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Following risk management association Airmic’s publication of a guide and model wording on 11 June 2013, with the aim of encouraging insurers to remove basis clauses from their policies, the Lloyd’s Market Association (LMA) has expressed support for the idea. Basis clauses, no longer permitted in consumer insurance contracts, have the effect of voiding the policy if the proposal form is inaccurate in any way, even if this is unintentional and does not affect the risk. …
Read More UK: LMA Supports Proposals to Remove Basis Clauses

In the conjoined cases of Beijing Jianlong Heavy Industry Group v Golden Ocean Group and Beijing Jianlong Heavy Industry Group v Ship Finance International Ltd [2013] EWHC 1063, Judge Mackie QC held that arbitration clauses which were included in certain guarantee contracts were enforceable, even if the guarantees themselves might be unenforceable. …
Read More UK: English High Court Rules on Separability of Arbitration Agreements

In Bank Mellat v Her Majesty’s Treasury (No. 2) [2013] UKSC 39, the UK Supreme Court, by a majority of 5 to 4, allowed an appeal by Bank Mellat, a major Iranian commercial bank, from a Court of Appeal decision in relation to a direction made by the UK Treasury under Schedule 7 of the Counter-Terrorism Act 2008 preventing persons operating in the financial sector from having any commercial dealings with the bank. …
Read More UK: UK Direction Against Major Iranian Bank, Bank Mellat, Ruled Unlawful by Supreme Court

The FCA has issued its first fine for breaches of client asset rules under the new penalty regime. The fine was imposed on 11 June 2013 on retail investment and capital markets firm Xcap Securities PLC for failing to arrange adequate protection for clients’ assets. In particular, Xcap were found to have failed to segregate client and firm money properly, to maintain accurate records of client money and assets, and to carry out accurate client money reconciliations. …
Read More FCA Issues First Fine for Client Asset Breaches Under New Penalty Regime

On 7 June 2013, the FCA published the report on its thematic review of motor legal expenses insurance (MLEI). MLEI provides cover for legal expenses incurred when a not-at-fault policyholder tries to recover uninsured losses from the driver who caused the accident. Some policies also provide cover for criminal defence costs where a policyholder is facing prosecution. …
Read More UK: FCA Publishes Report on Thematic Motor Legal Expenses Insurance Project

In Mutual Holdings (Bermuda) Limited and others (“the Mutual Group”) v Diane Hendricks and others (“Mr and Mrs Hendricks”) [2013] UKPC 13, the Privy Council found that the Court of Appeal of Bermuda was not justified in making findings of fraud and overturning the judgment of the trial judge. …
Read More UK: High Thresholds for Fraud and for Overturning a Finding of Fact by a Trial Judge

On 13 May 2013, HM Treasury published the response to its further consultation on the transposition into UK law of the Alternative Investment Fund Managers Directive. Published with the response were the amended regulations, representing the near-final draft form of the regulations as the Treasury plans to implement them. …
Read More HM Treasury Publishes Amended Draft Regulations for the Alternative Investment Fund Managers Directive