Expanding Our Reach: Exploring the Role of ARIAS in Non-Reinsurance Disputes

Expanding Our Reach:

Exploring the Role of ARIAS in Non-Reinsurance Disputes

2017 ARIAS·U .S . Fall Conference

November 2-3, 2017
New York Marriott Marquis

Conference Program Materials

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 ARIAS•U.S. 2017 Fall Conference

Table of Contents
General Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Conference Detailed Schedule. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Faculty Biographies. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Session Materials. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Thursday, November 2, 2017
GENERAL SESSION: Through the Looking Glass – Insurance Company Perspectives
on Policyholder Arbitration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Writing Arbitration Clauses to Get the Arbitration You Want . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
BREAKOUT SESSIONS:
All Sums vs. ProRata – An Insider ’s Guide to a Hotly Disputed Issue. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
In the Matter of VIKING PUMP, INC., et al., Insurance Appeals. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .27
Arbitrating and Managing Small Disputes Cost-Effectively: Strategies for Arbitrators, Counsel,
and Company Representatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
ARIAS•U.S. Streamlined Rules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
The AIRROC Dispute Resolution Procedure. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Discovery – A Matter of Balance. Keeping a Watchful Eye on the Objective. . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
Draft Arbitration Clauses & Hypothetical. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
Miller Brewing Co. v. Fort Ií/orth Dist. Co., Inc.,78l F.2d494(1936) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
Burton v. Bush,614F.2d 389 (4th Cir. 1980) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
Privilege and its Perils: Insights and Strategies for Addressing Privilege Issues in Arbitrations. . . . . . . . . . . 75
Privilege and its Perils – Session Written Materials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
The Gatekeeper: A Practical Guide to Resolving Evidentiary Disputes at Hearing. . . . . . . . . . . . . . . . . . . . . . . 83
The Gatekeeper – Session Written Materials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
Workers' Compensation Disputes in the Insurance and Reinsurance Sphere – A Practical Guide. . . . . . . . . . 98
Key Issues in Workers’ Compensation Disputes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99
Friday, November 3, 2017
GENERAL SESSION: Captives in Reinsurance Disputes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111
Three Issues for Captives When Arbitrating Reinsurance Disputes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .112
15th CICA Captive Market Study Results Highlights. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 114
GENERAL SESSION: The ARIAS Ethics Code in Practice. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 123
ARIAS•U.S. Code of Conduct. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 124
GENERAL SESSION: The State of Play: An Insider's Perspective on Insurance
and Reinsurance Arbitrations in 2017 and Beyond. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 135
Altering the Structure of Reinsurance Arbitrations: Are Old Habits Too Hard to Break?. . . . . . . . . . . . . . . . . . 136
How Reinsurance Arbitrations Can Be Faster, Cheaper and Better. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 141
Let’s Break the Mold...or at Least Reshape It a Bit. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 146
GENERAL SESSION: The Bermuda Form: Can ARIAS Disrupt the Traditional Model?. . . . . . . . . . . . . . . . . . . . . 150
The Bermuda Form - Interpretation and Dispute Resolution of Excess Liability Insurance . . . . . . . . . . . . . . . 151
Bermuda Form Arbitration: A Policyholder Perspective. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 158
The Bermuda Form Arbitration Process: A Glimpse through the Insurers’ Spectacles. . . . . . . . . . . . . . . . . . . . 161
Policy Statement and Guidelines Concerning Antitrust Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 173
Registered Attendees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 176
Meeting Space Floor Plan. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 183

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 Expanding Our Reach: Exploring the Role of ARIAS in Non-Reinsurance Disputes

General Information about the

2017 ARIAS•U.S. Fall Conference
Attire: The general dress code for the conference is “business casual.” This means that while
speakers and panel members may be in business professional attire with a tie or suit jacket, it is not
a requirement for attendees. Usually at these conferences, attendees will dress up a bit more for the
evening reception.

Badges: Conference badges will be issued to all attendees. Please wear your badge at all times to
access all conference functions.

Session Materials: While most session materials are in the conference program, some materials may
be published online due to length.

Breakout Session Room Assignments: Room assignments for the Thursday afternoon Breakout
Sessions are included in the back of the program. Please refer to the list for your assigned session
room. Be sure to attend your assigned session and fill in each seat to ensure that all attendees have a
seat and sessions can begin on time.

Continuing Legal Education: Continuing legal education credits will be awarded for the State of
New York and Illinois. Credits are pending for Pennsylvania and Minnesota. For other states, please
reference the information that was communicated to all participants. Sign-in and sign-out sheets
are for attorneys who wish to receive CLE Credit. Certificates of attendance will be based solely upon
these sheets. You must sign in and out each day to receive credit for each day. There will be sign in
and out sheets on tables outside the General Session, next to registration. The sign in and out sheets
for the Thursday Breakout Sessions will be on tables near each room, and signage will be displayed
clearly for each session. Make sure you sign in and out of the various sessions with the time you arrive
and the time you leave in order to receive full credit. Certificates of attendance will be sent via email
to everyone who has signed in and out.

This is required by the New York State CLE Board.

ARIAS•U.S. Certification: Anyone receiving credit for ARIAS•U.S. Certification does not have to sign in
and out and will not be provided with a certificate of completion for the training. Participants however
must be in the training session and not in the hallways. This is a directive from the ARIAS•U.S Board of
Directors.

Obtaining Credit for the Conference: You will not receive full credit for a session if you are standing
in the hallways or arrive late or leave early. The training is taking place in the session rooms; you must
be inside. This is true both for CLE training and for ARIAS•U.S. Certification credit. To be clear, anyone
who is attending for ARIAS•U.S. certification renewal or for initial certification and who is not in the
session rooms will be considered as not completing the attendance requirement for certification/
recertification.

Opinions and Comments: Opinions and comments expressed in the enclosed materials and during
the conference sessions are not necessarily those of ARIAS•U.S., the firms or companies with which
the speakers are associated, or even the speakers themselves. Some arguments are made in the
context of fictitious disputes to illustrate methods of handling issues; others are individual opinions
about the handling of an issue. Every dispute or matter presents its own circumstances that provide
the context for decisions.

Finally, please note that this conference will be conducted in accordance with the ARIAS•U.S. Antitrust
Policy, which is enclosed and is also available in the About ARIAS section of the website (www.arias-
us.org).

We hope you enjoy the conference!

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 ARIAS•U.S. 2017 Fall Conference

Thursday, November 2
7:00 a.m. – 8:30 a.m. REGISTRATION
South Pre-function Registration Booth (5th Floor)
Thank you to our lanyard sponsor, FTI Consulting

7:30 a.m. – 8:30 a.m. BREAKFAST

North Pre-function Foyer Area (5th Floor)

8:30 a.m. – 8:40 a.m. GENERAL SESSION:

Welcome from the Conference Co-chairs
Westside Ballroom (5th Floor)
James I. Rubin, ARIAS•U.S. Chairman,
Butler Rubin Saltarelli & Boyd LLP
Peter Gentile, ARIAS•U.S. Certified Arbitrator
Alysa B. Wakin, Odyssey Re
Marc L. Abrams, Mintz Levin Cohn Ferris Glovsky and Popeo P.C.

8:40 a.m. – 9:20 a.m. ARIAS•U.S. ORGANIZATIONAL UPDATE

Westside Ballroom (5th Floor)

9:20 a.m. – 10:10 a.m. GENERAL SESSION: Opening Keynote

Westside Ballroom (5th Floor)
Neal Katyal, Hogan Lovells LLP

10:10 a.m. – 10:40 a.m. Morning Refreshment Break

North and South Pre-function Foyer (5th Floor)

10:40 a.m. – 11:30 a.m. GENERAL SESSION:

Direct Insurance Coverage Disputes – Can ARIAS
Develop a More Attractive Arbitration Product?
Westside Ballroom (5th Floor)
Top minds from the policyholder bar discuss problems encountered in the
existing arbitration process and how policyholders, insurers and ARIAS
might develop better arbitration procedures for policyholder disputes.
Panel: Deirdre Johnson, Crowell & Moring LLP
Peter Rosen, Latham & Watkins LLP
Paul Zevnick, Morgan, Lewis & Bockius LLP
Mitchell Dolin, Covington & Burling LLP

11:30 a.m. – 12:20 p.m. GENERAL SESSION:

Through the Looking Glass – Insurance Company
Perspectives on Policyholder Arbitration
Westside Ballroom (5th Floor)
In this companion to the preceding session, high level in-house counsel will
discuss problems with arbitrating direct coverage disputes from the insurer
perspective. Join us as we continue to explore whether ARIAS can develop
an effective dispute resolution model for direct coverage disputes.
Panel: Brian Snover, Berkshire Hathaway Reinsurance Division
Glenn Frankel, The Hartford Financial Services
Kim Hogrefe, ARIAS•U.S. Certified Arbitrator / Retired Senior Vice
President, Chubb and Son Insurance
Amanda Music, HCC/Tokio Marine
Steven Rosenstein, AIG
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 Expanding Our Reach: Exploring the Role of ARIAS in Non-Reinsurance Disputes

Thursday, November 2
12:20 p.m. – 12:25 p.m. ANNOUNCEMENTS FROM THE EXECUTIVE DIRECTOR
Westside Ballroom (5th Floor)

12:30 p.m. – 2:00 p.m. LUNCHEON

The Broadway Lounge (8th Floor)

1:30 p.m. – 2:00 p.m. NETWORKING LOUNGE – Open Networking

Lyceum Complex (5th Floor)

2:00 p.m. – 2:50 p.m. BREAKOUT SESSIONS – Round 1

Discovery – A Matter of Balance. Keeping a

Watchful Eye on the Objective
Salon 1
Discovery disputes are increasingly becoming part of the reinsurance
arbitration landscape. How can they be avoided, and how can they be
addressed when they arise? Join us as we address the issues in a roundtable
discussion with panel members and practitioners
Panel: Don Frechette, Locke Lord LLP
Christopher Bello, General Re Life Corporation
Jonathan Rosen, Arbitration, Mediation and Expert Witness Services
Aimee Hoben, The Hartford

The Gatekeeper: A Practical Guide to Resolving

Evidentiary Disputes at Hearing
Salon 2
Arbitrators must rule quickly on evidentiary disputes at hearing, often
without the aid of briefing and while confronted by party predictions
that vacatur will follow from adverse evidentiary rulings. In a hypothetical
coverage dispute, gain practical experience resolving evidentiary disputes
through live e-poll voting, compare your vote to that of other ARIAS-
certified arbitrators and company executives, and then learn how a court
might consider your ruling when hearing a petition to vacate.
Panel: Nina Caroselli, RiverStone Resources, LLC
John F. Chaplin, Compass Reinsurance Consulting LLC
Catherine Isely, Butler Rubin Saltarelli & Boyd LLP

Workers' Compensation Disputes in the Insurance

and Reinsurance Sphere – A Practical Guide
Salon 3
This session will address the key procedural and substantive issues presented
in workers’ compensation arbitrations – both in an insurance and reinsurance
setting. We will discuss the specialized structure of workers’ compensation
programs, with a particular focus on premium financing arrangements. We
also will address: common issues concerning the scope of the panel’s authority
and arbitrability in workers’ compensation arbitrations; arbitrator selection,
the current pool of frequently-used arbitrators and issues about which court
intervention is often sought; the key insurance claim issues that arise in such
arbitrations, including disputes over the calculation of retrospective premiums,
claim payment and audits; data security concerns; forced commutation
provisions in workers’ compensation reinsurance contracts; and other disputed
issues in workers’ compensation reinsurance arbitrations.
Panel: Mitch Harris, Day Pitney LLP
Kathleen Perlman, BerkleyRe
Jodi Ebersole, Travelers
Bryce Friedman, Simpson Thacher & Bartlett LLP

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 ARIAS•U.S. 2017 Fall Conference

Thursday, November 2
Privilege and its Perils: Insights and Strategies for
Addressing Privilege Issues in Arbitrations
Salon 4
The attorney-client privilege keeps secrets—sometimes. During this
session, panelists and conference participants will explore the foundations
of privilege, its role in our business, and recent developments that put
its protections at risk. Test your knowledge against real life problems and
fellow conference-goers in a lively participatory presentation.
Panel: Patricia Fox, AIG
Chuck Ehrlich, ARIAS•U.S. Certified Arbitrator
Nick Cramb, Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.

