where the fault and the amounts are usually determined by a shar’iah court

  11. Indemnity Limits • One of the most problematic areas for insurers • Limits of indemnity have to provide sufficient cover but depend on various factors, including the, standard of living, GDP and life expectancy of victims of the country in which the award is made. • Limits of indemnity can also be affected by legislation

  12. Damages • Types of damages that can be awarded • Special damages • General damages • Treatment of Non Pecuniary Damages • Punitive damages

  13. Which Jurisdiction? • In some cases, litigants may have a choice of jurisdiction where a case is heard. • Defendants and plaintiffs will attempt to secure the jurisdiction that they feel will be more sympathetic to their case. • This is also known as “Forum Shopping” or court shopping. • Choice of jurisdiction depends on: • Presence of defendant or plaintiff at the time of accident • Domiciles of the party • Where the event occurred

  14. Which Jurisdiction? • Effects of Globalisation increases opportunity to forum shopping • Global trade • Familiarity with other legal systems and culture • Internet and Electronic commerce • Propensity of large awards under American legal system of fees based on the awards.

  15. Which Jurisdiction? • Attempts to reduce opportunities for forum shopping. • Outlook of the courts • National laws • International Conventions (2005 Hague convention of Choice of Courts Agreement)

  16. Thank You

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