Wasa Run-off wins "follow the settlements" case

On 25 April 2007 the commercial Court in London delivered judgment for Wasa Run-Off in a landmark case concerning the interpretation of “follow the settlements” clause in reinsurance contracts.

Addleshaw Goddard acted for the successful claimant, Wasa International Insurance Company in proceedings against its reinsured, Lexington Insurance. WASA sought a declaration that it was not liable to indemnify Lexington in respect of a settlement that Lexington had entered into with its own insured, the Aluminum Company of America for the cost of remedying pollution and environmental damage at numerous sites across the US.

The case marks a welcome development for reinsurers and provides clarification on a point of law on which there was previously no legal precedent, says Charlotte Boij, CEO of Wasa Run-Off.