3:00 p.m. – 3:50 p.m. BREAKOUT SESSIONS – Round 2

All Sums vs. Pro Rata – An Insider's Guide to a

Hotly Disputed Issue
Salon 1
One of the most frequently disputed issues between insurers and
policyholders is how to apply losses across multiple policy years. This panel
will explore why these issues are so critical to policyholders and insurers.
Discussion topics will include current developments of the recent Viking
Pump and Olin decisions emanating from New York’s courts and how these
issues may find their way into reinsurance disputes.
Panel: Alex Furth, Resolute Management, Inc.
Ana Francisco, Foley & Lardner LLP
Ken Gorenberg, Barnes & Thornburg LLP

The Gatekeeper: A Practical Guide to Resolving

Evidentiary Disputes at Hearing
Salon 2
Repeated session – see description and panel presenters on page 5.

Arbitrating and Managing Small Disputes Cost-

Effectively: Strategies for Arbitrators, Counsel, and
Company Representatives
Salon 3
As we are all aware, companies occasionally have smaller disputes where
the total amount at issue is less than $1 million and the dispute cannot be
resolved on a principal-to-principal basis. The parties are then faced with
the prospect of having to incur hard and soft costs in arbitration that are
disproportionate to the total amount at stake. In this session, panelists and
attendees will discuss best practices to use to minimize the costs and delays
of arbitrating smaller claims. Reference will be made to various organizations'
procedures governing small claim disputes (such as ARIAS U.S.'s Streamlined
Rules For Small Claim Disputes), with a look at which aspects of those
procedures work well and which ones could use improvement.
Panel: Steve Kennedy, Clyde & Co.
Diane Nergaard, ARIAS•U.S. Certified Arbitrator
Jane Parker, W. R. Berkley Corporation

Privilege and its Perils: Insights and Strategies for

Addressing Privilege Issues in Arbitrations
Salon 4
Repeated session – see description and panel presenters on page 6.

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 Expanding Our Reach: Exploring the Role of ARIAS in Non-Reinsurance Disputes

Thursday, November 2
3:50 p.m. – 4:15 p.m. AFTERNOON REFRESHMENT BREAK
North and South Pre-function Foyer (5th Floor)

4:15 p.m. – 5:05 p.m. BREAKOUT SESSIONS – Round 3

All Sums vs. Pro Rata - An Insider's Guide to a Hotly

Disputed Issue
Salon 1
Repeated session – see description and panel presenters on page 6.

Discovery — A Matter of Balance. Keeping a

Watchful Eye on the Objective
Salon 2
Repeated session – see description and panel presenters on page 5.

Arbitrating and Managing Small Disputes Cost-

Effectively: Strategies for Arbitrators, Counsel, and
Company Representatives
Salon 3
Repeated session – see description and panel presenters on page 6.

Information Security for Arbitrators

Salon 4
Keeping information secure is vital in any confidential arbitration. This interactive
workshop is part of a continuing series of offerings from the Technology Committee.
Participants will learn two vital information security skills: (1) encrypting individual
documents, including PDFs, and (2) deleting files the right way.
Panel: Randi Ellias, Butler Rubin Saltarelli & Boyd LLP
Ron Gass, The Gass Company, Inc

5:10 p.m. – 6:00 p.m. ANNUAL MEETING AND ELECTIONS

Salon 2 (5th Floor)

6:00 p.m. – 7:30 p.m. COCKTAIL RECEPTION

The Broadway Lounge (8th Floor)

Friday, November 3
7:00 a.m. – 8:30 a.m. BREAKFAST
North Pre-function Foyer Area

7:30 a.m. – 8:30 a.m. ARIAS•U.S. COMMIT TEE MEETINGS

All Committee meetings are located on the 5th Floor
Arbitrators Committee – Broadhurst & Imperial
Law Committee – Belasco
Member Services & Strategic Planning Committee – Carnegie & Lyceum
Technology Committee – Booth

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 ARIAS•U.S. 2017 Fall Conference

Friday, November 3
8:30 a.m. – 9:20 a.m. GENERAL SESSION:
Captives in Reinsurance Disputes
Westside Ballroom (5th Floor)
Reinsurers and arbitrators should recognize that coverage conventions
and arbitration rules may take on a unique cast in disputes between a
captive and its reinsurers. This session will provide tools to understand the
application of “follow the fortunes” in disputes involving captives, what
captives look for in arbitrators, and modifications that captives may seek to
arbitration clauses.
Panel: Peter A. Halprin, Anderson Kill
Robert M. Horkovich, Anderson Kill
Larry Zelle, L Zelle LLC
Sandra J. Sutton, MCIC Vermont LLC

9:20 a.m. – 10:10 a.m. GENERAL SESSION:

The ARIAS Ethics Code in Practice
Westside Ballroom (5th Floor)
A distinguished panel of experienced arbitrators and counsel will review
how the Code operates in four key aspects of everyday situations: conflicts,
disclosures, ex parte and advocacy. The panelists will identify and discuss
key Code sections applicable to each situation, explain how arbitrators and
counsel think about these obligations from a practical perspective, and
provide pointers for both new and experienced practitioners.
Panel: Mark Gurevitz, MG Re Arbitrator & Mediator Services
Peter Gentile, ARIAS•U.S. Certified Arbitrator
Jeanne Kohler, Carlton Fields
Steve Schwartz, Chaffetz Lindsey LLP
Mark Megaw, ARIAS•U.S. Certified Arbitrator

10:10 a.m. – 10:30 a.m. MORNING REFRESHMENT BREAK

North and South Pre-function Foyer (5th Floor)

10:30 a.m. – 11:20 a.m. GENERAL SESSION:

The State of Play: An Insider's Perspective on Insurance
and Reinsurance Arbitrations in 2017 and Beyond
Westside Ballroom (5th Floor)
In this session, five panelists who are “repeat players” in the reinsurance
dispute market will answer fundamental questions about the state of
reinsurance arbitration in 2017. Conference participants will be encouraged
to submit questions anonymously to encourage lively discussion and build
on new insights.
Moderator: Marc L. Abrams, Mintz Levin Cohn Ferris, Glovsky and Popeo
Panel: Alysa B. Wakin, Odyssey Re
Scott Birrell, Travelers
Brad Rosen, Berkshire Hathaway Group
Jeffrey Burman, AIG
Josh Schwartz, Chubb

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 Expanding Our Reach: Exploring the Role of ARIAS in Non-Reinsurance Disputes

Friday, November 3
11:20 a.m. – 12:10 p.m. GENERAL SESSION:
The Bermuda Form: Can ARIAS Disrupt the
Traditional Model?
Westside Ballroom (5th Floor)
In a Bermuda Form arbitration, clients are typically faced with significant
dispute costs, including retention of multiple sets of counsel presenting
positions across different jurisdictions as well as application of different
bodies of law with frequent battles involving jurisdiction, choice of law,
experts, and the actual dispute itself. Would use of an ARIAS arbitration
clause, certified arbitrators and procedures create jurisdictional
impediments to clients that wish to avoid nexus with the U.S.? Would
application of an ARIAS format provide a better product to clients in the
Bermuda Form market? If so, what does ARIAS need to do in order to
“disrupt” the traditional Bermuda Form model?
Panel: John L. Jacobus, Steptoe & Johnson, LLP
Jonathan Goodman, General Electric
Leonard Romeo, Arch Bermuda
Mike Merlo, Aon (Bermuda) Ltd.
Robin Saul, XL Bermuda Ltd/Insurance
Greg Hoffnagle, Mintzm Kevin, Cohn, Ferris, Glovsky and Pepeo, P.C.

12:10 p.m. – 12:15 p.m. ACKNOWLEDGEMENTS / CLOSING REMARKS

Westside Ballroom (5th Floor)
Deirdre Johnson, ARIAS•U.S. Chairwoman, Crowell & Moring LLP

NY CLE CREDIT: ARIAS•U.S. is accredited by the New York State Continuing Legal Education
Board as a provider of CLE training. Nine hours of Continuing Legal Education credits are
available to those who attend this conference, which breaks down as follows: 1.0 CLE credits
for Ethics and 8.0 CLE credits for Areas of Professional Practice. This program is structured for
both newly admitted attorneys and experienced attorneys. Sign-in and sign-out sheets will
verify attendance at all sessions and will be the basis upon which certificates of attendance
will be prepared and sent, but certification of completed credit hours to CLE Boards is the
responsibility of each attorney.

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 ARIAS•U.S. 2017 Fall Conference

Faculty Biographies

Marc L. Abrams, Mintz Levin Cohn Ferris Glovsky Jeffrey S. Burman,

and Popeo P.C. American International Group, Inc.
Marc has nearly 20 years of experience guiding cli- Jeff Burman is a Deputy General Counsel and the
ents through complex insurance and reinsurance Chief Reinsurance Legal Officer for AIG. Jeff serves
dispute resolutions, both in US courts and before as head of legal for various groups, including Rein-
US and international arbitration panels. He rep- surance; Multinational; Alternative Risk Solutions;
resents US and international insurers and has been involved in Commercial Governance & Transactions; as well as the Canada, Ber-
a variety of engagements for both insurers and reinsurers across muda and Latin America regions. Jeff is also active in the AIG legal
various lines of insurance business. Marc has presented and tried department’s pro bono program. Prior to joining AIG in 2008, Jeff
many of the insurance and reinsurance industry’s fundamental practiced at two leading New York law firms, where he represented
dispute issues, including, allocation, aggregation, notice, follow insurers, reinsurers, investment banks and investors in insurance
the fortunes, security, payment of interest, set-offs, insolvency, and reinsurance based transactions as well as in reinsurance dis-
captives, “cut-through” provisions, claims handling practices, pute resolution. Jeff is a member of the bars of New York and New
claims control, special acceptances, rescission, sunset clauses, and Jersey, receiving his law degree from Rutgers University School of
other matters of contractual interpretation. He has been admitted Law, where he served as an editor on the Rutgers Law Journal.
as pro hac vice in various US federal courts. On the reinsurance
side, Marc has recently resolved a number of matters in court and Nina L. Caroselli, The RiverStone Resources LLC
in arbitration involving allocation and notice as well as a complex
Nina Caroselli has over thirty years of experience
international reinsurance dispute involving a fronting company’s
in the insurance industry and private litigation
“cut-through” rights. Marc’s practice also extends to litigating
practice. She began her career in private practice
and arbitrating insurance coverage matters, broker, agency, and
in New York and New Jersey specializing in the lit-
intermediary disputes, and other commercial disputes involving
igation of insurance coverage and product liabili-
insurers, and he has recently resolved a number of EPLI and busi-
ty matters. Subsequently she moved in-house joining the run-off
ness interruption claims for a large US insurer.
team in 1996 as Senior Attorney focusing on asbestos, pollution
and health hazard claims. Ms. Caroselli’s career with RiverStone
Christopher R. Bello,
has progressed and varied in responsibility having had executive
General Re Life Corporation
responsibilities for Claims, Reinsurance and Operations. In 2011
Christopher R. Bello serves as Vice President, Senior Ms. Caroselli was promoted Chief Operating Officer. Nina grad-
Counsel and Secretary of United States Aviation uated from St. John’s University School of Law and is a frequent
Underwriters, Inc. and General Re Life Corporation. speaker at industry conferences on a wide variety of topics.
He has practiced law for 30 years and is licensed in
the State of Connecticut. Chris joined General Reinsurance Corpo- John F. Chaplin,
ration in 1996 as an Assistant General Counsel. He has also served Compass Reinsurance Consulting LLC
as General Counsel of General Re New England Asset Manage-
John Chaplin is a reinsurance consultant with 40
ment and General Re Life Corporation. Prior to joining General Re
years’ experience in the business. He is a veteran
he practiced law with Bello, Lapine and Cassone for 13 years as a
of the casualty reinsurance struggles of the 1970’s
litigator and appellate attorney. In 1988 he joined the United States
when he was an executive at Guy Carpenter; the
Army Reserve, Judge Advocate Generals Corps and was called to
reinsurance transformations of the Workers’ Compensation in the
active duty in 1990 in support of Operation Desert Storm and served
1980’s, also at Guy Carpenter; the property reinsurance market
in Saudi Arabia until April, 1991. He was Honorably Discharged as a
upheavals of the 1990’s and 2000’s while at GC, North American
Captain from the Army in 1996. His current practice includes life and
Re and later as a consultant. John has served in every transac-
property/casualty insurance and reinsurance regulation, litigation
tional capacity in the business: intermediary, underwriter, buyer,
and arbitration, life and disability reinsurance claims, treaty word-
seller, and for the last 15 years, consultant. Currently, John is an
ing, contract matters, corporate governance, intellectual property
ARIAS•U.S. certified arbitrator and continues to provide services
matters and information technology contracts.
in the reinsurance field as an arbitrator, umpire and expert.
Scott P. Birrell, The Travelers Companies, Inc.
Nick Cramb, Mintz, Levin, Cohn, Ferris, Glovsky
As head of the Travelers Reinsurance Legal Group, and Popeo, P.C.
Scott has oversight of all ceded and assumed re-
Nick Cramb is a member (partner) in Mintz Levin’s
insurance litigation and arbitration for the Com-
Insurance, Reinsurance, Investigations, & Risk
pany as well as certain oversight responsibilities
Management Practice. He represents insurers, re-
relative to commutation, regulatory, wording and
insurers, and insurance brokers on all matters of
transactional issues. Prior to joining Travelers, he was in private
coverage, including, for example, the duty to defend, allocation,
practice, specializing in the litigation and trial of general com-
order of coverage, retention warranties, and bad faith. His expertise
mercial and insurance-related matters. Scott is a current member
includes commercial general liability, directors and officers liability
of the Board of Directors for ARIAS·US and is a past member of
and professional liability insurance, and both facultative and treaty
the Arbitrator and Umpire Certification Committee and past Co-
reinsurance. While at Mintz Levin, Nick served as a Special Assis-
Chair of the ARIAS Arbitration Task Force. He is certified as an
tant District Attorney with the Middlesex District Attorney’s Office,
arbitrator with ARIAS·US, and with The Association of Insurance
where tried several cases before juries. Nick was a founding mem-
& Reinsurance Run-Off Companies (AIRROC). Scott received his
ber and recent President of the Massachusetts Reinsurance Bar As-
undergraduate degree from the University of Colorado and his
sociation (MReBA) and is a member of ARIAS•U.S. 
Juris Doctorate, cum laude, from the New England School of Law
in Boston, Massachusetts, and is a past adjunct faculty member
of the University of Connecticut School of Law.

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 Expanding Our Reach: Exploring the Role of ARIAS in Non-Reinsurance Disputes

Faculty Biographies

Mitchell Dolin, Covington & Burling LLP security, and compliance with actuarial standards of practice. She
was named a leader in insurance law in The Best Lawyers in Amer-
Mitchell Dolin, who co-chairs Covington & Bur-
ica (2016 and 2017). Randi is a co-founder of Butler Rubin’s Women
ling’s highly regarded global insurance recovery
in Reinsurance organization and she is a member of the Publica-
practice, represents corporate and other policy-
tion Committee of AIRROC Matters. She has spoken at AIRROC
holders in pursuing coverage for a broad range
meetings and the Women in Insurance Leadership Forum.
of underlying liabilities through litigation, arbi-
tration, mediation, and negotiation.  His work in the field has in- Patricia Taylor Fox,
cluded coverage for antitrust, cyber, employment, environmental, American International Group
intellectual property, mass tort, media, professional liability, and
shareholder claims, as well as first-party property, business inter- Patricia Taylor Fox has over 15 years’ experience
ruption,  cargo, event cancellation, political risk, and representa- in the insurance and reinsurance industry. She
tion and warranty losses. Mr. Dolin has been ranked by Chambers currently serves as Deputy General Counsel in the
USA  as one of the nation’s top dozen or so policyholder lawyers Reinsurance Legal Division of AIG, where she is
for each of the past several years, and  Chambers  has described the head of the Dispute Resolution Unit. Patricia has co-authored
him as “universally lauded for his deep policyholder experience articles on evidence in arbitrations, attorney-client privilege, the
and knowledge.” For several years, he also chaired the firm’s arbi- common-interest privilege and developments in reinsurance law,
tration practice group and has served as an advocate and arbitra- and is a frequent speaker on issues relating to the arbitration of
tor in domestic and international arbitrations.  Mitchell is a grad- reinsurance disputes.
uate of Tufts and NYU Law School and has spent his entire private
practice career at Covington based in its Washington office. Ana M. Francisco, Foley & Lardner LLP
Ana M. Francisco is a partner at Foley & Lardner LLP,
Jodi Ebersole, The Travelers Companies, Inc. and the Boston Litigation Department Chair. She is
Jodi Ebersole has been with Travelers since 1999 in a member of the firm’s Insurance & Reinsurance
a variety of legal roles and currently serves as the Litigation, Business Litigation & Dispute Resolu-
Vice President, Associate Group General Counsel tion, and Privacy, Security & Information manage-
of Corporate Litigation and Business Insurance. In ment Practices. Ana is a trial lawyer and commercial litigator with
her Corporate Litigation role, Jodi and the Cor- deep expertise in insurance disputes. For over twenty years, she
porate Litigation team manage all non-claim, non-employment has defended clients in coverage disputes and provided strategic
litigation for all of the Travelers enterprise and its individual busi- advice concerning mass tort and environmental pollution claims
ness units. In her Business Insurance legal role, Jodi is the lead across the United States and abroad, particularly those presenting
lawyer for the Small Commercial and National Accounts business novel issues. Ana also regularly represents insurer and reinsurers
units, and the lead lawyer for Travelers Workers Compensation in disputes concerning general liability and life insurance disputes.
product group. Prior to joining Travelers, Jodi was in private prac- She has been recognized by The Legal 500 for her work in insur-
tice as a trial lawyer in Baltimore where she was a partner in the ance: advice to insurers. Ana has also been selected by her peers for
law firm of Ferguson, Schetelich and Ballew. inclusion in The Best Lawyers in America© in the field of commer-
cial litigation. In 2010, Ms. Francisco was named as one of the “Top
Chuck Ehrlich, ARIAS•U.S. Certified Arbitrator Women in the Law” by Massachusetts Lawyers Weekly.
Chuck Ehrlich was a litigation partner in an AmLaw Glenn Frankel, The Hartford Financial Services
100 firm when he joined the executive team or-
ganized to extricate Xerox Financial Services, Inc. Glenn is a Vice President of Claims with The
from the property and casualty insurance business. Hartford, and currently leads the Strategic Claim
He was responsible for resolving complex, volatile, Management group, responsible for: (1) direct
high dollar matters as the team completed its assignment for Xerox asbestos and toxic tort (sexual molestation, lead
and ultimately became part of the Fairfax Financial Holdings Limit- paint, chemical exposures, sports-related head
ed family. Chuck’s corporate positions included: Senior Vice Presi- injuries, etc.) claims; (2) Assumed Reinsurance; and (3) Interna-
dent & General Counsel; Senior Vice President, Claims; and Senior tional Claims and Puni-Wrap Cover (domestic and international
Vice President, Worldwide Special Counsel, as well as directorships general liability, auto, property, workers’ compensation, acciden-
of domestic and foreign insurance companies. Chuck was respon- tal death and dismemberment, kidnap and ransom, cargo, finan-
sible for resolution of billions of dollars in disputes, and adminis- cial products and punitive damages claims). In addition, Glenn
tration of legal budgets in the tens of millions annually. His portfo- sits on the Boards of Directors for the First State Insurance Group
lio included mass tort liabilities, pollution, class actions, products companies. Prior to joining The Hartford, Glenn was a Managing
liability, and complex commercial coverages. He is familiar with all Counsel with Travelers Property & Casualty, and an associate with
aspects of the property and casualty industry.Chuck has served as the law firm of Day, Berry & Howard (now Day Pitney) in Hartford,
an umpire and a party arbitrator. CT. Glenn is also an ARIAS certified Arbitrator. Glenn earned his
J.D. from St. John’s University School of Law (cum laude), and B.A.
Randi Ellias, Butler Rubin Saltarelli & Boyd LLP in economics from Wesleyan University.
Randi Ellias focuses her practice on complex com- Donald Frechette, Locke Lord LLP
mercial litigation and arbitration, including com-
plex insurance coverage disputes and reinsurance Don is a partner in the Hartford office of Locke
matters. She has handled matters concerning al- Lord, LLP. As an experienced trial lawyer, he has
legations of nondisclosure and misrepresentation, represented both cedents and reinsurers in for-
treaty interpretation, ownership of common account reinsurance, eign and domestic arbitrations. He has also lit-
direct access to reinsurance proceeds by policyholders, number igated arbitration-related issues in numerous
of occurrences, contractual and statutory obligations regarding state and federal courts. Don received his B.A. in Economics and
11
 ARIAS•U.S. 2017 Fall Conference

Faculty Biographies

Business Administration from the University of New Hampshire, Peter Gentile, ARIAS•U.S. Certified Arbitrator
his J.D. from New York Law School, with honors, and his LL.M. from
Peter Gentile has served the insurance and re-in-
Boston University, with highest honors.
surance industries for over forty years; during
Bryce L. Friedman, the last fifteen years as an ARIAS – US Certified
Simpson Thacher & Bartlett LLP Umpire and Arbitrator. He has served on several
arbitration panels both as an Umpire and Party
Bryce L. Friedman, a Partner at Simpson Thacher, Appointed Arbitrator. Peter has also served as a litigation consul-
represents clients in complex disputes through tant and expert witness in a number of complex disputes involv-
counseling, litigation and trial.  He devotes a signif- ing insurers and re-insurers. Previously, he was CEO. President
icant part of his practice to representing members and CFO of major reinsurers where his responsibilities included
of the insurance and reinsurance industries in litigated matters, and all aspects of underwriting, claims, contracts and financial mat-
the financial services and other industries in addressing allegations ters. Among his areas of expertise are alternative approaches to
of fraud and False Claims Act violations. He is recognized by Cham- transferring both long tail casualty and property risk, mergers and
bers where sources say “he receives high praise for his ‘top-notch acquisitions, captives and run-off. Mr. Gentile is a Certified Public
strategic thinking.’” He is also recognized as a national “Litigation Accountant and began his career at the accounting firm of KPMG
Star” for insurance by Euromoney’s Benchmark Litigation and was where he was a Partner and leader of the Insurance Practice in
named a “Rising Star” by Law360. He is also involved in substantial New York. He is both Treasurer and a Member of the Board of Di-
pro bono work including supervising Simpson Thacher’s ongoing rectors of ARIAS•U.S.
legal clinic at the Bushwick Campus Schools in Brooklyn and serves
on the Board of VOLS. Bryce received his B.A., cum laude, from Dart- Jonathan Goodman, General Electric
mouth College and graduated from Columbia University School of
Jonathan Goodman is Executive Counsel, GE
Law, where he was a Harlan Fiske Stone Scholar.
Global Operations, Risk & Property Divestitures in
Alexandra Furth, Resolute Management, Inc. Norwalk, Connecticut and has been with Gener-
al Electric Company since August 2005.  He is re-
Alex Furth is Vice President and Assistant General sponsible for insurance-related legal issues at GE
Counsel at Resolute Management, Inc. Until 2015, Corporate, including management of insurance coverage claims
Alex was Assistant Vice President and Senior Cor- and disputes, oversight of significant insured litigation, advice on
porate Counsel in the Legal Department of Liberty the terms and structure of GE’s global insurance and reinsurance
Mutual’s Complex and Emerging Risks Claims De- programs, and captive management and reinsurance issues. Mr.
partment, which handled exposures arising out of asbestos, envi- Goodman’s responsibilities cover all lines of coverage, including
ronmental, toxic tort and other mass litigation. Alex continues to general liability, property, cyber, professional and other specialty
manage coverage and reinsurance litigation and arbitrations relat- coverages. He also is responsible for managing divestiture of sur-
ing to such complex losses. Prior to joining Liberty Mutual, Alex was plus real property held at GE Corporate. Before GE, he practiced
a litigator at the law firm of Ropes & Gray, where she represented law in the New York offices of Dickstein Shapiro Morin & Oshinsky
clients in a variety of commercial disputes, including contract dis- focusing on insurance coverage litigation. Mr. Goodman is an ad-
putes, trademark infringement and government enforcement ac- viser for ALI’s Restatement of the Law of Liability Insurance.
tions. At Ropes & Gray she specialized in representing insurers in
asbestos coverage litigation. She also served as a Special Assistant Kenneth M. Gorenberg, Barnes & Thornburg LLP
District Attorney for the Commonwealth of Massachusetts, where
Kenneth M. Gorenberg is a partner in the Chica-
she tried numerous criminal cases. Ms. Furth graduated from Wil-
go office of Barnes & Thornburg LLP. A versatile
liams College, magna cum laude, and received her law degree from
litigator, he is a member of the firm’s Insurance
the University of Pennsylvania, where she served as an editor of the
Recovery and Counseling, Commercial Litigation,
University of Pennsylvania Law Review.
Construction, Toxic Tort, and Appellate practice
Ronald S. Gass, The Gass Company, Inc. groups. Kenneth has handled coverage issues involving an alpha-
bet soup of insurance policies, including CGL, D&O, E&O, EPLI,
Ronald Gass is an attorney and an ARIAS•U.S. Certi-
PLL, and WC/EL, as well as first-party property policies, crime
fied Arbitrator and umpire. Most of his 28-year legal
bonds, and surety bonds. He has deep understanding of loss-sen-
career has been devoted exclusively to his reinsur-
sitive insurance programs, having litigated disputes involving
ance and insurance practice involving a broad range
workers compensation claim handling as well as deductible and
of complex business issues including coverage dis-
retrospective premium billing. His trial and appellate victories in
putes arising from various lines of business such as asbestos and
one such case in the 11th Circuit were featured in Law360’s selec-
environmental liability, workers’ comp carve-outs, general liability,
tion of Barnes & Thornburg’s Insurance Recovery group as a Prac-
medical malpractice liability, medical stop loss insurance, and prop-
tice Group of the Year for 2015. He also works in the trenches of
erty and catastrophe insurance. He also has significant experience
product liability, professional liability, and commercial litigation,
with reinsurance collections, MGA transactions and disputes, sure-
including as national coordinating counsel for defendants in as-
ty reinsurance, aviation and ocean marine reinsurance, reinsurance
bestos litigation. Gorenberg brings this underlying litigation ex-
contract wordings and interpretation, reinsurance intermediary dis-
perience to bear in insurance coverage litigation, negotiation, and
putes, and commutations. In 2001, Mr. Gass established his own firm
counseling for corporate policyholders.
to provide arbitrator and umpire dispute resolution services to the
reinsurance and insurance industry. Since that time, he has been
appointed as an umpire or party-arbitrator in over 90 arbitrations.

12
 Expanding Our Reach: Exploring the Role of ARIAS in Non-Reinsurance Disputes

Faculty Biographies

Mark S. Gurevitz, MG Re Arbitrator & Mediator ford’s Claim organization. Aimee counsels The Hartford’s Property
Services and Casualty business as well as provides reinsurance counsel to
Talcott Resolutions, which manages the company’s run-off life and
Mark S. Gurevitz is the founder and principal of
annuity business. She led a multidisciplinary team in the successful
MG Re Arbitrator and Mediator Services LLC, a
Part VII court restructuring of The Hartford’s UK run-off businesses
consulting firm specializing in dispute resolution
completed in October 2015. Prior to joining The Hartford, Aimee was
services for the insurance and reinsurance indus-
in private practice at Murtha Cullina LLP in Hartford, with a focus on
try. An ARIAS•U.S. Certified Arbitrator and Umpire, Mark serves as
insurance coverage, environmental law and land conservation. She
an arbitrator and umpire on insurance and reinsurance matters in-
received her B.A. in English Literature from the University of Colo-
volving property-casualty and life business. He is also a FINRA ap-
rado, and her J.D. from the University of Connecticut School of Law,
proved arbitrator on their roster for securities-related matters and
with high honors.
an AAA international arbitrator on the ICDR roster of arbitrators. He
is a Director of Fencourt Reinsurance Company, Ltd. and Heritage Gregory S. Hoffnagle, Mintz, Levin, Cohn, Ferris,
Reinsurance Company, Ltd. A frequent lecturer on reinsurance and Glovsky & Popeo, P.C.
arbitration topics, Mark is a Director Emeritus, former President and
Chairman of ARIAS•U.S., was chair of its Long Range Planning Com- Greg Hoffnagle is Of Counsel in the New York
mittee and co-chair of the Forms and Procedures Committee and office of Mintz Levin.  Greg’s practice focuses on
is on the Editorial Board of the ARIAS Quarterly and the new Ethics complex insurance and reinsurance matters as
Discussion Committee. He is a graduate of The Pennsylvania State well as international arbitration and litigation. He
University, with high distinction, and received his J.D., cum laude, has a breadth of experience representing clients with government
from Temple University School of Law. He also attended the Amer- regulatory and enforcement actions along with internal investiga-
ican Institute for CPCU and Wharton School of Business Insurance tions. Prior to joining Mintz Levin, Greg worked in the New York of-
Executive Development Program. fice of a London-based global law firm, where his practice focused
on complex international insurance, reinsurance, and commercial
Peter A. Halprin, Anderson Kill disputes with a particular focus on Bermuda Form arbitrations.
Peter A. Halprin is an attorney in Anderson Kill’s Kim D. Hogrefe, ARIAS•U.S. Certified Arbitrator /
New York office. His practice concentrates in com- Retired Senior Vice President, Chubb and Son
mercial litigation and insurance recovery, exclu- Insurance
sively on behalf of policyholders. He also acts as
counsel for U.S. and foreign companies in domes- Kim D. Hogrefe is the Chair of the Board of Trust-
tic and international arbitrations (including London and Bermuda ees of the National Judicial College which provides
Form arbitrations). Peter is a Member of the Chartered Institute of educational programs and training to Judges in
Arbitrators, and received a Postgraduate Distance Learning Diplo- the United States. He was a Senior Vice President and Worldwide
ma in International Commercial Arbitration from the Queen Mary Claim Technical Officer of Chubb & Son Insurance with responsi-
School of Law, University of London. He successfully completed bility for direct and reinsurance claims with the highest complexity
the Hong Kong International Arbitration Centre’s (HKIAC) Tribunal and financial exposure. He led the handling and strategy in disput-
Secretary Accreditation Programme, and is on the Tribunal Secre- ed reinsurance claims worldwide for Chubb as both a cedent and
taries Panel for the Australian Centre for International Commer- reinsurer. He previously served as a trial attorney, supervisor and
cial Arbitration (ACICA). Peter is an Adjunct Professor of Law and administrator in the New York County District Attorney’s Office. A
Coach of the Benjamin N. Cardozo School of Law Willem C. Vis graduate of Yale University and the University of Pennsylvania Law
International Commercial Arbitration Moot Team and is Deputy School, he is an active member of ARIAS•U.S. and the American
Co-Chair of the Cyber Insurance Recovery Practice Group, as well Bar Association. He was elected as a member of the governing
as a member of Anderson Kill’s Financial Services Industry Group. Council and as the Financial Officer of the Tort Trial & Insurance
Since 2013, he has been recognized by Super Lawyers as a New Practice Section of the ABA and currently serves on its Cybersecu-
York Metro Rising Star for Insurance Coverage. rity and Data Privacy Committee. He is a frequent speaker on the
topics of cyberliability risks, mediation and arbitration resolution
Mitch Harris, Day Pitney LLP strategies and Directors’ and Officers’ liability claim handling.
Mitch Harris is a trial lawyer, primarily representing Robert M. Horkovich, Anderson Kill
financial institutions and insurance companies in
litigation, arbitration, investigative and regulatory Robert M. Horkovich is “the ‘go-to person’ in the
proceedings. Mitch has served as lead trial coun- area of insurance recovery,” according to a client
sel in commercial and insurance litigation in fed- cited by Chambers USA, which has recognized Mr.
eral and state courts and in arbitrations throughout the country. Horkovich as a leading insurance recovery attor-
An objective third-party survey, Benchmark Litigation: The Defin- ney every year since 2005. According to Cham-
itive Guide to America’s Leading Litigation Firms & Attorneys, has bers, Bob “has a strong ‘client-first’ attitude” and “is recognized
repeatedly recognized Mitch as a “Connecticut Litigation Star.” in the market for his leading trial and negotiation skills, with an
undisputed national presence.” Bob has obtained over $5 billion
Aimee L. Hoben, The Hartford in settlements and judgments from insurance companies for his
clients over the past decade. Bob is a trial lawyer with substan-
Aimee L. Hoben is Deputy General Counsel, Direc-
tial experience in trying complex insurance coverage actions on
tor of Reinsurance and Claims Law at Hartford Fi-
behalf of corporate policyholders and governmental entities. Bob
nancial Service Group, Inc. Reporting to the Gener-
has been selected by his peers for inclusion in Best Lawyers for in-
al Counsel, she leads a team of lawyers responsible
surance law in every year since 2009 and Super Lawyers for Insur-
for all legal issues relating to reinsurance as well as
ance Coverage since 2006. He has been selected as a Fellow of the
for providing regulatory and claim practices support to The Hart-
American Bar Foundation, the premier institute for social science

13
 ARIAS•U.S. 2017 Fall Conference

Faculty Biographies

research regarding law in the USA, an honor limited to one-third argued 7 cases in 6 separate arguments at the Supreme Court,
of one percent of the lawyers in America. far more than any other advocate in the nation (the next high-
est number, 4 arguments, was reached by two attorneys). At the
Catherine Isely, Butler Rubin Saltarelli & Boyd LLP
age of 47, he has already argued more Supreme Court cases in
Catherine Isely is a trial attorney and Butler Rubin Saltarelli & Boyd U.S. history than has any minority attorney, with the exception
LLP partner who has litigated and arbitrated complex commer- of Thurgood Marshall (with whom Neal is currently tied). Neal is
cial disputes for more than two decades. For the past ten years, well-known for winning the landmark decision Hamdan v. Rums-
Chambers USA has recognized her as a leading Illinois lawyer in feld, which challenged the policy of military trials at Guantanamo
reinsurance dispute resolution. Catherine has extensive experi- Bay. The Supreme Court sided with him by a 5-3 vote, finding that
ence before courts and arbitration panels litigating the allocation President Bush's tribunals violated the constitutional separation
of environmental and toxic tort settlements, as well as disputes of powers, domestic military law, and international law.
related to claims handling, negligent underwriting, bad faith al-
legations, pool membership rights and obligations, retrospective- Stephen M. Kennedy, Clyde & Co US LLP
ly-rated business, commutations, retrocessional coverage, title Stephen Kennedy represents insurers and reinsur-
reinsurance, direct access provisions, obligations to follow set- ers as lead counsel in trials, arbitrations, mediations
tlements, obligations to post security, and the interpretation and and appeals of complex coverage and transaction-
application of ultimate net loss, aggregate limit, definitive state- al disputes involving all lines of business, including
ment of loss, net retained lines, prompt notice, access to records, casualty, energy, environmental, financial guaran-
consent to settle, honorable engagement and arbitration clauses. ty, life and health, political risk, property, and trade credit. He also
Catherine is a founding member and co-host of Butler Rubin’s an- represents companies in high-dollar bad faith claims and counsels
nual Women in Reinsurance Program. them on contract drafting, risk management and regulatory mat-
ters. Mr. Kennedy is a frequent speaker at industry events and has
John L. Jacobus, Partner, Steptoe & Johnson, LLP
written numerous articles in various publications, including the
John Jacobus is a member of Steptoe & Johnson Journal of Insurance Coverage, Reinsurance Magazine, ARIAS•U.S.
LLP’s Insurance and Reinsurance Practice Group. Quarterly and the Insurance & Reinsurance International Compara-
Mr. Jacobus has focused on representing cedents, tive Legal Guide. He also served on a three-member task force that
reinsurers and retrocessionaires in litigation and drafted the ARIAS•U.S. Rules for the Resolution of U.S. Insurance
arbitrations within the United States and in private and Reinsurance Disputes as well as the ARIAS•U.S. Streamlined
international dispute resolution centers. He also has a corporate Rules for Small Claim Disputes. He has been consistently recognized
practice, focused on commutation and work-out issues, as well as by a number of leading legal directories, including the Euromoney’s
merger and acquisition activities that are handled through rein- Expert Guide to Insurance and Reinsurance Lawyers, Who’s Who Le-
surance assumption agreements and the novation of reinsurance gal Insurance and Reinsurance Lawyers and Legal 500 U.S. He is a
treaties. He is also a specialist with respect to insurance coverage graduate of Kenyon College and Villanova University School of Law.
for cyber risks. Mr. Jacobus is an internationally known member
of the insurance and reinsurance bar. He is a Chairman Emeritus Jeanne M. Kohler, Carlton Fields
of the Insurance and Reinsurance Practice Group for LEX MUNDI, Jeanne Kohler is a Shareholder in the New York of-
the world’s largest association of private law firms. John earned an fice of Carlton Fields and a member of its Property
A.B. in History, magna cum laude, Phi Beta Kappa, from Harvard & Casualty Insurance and Life Insurance & Annuity
University (1986), and a J.D. from the Harvard Law School (1989). practice groups. She also co- chairs the firm’s Re-
insurance group. Her practice focuses on complex
Deirdre G. Johnson, Crowell & Moring LLP
commercial litigation and arbitration, with an emphasis on insurance
Deirdre Johnson is a partner in the Washington, coverage and reinsurance disputes. Jeanne has litigated and arbitrat-
D.C. office of Crowell & Moring LLP. She has nearly ed cases on behalf of U.S. and international insurers and reinsurers
two decades of experience handling disputes in involving a broad range of issues in the property and casualty and life
the U.S., Bermuda, London and European markets and health sectors, as well as various specialty re/insurance products.
in lawsuits and arbitration proceedings arising out She has also represented insurers, brokers, third-party administrators
of a broad range of claims and virtually all types of insurance and and managing general agents and underwriters in disputes. In ad-
reinsurance agreements. Johnson has handled dozens of reinsur- dition, Jeanne regularly assists her insurer and reinsurer clients with
ance arbitrations in both domestic and international proceedings, product development and contract drafting, as well as advises them
including many Bermuda and London arbitrations arising out of on regulatory issues and risk management.
a broad range of claim types. She also represents insurers and
reinsurers in insolvency proceedings and leads Crowell & Moring’s Mark Megaw , ARIAS•U.S. Certified Arbitrator
Professional Liability insurance practice. Johnson is a graduate of Mark is a former ARIAS Board member, and an
the Georgetown University Law Center (cum laude) and the Uni- original co-chair of the ARIAS Arbitrator’s Commit-
versity of Tennessee (B.A., with honors). tee. He currently sits on the ARIAS Ethics Commit-
tee. He was previously the head of assumed and
Neal Katyal, Hogan Lovells LLP
ceded reinsurance disputes for the ACE Group of
Neal Katyal, the former Acting Solicitor General Companies, now known as Chubb. Prior to that role, he served as
of the United States, focuses on appellate and General Counsel to ACE Tempest Re Group. During the 1990’s, he
complex litigation. He has extensive experience was based in London, in a business role for CIGNA Re. These days,
in matters of patent, securities, criminal, employ- though retired from the practice of law, he serves in neutral roles
ment, and constitutional law. Neal has orally ar- in reinsurance arbitration disputes. Beyond reinsurance, when not
gued 34 cases before the Supreme Court of the United States, on a tennis court, he and his wife tutor a class of pre-K children and
with 32 of them in the last 8 years. In the 2016-17 Term alone, Neal they teach adult-literacy, all in Charlottesville, Virginia.

14
 Expanding Our Reach: Exploring the Role of ARIAS in Non-Reinsurance Disputes

Faculty Biographies

Michael G. Merlo, Aon (Bermuda) Ltd Brad Rosen, Berkshire Hathaway Group
Mike joined Aon as Chief Counsel and Senior Vice Brad Rosen is a vice president and counsel with
President of Aon (Bermuda) Ltd. in 2004. He was the Berkshire Hathaway Reinsurance Division,
promoted to Executive Vice President of Aon (Ber- where he serves as a legal resource on a variety of
muda) Ltd. in 2007, and also continues to serve as matters. Previously, he was an associate at Quinn,
its Chief Counsel. In 2011, Mike took on the addi- Emanuel, Urquhart & Sullivan LLP in New York.
tional roles of Managing Director of Aon Risk Solution’s Casualty Brad also serves as an adjunct lecturer for the Yale College Com-
Consultation, Advocacy and Claims Resolution Practice, and also puter Science Department in New Haven. He received a master ’s
Special Counsel to Aon Corporation. As Managing Director of Aon of science and bachelors of science from Yale University in 2004
Risk Solution’s Casualty Consultation, Advocacy and Claims Reso- and his juris doctor from Harvard Law School in 2008.
lution Practice, Mike provides counsel and advocacy to Aon’s cli-
ents on a wide range of issues, including coverage, drafting and Jonathan Rosen, Arbitration, Mediation and
interpretation issues across all lines of business, but with a par- Expert Witness Services
ticular emphasis on complex casualty matters. Mike has authored Jonathan Rosen is an ARIAS•U.S. Certified Arbitra-
articles and spoken frequently at seminars on various industry tor and Umpire and is primarily engaged as an ar-
topics, legal developments and litigation techniques. Mike has bitrator, mediator and expert witness servicing the
also served as a Board Member of Aon Benfield (Bermuda) Ltd, insurance and reinsurance industries. He is also
and as an Executive Board Member of the Association of Bermuda listed on the CPR’s Panel of Distinguished Neutrals. Jonathan was
Compliance Officers (“ABCO”). formerly Chief Operating Officer of The Home Insurance Compa-
ny in Liquidation. Prior to Home’s liquidation, Jonathan was Exec-
Diane Nergaard, ARIAS•U.S. Certified Arbitrator
utive Vice President and Reinsurance Counsel of Home and Risk
Diane Nergaard is an ARIAS•U.S. Certified Arbitrator and Umpire Enterprise Management Limited, responsible for the reinsurance
and is engaged as an arbitrator and mediator servicing the insur- operations of the Home entities as well as certain reinsurance
ance and reinsurance industries. She has experience in all aspects endeavors of the Zurich group. He has depth of experience in all
of property/casualty insurance and reinsurance and has also spoken aspects of property/casualty insurance and reinsurance arrange-
extensively on insurance and reinsurance matters at various confer- ments and has served on NAIC advisory committees and work-
ences. Diane has participated in hundreds of arbitrations, including ing groups involved in the preparation of model legislation and
in complex matters such as financial guaranty / securitizations, bro- regulation. Jonathan is currently President of Cityvest Reinsurance
ker / dealers, global covers, MGA/MGU matters and rescission cases. Limited, a Bermuda licensed subsidiary of Home, an officer of
She also has regulatory expertise and has worked extensively with SOBC Insurance Company Limited, domiciled in Connecticut, and
regulators to set up numerous insurance companies, agencies and a Director of Compass Insurance Company. He is a past Director
MGAs. Nergaard transitioned from being a litigator in private prac- and past Chairman of the Association of Insurance and Reinsur-
tice to in-house counsel at Crum and Foster where she was involved ance Run-Off Companies (“AIRROC”) and a past Director of the
with the run-off of a $1billion portfolio of reinsurance recoverables. Reinsurance Mediation Institute (“REMEDI”).

Kathleen Perlman, BerkleyRe Peter K. Rosen, Latham & Watkins

Kate Perlman has over thirty years of experi- Peter K. Rosen received his Juris Doctorate from
ence in reinsurance/retrocessions. Ms. Perl- the University of Southern California Gould School
man holds the CPCU and ARe designations and of Law. He is a partner in the Los Angeles office of
is the Claims Manager at Berkley Re America. Latham & Watkins and is a member of the litigation
department. He is the Global Chair of the Insurance
Coverage Litigation practice. He represents insurance policyholders
Jane B. Parker, W.R. Berley Corporation in matters involving commercial general liability policies, directors’
and officers’ liability insurance policies, transactional liability in-
Jane Parker is a senior attorney and member of the corporate
surance policies, environmental insurance, fidelity insurance, pro-
claims management team at the W.R. Berkley Corporation.  W.
fessional liability policies, property disputes, and surety bonds. Mr.
R. Berkley Corporation is a holding company which operates
Rosen was the lead lawyer for the retail leaseholder at the World
through 50 operating units worldwide in the commercial insur-
Trade Center in the massive insurance coverage litigation arising out
ance space.  Jane has more than 25 years experience handling in-
of the 9/11 attacks. His role in the World Trade Center insurance cov-
surance and reinsurance claim matters.
erage litigation gained him worldwide recognition. Since 2007, Mr.
Leonard Romeo, Arch Insurance (Bermuda) Rosen has taught Insurance Law as well as Corporate Governance
at the USC Gould School of Law and will be teaching Insurance Law
Leonard Romeo is Vice President, Division Coun- at Pepperdine Law School in 2018. Mr. Rosen is as a Fellow of the
sel & Claims Director at Arch Insurance (Bermuda). Chartered Institute of Arbitrators (CIArb) and a Fellow of the America
He has been with the company in Bermuda since College of Coverage and Extracontractual Counsel.
2009. Romeo is responsible for managing all liti-
gation and exposure matters for Excess Casualty, James I. Rubin, Butler Rubin Saltarelli & Boyd LLP
D & O, and Professional Liability claims and provides underwriting
James Rubin is a trial lawyer and head of the rein-
support on each of those lines of business. Romeo was previously
surance litigation and arbitration practice at Butler
a Complex Claims Director at AIG for five years in the Healthcare
Rubin Saltarelli & Boyd LLP. He is a founding partner
and Excess Complex Claims units. Prior to joining AIG, he litigated
of the firm and has extensive experience represent-
general/product liability matters as well as medical malpractice
ing insurance and reinsurance companies and bro-
cases. Romeo holds a Juris Doctor and a Bachelor ’s degree (cum
kers in hundreds of disputes. Mr. Rubin has repeatedly been named
laude) from St. John’s University.

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 ARIAS•U.S. 2017 Fall Conference

Faculty Biographies

as a national leader in insurance and reinsurance law in publications Brian Snover, Berkshire Hathaway Group
including Chambers USA, The Legal 500, The Best Lawyers in Amer-
Brian Snover is the Senior Vice President and Gen-
ica and Super Lawyers. He is a member of the Board of Directors of
eral Counsel of the Reinsurance Division of the
ARIAS-U.S. and Chair of the ARIAS Ethics and Publications commit-
Berkshire Hathaway Group in Stamford, CT, and
tees and he co-wrote ARIAS’ Guidelines for Arbitrator Conduct.
serves as an officer and a director of several com-
Robin Saul, XL Bermuda Ltd/Insurance panies in the Berkshire Hathaway Group. Snover
has been with the Berkshire Hathaway Reinsurance Division since
Robin Saul is the Claims Manager for Casualty and 1993. He received a B.A. from Franklin & Marshall College in 1984
Healthcare claims at XL Bermuda Ltd (“XLB”). Robin and a J.D. from the Albany Law School of Union University in 1987.
has handled both insurance and reinsurance cov- Prior to joining Berkshire Hathaway, he was associated with the
erage disputes.  Robin’s core area of expertise is in New York law firms of Simpson Thacher & Bartlett and Werner,
handling high value international coverage matters, Kennedy & French.
and has experience in a wide variety of product lines, including: en-
ergy; pharmaceutical; life science; product recall; and, professional Alysa B. Wakin, Odyssey Re
lines.    Robin also has extensive experience in handling Bermuda
Alysa Wakin is Vice President and Claims Coun-
Form arbitrations.  Before joining XLB, Robin held a similar position
sel for Odyssey Reinsurance Company where she
at Markel Bermuda (formerly Alterra). Prior to that, she was a solic-
manages the litigation and arbitration of disputes
itor with Clyde & Co in London.  Robin started her insurance / rein-
on behalf of that company and its subsidiaries. Pri-
surance career in the 90s on the excess liability broking team with
or to joining Odyssey Re, Alysa was a litigator with
Johnson & Higgins in Bermuda.  Robin has both her ACII (Associate
the firm of Wiley Rein & Fielding where she represented insurers
of Chartered Insurers, UK) and ARM (Associate of Risk Management,
and reinsurers in complex litigation and arbitration matters and
USA) professional designations. Robin has been called to the Bar in
provided advice and counsel on a wide range of insurance and re-
Bermuda and admitted as a Solicitor in England and Wales.
insurance topics. Wakin first entered the world of reinsurance arbi-
Joshua Schwartz, Chubb trations in 1995 as an associate with the firm of Werner & Kennedy.
Ms. Wakin previously served on the ARIAS·U.S. Education Commit-
Joshua Schwartz is Managing Counsel, Director tee and currently serves on the Strategic Planning Committee.
of Reinsurance Litigation for Chubb. His respon-
sibilities include management and oversight of Larry Zelle, L. Zelle LLC
reinsurance disputes involving Chubb entities,
For over 50 years, as a practicing lawyer, Larry Zelle
including Chubb Tempest, Chubb Tempest Life,
represented major property and casualty insurers
Brandywine and the ceded reinsurance of Chubb’s insurance
(FM Global, IRI, Kemper amongst others) as well as
business. Prior to this role, Josh served as General Counsel and
several major reinsurers. His involvement with the
Regional Compliance Officer for ACE Bermuda. His responsibili-
captive insurance industry began in the early 1980’s
ties included providing legal advice on professional lines, excess
when he was retained by the Reiss Organization (ARM, IRM, IRMG)
liability, property and reinsurance claims; participating in media-
to handle a large subrogation case for one of the captives it man-
tions, arbitrations and other litigation; counseling underwriters on
aged. In subsequent years Larry became involved in several nota-
policy and reinsurance wordings; assisting with product develop-
ble captive losses. Among them were the vapor cloud explosions at
ment; and providing advice on risk management. He participated
Pampas TX and Pasadena TX in the late 1980’s, the Cheerios contam-
on the ACE Bermuda Risk, Management Audit, Reserving, Pension
ination loss in the 1990’s, and the 2008 Cargill flood loss. In addition
and Investment Committees. Josh joined ACE in 2006 as Associate
Larry served as Vice President, Claims of a captive in the early 2000’s,
General Counsel (Litigation) in New York. Before ACE, Josh worked
supervising the runoff and ultimate liquidation of the company. He
as Counsel at O’Melveny & Myers, Associate at Fried Frank and
retired from the practice of law in 2015 and now keeps busy as an
Law Clerk to the Hon. Federico A. Moreno, District Court Judge,
arbitrator or mediator in insurance and reinsurance disputes.
Southern District of Florida.
Paul Zevnik, Morgan Lewis
Steven C. Schwartz, Chaffetz Lindsey LLP
Paul Zevnik has nearly 40 years’ experience de-
Steve Schwartz is a partner at Chaffetz Lindsey
fending mass and toxic tort, environmental and
LLP. He has devoted most of his practice to rein-
product liability suits; handling insurance recovery
surance arbitration and litigation since the early
disputes; and structuring captives, qualified set-
1990s. During that time, Steve has handled dis-
tlement funds, and other risk transfer vehicles to
putes relating to both property/casualty and life
meet mass and toxic tort, environmental, and product liabilities.
and health reinsurance, as well as finite risk reinsurance. Steve
His experience extends from the courtroom to the boardroom,
is the author of Reinsurance Law: An Analytic Approach, a com-
embracing trial and appellate practice, arbitration, mediation, ad-
prehensive treatise first published in 2009 and updated semi-an-
vice and counsel, bankruptcy and restructuring, and private and
nually since then. Steve is a graduate of Princeton University and
public company transactions and financial reporting.
Columbia Law School.

16
 Session Materials

Thursday, November 2, 2017

11:30 a.m. – 12:20 p.m.
GENERAL SESSION
Through the Looking Glass – Insurance
Company Perspectives on Policyholder
Arbitration
SESSION MATERIALS:
Writing Arbitration Clauses to Get the Arbitration You Want. . . . . . . . . . . 18

PRESENTED BY:
Brian Snover, Berkshire Hathaway Reinsurance Division
Glenn Frankel, The Hartford Financial Services
Kim Hogrefe, ARIAS•U.S. Certified Arbitrator /
Retired Senior Vice President, Chubb and Son Insurance
Amanda Music, HCC/Tokio Marine
Steven Rosenstein, AIG

17
 Session Materials ARIAS•U.S. 2017 Fall Conference

Writing Arbitration Clauses To Get The Arbitration You Want - Law360 https://www.law360.com/articles/826544/print?section=aerospace

Portfolio Media. Inc. | 111 West 19th Street, 5th floor | New York, NY 10011 | www.law360.com
Phone: +1 646 783 7100 | Fax: +1 646 783 7161 | customerservice@law360.com

Writing Arbitration Clauses To Get The Arbitration

You Want
“Any customer can have a car painted any colour that he wants so long as it
is black.” —Henry Ford.[1]

These days, counsel thinking about agreeing to arbitration clauses have a

lot to think about. On the one hand, arbitration can have significant
advantages over litigation: if properly designed, arbitration can be faster
than litigation; as well as less expensive, more private; more flexible and
more closely crafted to the needs of the dispute. On the other hand,
everyone seems to have some horror stories: such as the arbitrator who did
not get it and issued an obviously incorrect (but now unreviewable)
decision; or the arbitration that ended up costing as much (or more) than Merril Hirsh
litigation would have cost because the arbitrator did not limit the discovery
and let all the evidence in. To be sure, this does not happen all the time or
with every arbitrator. But it happens enough to make people question the
process.

So far as the Federal Arbitration Act is concerned, the U.S. Supreme Court
has not done these counsel any favors. In one breath, the court emphasizes
that the act is “motivated, first and foremost, by a congressional desire to
enforce agreements into which parties ha[ve] entered” to achieve their
objectives.[2] But, in the next breath, the court tells the parties that the
objective they really need to want to have is finality.
Nicholas Schuchert
In Hall Street Associates LLC v. Mattel Inc.,[3] the Supreme Court
concluded that the Federal Arbitration Act barred courts applying the act
from honoring parties’ agreements to have courts review an arbitration decision for legal error.
The court reasoned that the Federal Arbitration Act provided for only very limited review of
arbitration decisions — essentially that a disinterested arbitrator’s decision could not be reviewed
for being legally wrong, or factually unsupported, but merely for whether the arbitrator either
improperly failed to resolve an issue or prevented parties from making arguments. According to
the court, the act’s provisions on this point “substantiat[e] a national policy favoring arbitration
with just the limited review needed to maintain arbitration’s essential virtue of resolving disputes
straightaway.”[4]

“Resolving disputes straightaway” is good so far as it goes: there is no point to having an

arbitration if the loser can just relitigate the case somewhere else. But in our experience with
participants in arbitration, this finality is a means to an end, not an end in itself.

As our courts have recognized in their own procedures, the goal is to have dispute resolution be
“just, speedy and inexpensive.”[5] Having a regime of federal law that says that arbitrators
generally cannot be reversed for getting the decision wrong, but (absent fraud) only for failing to
consider something may be speedy once you get to court, but it does not afford much comfort
that arbitration decisions will be just or inexpensive. Indeed, it is difficult to imagine that what
people really want, above all else, out of a dispute resolution system is a guarantee that incorrect
and expensive determinations will be made final and unappealable.

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We are not here to argue that the Supreme Court misread the Federal Arbitration Act. (Nor would
it do much good. The justices, after all, are the ones who wear the robes). Our point is that,
correct or not, what the Supreme Court read was the Federal Arbitration Act. Participants in
arbitration can generally fashion a different system — one that, for example, generally permits
reversal for errors of law or factual findings that lack substantial evidence bases, but makes
decisions to limit discovery or exclude evidence matters of broader discretion.

The way to fashion a different system is to use a different law. Participants can draft arbitration
clauses so that their choice is governed by arbitral procedures or state law that permit them to do
so, instead of the Federal Arbitration Act. As the Supreme Court also said in Hall, the Federal
Arbitration Act “is not the only way into court for parties wanting review of arbitration awards:
they may contemplate enforcement under state statutory or common law, for example, where
judicial review of different scope is arguable.”[6]

Creating an arbitration agreement that is subject to different review requires some care and you
need to plan ahead. But generally you can get the arbitration you want.

What Law Do You Want?

As Hall suggests, the Federal Arbitration Act is not the only game in town. Every state has its own
law governing arbitration. The law in this area is subject to change (in fact, prior to Hall, lower
federal courts differed over whether the Federal Arbitration Act permitted parties to contract for
more searching judicial review). Accordingly, it is important to check your state’s latest law
carefully. However, there are some jurisdictions with laws that afford parties flexibility to provide
for judicial review of arbitration decisions.

New Jersey’s arbitration act specifically allows the parties to contract for expanded judicial
review.[7] Provided some conditions are met (including that the arbitration not be “conducted
under the auspices of the American Arbitration Association”), Iowa’s arbitration act provides for
vacating an award where “[s]ubstantial evidence on the record as a whole does not support the
award.”[8] New Hampshire’s arbitration act[9] has also been interpreted to allow for expanded
judicial review.[10] In 2003, Georgia amended its arbitration statute to allow judicial review for an
“arbitrator’s manifest disregard of the law.”[11]

Other jurisdictions have interpreted their statutes to operate differently from the Federal
Arbitration Act. The supreme courts of California,[12] Texas,[13] Alabama[14] and
Connecticut[15] have ruled that parties are free to contract for more searching judicial review
than what their respective arbitration acts would, by themselves, allow. An older intermediate
appellate court case in New York has also suggested that New York would permit parties to
contract for broader review, by restricting the arbitrator’s authority.[16]

In other states, the law is undecided. This provides limited comfort: people drafting arbitration
clauses usually want certainty, not the chance for additional groundbreaking litigation. But an
open question may still be better than a closed door. The District of Columbia’s arbitration statute
allows a court to “vacate an award made in the arbitration proceedings on other reasonable
ground.”[17] The District of Columbia’s highest court has rejected the argument that this
language provides for additional grounds for judicial review,[18] but it has not ruled on whether
this language might allow the parties to agree to other reasonable grounds for appeal.

More generally, the District of Columbia is one of 18 jurisdictions that have adopted the Revised
Uniform Arbitration Act (RUAA) (1990) to replace the Uniform Arbitration Act (1955): the others
are Alaska, Arizona, Arkansas, Colorado, Florida, Hawaii, Michigan, Minnesota, Nevada, New
Jersey, New Mexico, North Carolina, North Dakota, Oklahoma, Oregon, Utah, Washington and
West Virginia.[19] Section 23 of the act specifies the circumstances under which a court “shall”
vacate an award, but does not explicitly state whether these circumstances are an exclusive list of
those upon which a court “may” vacate an award, if the parties otherwise agree.[20]

The National Conference of Commissioners on Uniform State Laws, which approved the RUAA in
2000, actively debated having an explicit provision allowing parties to “opt-in” to more searching

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review of awards. At the time, the commissioners declined to include such a provision because (1)
they disagreed among themselves about whether judicial review was consistent with the idea of
arbitration; and (2) they were uncertain whether states would permit parties to “contract” for
judicial review.[21] They decided instead to leave “the issue of the legal propriety of this means
for securing review of awards to the developing case law under the FAA and state arbitration
statutes,” recognizing that the “parties remain free to agree to contractual provisions for judicial
review of challenged awards, on whatever grounds and based on whatever standards they deem
appropriate …”[22] Presumably, parties so agreeing would then test the issue by arguing that
Section 23 does not prevent enforcement of their agreement.

Today, the argument for permitting such agreements (either by legislation or judicial
interpretation) seems stronger than it was in 2000. To begin with, there is now more precedent
for legislatures and courts to enforce the parties’ choice to have judicial review.

Also, at least at the state level, the pendulum may be in a different place than it was in 2000. In
2000, the main challenge to using arbitration appeared to be the need to eliminate the vestiges of
the “bad old days when judges were hostile to arbitration and ingenious about hamstringing
it.”[23] In 1997, for example, a major survey of representatives at Fortune 1000 companies
showed that they overwhelmingly viewed arbitration very favorably as a less-expensive
alternative to litigation — so long as arbitration could resolve the dispute.[24]

A 2014 follow-up survey showed that this same group now views arbitration as almost as
expensive as litigation, and more risky.[25] Given these concerns, the cure — of presuming that
finality is the only goal — starts to look worse than the disease. If arbitration decisions essentially
cannot be vacated for being wrong, but can conceivably be reversed based on refusals to consider
evidence, the law seems to be incentivizing arbitrators to consider everything any party would
want to offer and to be less concerned about getting the decision right. The new challenge is to
have arbitrations be sufficiently final to save money, while sufficiently flexible to work for those
who use them.

Indeed, the RUAA is sensitive at least to the cost concern. Under the act, parties “can decide to
eliminate or limit discovery as best suits their needs,” and, if they make no decision, the act
affords arbitrators broad discretion to “permit such discovery as the arbitrator decides is
appropriate in the circumstances, taking into account the needs of the parties to the arbitration
proceeding and other affected persons and the desirability of making the proceeding fair,
expeditious, and cost effective.”[26] This diminishes the incentive to let all the evidence in, as a
means of avoiding reversal.

How Do You Get a Different Law?

Now that you have located law that does or may allow you to contract for what you want, the next
hurdle is getting the law to apply. This process involves some traps for the unwary.

First, you need to be explicit about what your chosen law will govern. While Hall addressed what
the Federal Arbitration Act does and does not do, other Supreme Court cases have addressed
when and to what extent the Federal Arbitration Act preempts states from doing something
different. When it applies, federal preemption is quite broad. For example, the Supreme Court has
now ruled that, where it applies, the Federal Arbitration Act not only preempts states from
enforcing a public policy barring consumer agreements that waive class action rights,[27] but also
preempts state courts from construing an arbitration agreement not to waive class action rights,
where the construction relies on assuming the viability of the public policy.[28]

The Supreme Court has also ruled that parties, who want to avoid the Federal Arbitration Act (and
its preemption), need to say so very specifically. In Mastrobuono v. Shearson Lehman Hutton,[29]
the court ruled that a provision stating that a contract was governed “by the laws of the State of
New York,” merely applied “New York’s substantive rights and obligations,” and did not mean that
the parties had chosen to apply a New York law that “allocate[ed] of power between alternative
tribunals” by preventing arbitration panels (as opposed to courts) from awarding punitive
damages.[30]

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One message from Mastrobuono is that if you want to have a state’s arbitration act govern appeal
rights, you should not just say “this contract shall be governed by the law of X state.” Instead,
say something like “this agreement will be governed by X’s substantive laws and the X Arbitration
Act as it may be amended and construed by its courts.” Otherwise, at least where your contract
involves interstate commerce, a court may well presume you wanted your arbitration to be
governed by the Federal Arbitration Act.

Another message from Mastrobuono is that substantive law and procedural law can come from
different sources. Particularly in international arbitration, it is very common to have different law
govern the substance of the contract and the procedure by which the arbitration award is
confirmed. Parties can agree that the substance of their contract is governed by one state’s law,
but that confirmation or vacatur of the arbitration decision will be governed by the procedures of a
different state.

Second, parties may need to have a basis for choosing the law of a state that otherwise has no
connection with the contract. Some states, like California, Delaware and New York, have statutes
explicitly allowing parties (provided that the contract meets a monetary threshold) to have their
law govern contracts regardless of whether the parties have a connection to the state.[31] Other
states, like Texas, require that parties seeking to apply its law have some kind of reasonable
relationship to the state.[32] Section 187 of Restatement (Second) of Conflict of Laws provides
that courts will enforce parties; agreement to have specified law apply to their contract provided
(1) it does not contravene a fundamental public policy of the forum state, and (2) the state
chosen has a reasonable relationship to the transaction.[33]

None of this is a problem if the state whose arbitration law you choose has a reasonable
relationship to the parties or the contract. (If, for example, one of the parties is incorporated or
has its principal place of business, negotiated the contract from, or quite likely other more
remote, but reasonable, connections with New Jersey, likely any court will honor the parties’
choice to use New Jersey’s arbitration act). But if there is no connection, the need for a
“reasonable relationship” may depend on the law of the forum where the dispute is brought.

For example, Pinela v. Neiman Marcus Group Inc.[34] dealt with a choice of law provision in an
employment contract between Neiman Marcus and its employees providing that all disputes would
be governed by Texas law. A group of California employees filed a class action in California state
court alleging various violations of the California Labor Code. The court found that the arbitration
agreement and its choice of law clause was “plainly obnoxious to public policy in California” and
amounted to a waiver of the plaintiff’s substantive rights. Neiman Marcus cited approvingly to
Restatement Section 187.[35] Similarly, Federal courts apply the choice of law rules of the state
in which they sit.[36]

In theory you may be able to solve this problem through creative (though, as far as we know,
untested) efforts to create a “reasonable relationship” with the state whose arbitration act you
want. (E.g., flying to Newark Airport to sign the contract?). But, if you have no apparent
connection with the state whose arbitration law you want, a safer solution would be to select not
only the arbitration law that governs but also the forum that will decide whether to confirm or to
vacate an award.

If You Can’t Be With the Law You Love, Love the One You’re With
Another (again, we caution, largely untested) possibility that even Hall would appear to leave
open is to be creative about delimiting the arbitrator’s powers. One of the grounds under which
courts “shall” vacate arbitration awards under the federal and both state uniform acts is where “an
arbitrator exceeded the arbitrator’s powers.”[37] In some circumstances, parties have been able
to obtain judicial review by circumscribing what the arbitration could do in the first place. For
example, a California case vacated an arbitrator’s decision to overturn a tenure decision because
the arbitration agreement, as relevant to the case, limited the arbitrator’s power to instances
where the decision was “not based on reasoned judgment,” and the arbitrator had exceeded his
authority by substituting his judgment for that of the university.[38]

Of course, most parties will not want to limit an arbitrator to deciding whether one party took

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action “based on reasoned judgment.” But there does not appear to be any reason why parties
could not specify other things they do not want their arbitrator to do. Would it be possible for
parties to direct an arbitrator to follow specified law and to declare that any failure to follow that
law would be presumed not just to be a mistake, but a failure to conform to the terms of the
arbitration agreement? Uncertain. But some creativity may be better than no chance.

Another alternative is to have an appeal as part of the arbitration itself. The American Arbitration
Association (AAA) and the International Institute for Conflict Prevention and Resolution (CPR),
have responded to Hall by adopting rules for appellate arbitration.[39] In principle, it would also
be possible to establish a method of appeal in an ad hoc arbitration (one that does not use an
administering organization like AAA or CPR) — by agreeing to a two-stage appellate procedure,
with one arbitrator (or panel), for example, reviewing the initial decision for legal error or lack of
substantial evidence much like a court might review an adjudication by a government agency.
That is not a court, but the parties can specify qualifications for the arbitrators (e.g., former
appellate judges), or even agree in advance on a list of acceptable candidates.

Delaware’s recently enacted Rapid Arbitration Act[40] uses a hybrid approach. This act is a
business-to-business arbitration statute that cannot be used in consumer arbitrations.[41] If
businesses using its terms do not contract for an appellate arbitration, actions to enforce or to
vacate arbitration awards go the Delaware Supreme Court. Under this route, the Hall review
standard appears to govern because the act specifies that the Delaware Supreme Court vacates,
modifies, or corrects the final award in conformity with the Federal Arbitration Act.[42] However,
the act also gives the parties the power to contract for appellate review of a final award by one or
more arbitrators who may be appointed by Delaware Court of Chancery. And, in that case,
appellate review proceeds as provided in the agreement.[43]

Arbitration as an Exercise in Problem Solving

Today, Fords come in many colors. Perhaps one reason is that, ultimately, people who wanted
colorful cars did not have to buy Fords. Good lawyering is an exercise in care and creativity. And
for arbitration, it may take some of both to make the system work for you. But you can get the
arbitration you want.

—By Merril Hirsh and Nicholas Schuchert, Troutman Sanders LLP

Merril Hirsh is a partner at the Washington, D.C., office of Troutman Sanders. He is a fellow of the
Chartered Institute of Arbitrators and has been a litigator for over 33 years, with experience in the
courts of over 40 states. Nicholas Schuchert is an associate at the Orange County, California,
office of Troutman Sanders, where he is in the business litigation practice.

The opinions expressed are those of the author(s) and do not necessarily reflect the views of the
firm, its clients, or Portfolio Media Inc., or any of its or their respective affiliates. This article is for
general information purposes and is not intended to be and should not be taken as legal advice.

[1] Henry Ford and Samuel Crowther, My Life and Work at 72 (1922).

[2] Dean Witter Reynolds Inc. v. Byrd, 470 U. S. 213, 220 (1985). See also DIRECTV Inc. v.
Imburgia, 136 S. Ct. 463, 473 (2015).

[3] 552 U.S. 576 (2008).

[4] Id. at 588.

[5] Fed. R. Civ. P. 1.

[6] Hall, n.4 above, 552 U.S. at 590.

[7] N.J. Stat. Ann. § 2A:23B-4 (2016).

[8] Iowa Code § 679A.12(1)(f) (2009) (Also specifying that the “court shall not vacate an award

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on this ground if a party urging the vacation has not caused the arbitration proceedings to be
reported, if the parties have agreed that a vacation shall not be made on this ground, or if the
arbitration has been conducted under the auspices of the American arbitration association”).

[9] N.H. Rev. Stat. Ann. § 542:8 (Granting courts the power to correct or modify an award for
plain mistake.)

[10] See Finn v. Ballentine Partners LLC, 2016 N.H. LEXIS 60, at *10 (N.H. June 14, 2016) (“We
have construed this statute to grant a court the authority to vacate an award for plain mistake if it
‘determine[s] that an arbitrator misapplied the law to the facts’”) (citation omitted).

[11] Ga. Code Ann. § 9-9-13(b)(5) (2015).

[12] Cable Connection Inc. v. DIRECTV Inc., 44 Cal. 4th 1334, 1355 (2008). See also Mave
Enterprises Inc. v. Travelers Indemnity Co., 219 Cal. App. 4th 1408, 1432 (2013) (suggesting the
defendant could have contracted for judicial review of the arbitration award for errors of law if it
included the appropriate language in the parties stipulations). See also Dotson v. Amgen Inc., 181
Cal. App. 4th 975, 987 (2010) (upholding arbitration agreement providing for the same standard
review as that applied by an appellate court reviewing a decision of a trial court sitting without a
jury.)

[13] See Nafta Traders Inc. v. Quinn, 339 S.W.3d 84, 101 (Tex. 2011) (“We hold that the FAA
does not preempt enforcement of an agreement for expanded judicial review of an arbitration
award enforceable under the TAA.”)

[14] See Raymond James Fin. Servs. v. Honea, 55 So. 3d 1161, 1169 (Ala. 2010) (Alabama law
allows a court to conduct a de novo review of an award so long as the agreement provides for
such a review.)

[15] Garrity v. McCaskey, 612 A.2d 742, 745 (Conn. 1992) (the arbitration agreement is limited if
it “contains express language restricting the breadth of issues, reserving explicit rights, or
conditioning the award on court review”). See also Maluszewski v. Allstate Ins. Co., 640 A.2d 129,
132 (Conn. App.) (“[i]f the parties engaged in voluntary, but restricted, arbitration, the trial
court's standard of review would be broader depending on the specific restriction,” and if the
restriction is that the arbitrator's award must conform to the law, the court would be bound to
enforce the restriction), app. denied, 642 A.2d 1214 (Conn. 1994).

[16] NAB Constr.Corp. v. Metro. Trans. Auth., 579 N.Y.S.2d 375 (1992) (approving application of
a contractual provision permitting judicial review of an arbitration award “limited to the question
of whether or not the [designated decision maker under an alternative dispute resolution
procedure] is arbitrary, capricious or so grossly erroneous to evidence bad faith”).

[17] D.C. Code § 16-4423(b) (2016).

[18] A1 Team USA Holdings, LLC v. Bingham McCutchen LLP, 998 A.2d 320, 326 (D.C. 2010)
(“We see nothing in the legislative history to support A1’s argument that under the revised
Arbitration Act, this court ‘can now vacate an arbitral award on any ‘reasonable’ basis’”).

[19] Laura A. Kaster, “The Revised Uniform Arbitration Act at 15: The New Jersey Story,” Dispute
Resolution Magazine (Winter 2016).

[20] Rev. Unif. Arb. Act, available at http://www.uniformlaws.org/shared/docs/arbitration

/arbitration_final_00.pdf §23, Comment B.

[21] Id. Comment B5.

[22] Rev. Unif. Arb. Act § 23, Comment B5.

[23] Glass, Molders, Pottery, Plastics & Allied Works Int’l U. v. Excelsior Foundry Co., 56 F.3d 844,
846 (7th Cir. 1995) (citation omitted).

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[24] See Ryan Lamare, “The Evolution of ADR Systems at Large US Corporations,” Dispute
Resolution Magazine (Spring 2014).

[25] Id.

[26] Rev. Unif. Arb. Act §17(c).

[27] AT&T Mobility v. Concepcion, 563 U.S. 333, 352 (2011).

[28] Imburgia, n.3 above, 136 S. Ct at 471.

[29] 514 U.S. 52 (1995).

[30] Id. at 60.

[31] Del. C. Ann. tit. 6 § 2708; Cal. Civ. Code § 1646.5; N.Y. Gen. Oblig. Law § 5-1401.

[32] Tex. Bus. & Com. Code § 271.007; Tex. Bus. & Com. Code § 271.004(b)(1)(E) (defining a
transaction bearing a reasonable relation to a particular jurisdiction as one where “a substantial
part of the negotiations relating to the transaction occurred in or from that jurisdiction and an
agreement relating to the transaction was signed in that jurisdiction by a party to the
transaction…”)

[33] Restatement (Second) of Conflict of Laws § 187 (1989) (The law of the chosen state will not
be enforced where “(1) the chosen state has no substantial relationship to the parties or the
transaction and there is no other reasonable basis for the parties choice; and (2) application of
the law of the chosen state would be contrary to a fundamental public policy of a state which has
a materially greater interest than the chosen state in the determination of a particular issue and
which, under the rule of §188, would be the state of the applicable law in the absence of an
effective choice of law by the parties.”)

[34] 238 Cal. App. 4th 227 (2015), review denied, 2015 Cal. LEXIS 6186 (Sept. 16, 2015).

[35] Id. at 257 (California had a materially greater interest in “ensuring that its statutory
protections for California-based workers are not selectively disabled by out-of-state companies
wishing to do business in [California]”).

[36] AWH Inv. P’Ship v. Citigroup, 806 F.3d 695, 699 (2d. Cir. 2015); First Intercontinental Bank
v. Ahn, 798 F.3d 1149, 1153 (9th Cir. 2015).

[37] Rev. Unif. Arb. Act §23(a)(4). See also Section 10(a)(4) of the Federal Arbitration Act, 9
U.S.C. §10(a)(4); Unif. Arb. Act §12(a)(3).

[38] Cal. Faculty Ass’n v. Superior Ct., 63 Cal. App. 4th 935 (1998). See also Chin v. Advanced
Fresh Concepts Franchise Corp., 194 Cal. App. 4th 704, 711-712 (2011) (finding that a provision
stating any award shall be based on established law and shall not be made on broad principles of
justice and equity is “an accepted way of limiting the arbitrator’s broad powers and allowing
judicial review on the merits of an arbitration award”); Garrity, n.16, above, 612 A.2d at 745
(noting the parties’ ability to restrict the arbitrator’s powers).

[39] See American Arbitration Association “Optional Appellate Arbitration Rules” which can easily
be included in any arbitration agreement and provide for additional grounds for review, available
at http://go.adr.org/AppellateRules; CPR Arbitration and Appeal Procedure and Commentary,
available at http://www.cpradr.org/Portals/0/CPRArbitrationAppealProcedure2015.pdf

[40] Del. C. Ann. tit. 10 §§ 5801-5812.

[41] Id. § 5803(a)(3).

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[42] Id. § 5809(a).

[43] Id. § 5809(d)(2).

All Content © 2003-2017, Portfolio Media, Inc.

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 Session Materials ARIAS•U.S. 2017 Fall Conference

Thursday, November 2, 2017

3:00 p.m. – 3:50 p.m. & 4:15 p.m. – 5:05 p.m.
BREAKOUT SESSION
All Sums vs. ProRata –
An Insider 's Guide to a Hotly Disputed Issue
SESSION MATERIALS:
In the Matter of VIKING PUMP, INC., et al., Insurance Appeals. . . . . . . . . 27

AVAILABLE IN ONLINE MATERIALS ONLY

Olin Corporation v OneBeacon America Insurance Company

PRESENTED BY:
Alex Furth, Resolute Management, Inc.
Ana Francisco, Foley & Lardner LLP
Ken Gorenberg, Barnes & Thornburg LLP

26
 Session Materials

1144 N. Y. 52 NORTH EASTERN REPORTER, 3d SERIES

[noting that ‘‘(t)hose decisions apparently Superior Court, New Castle County, Sil-
no longer mean all that they say’’] ), we verman, J., 2014 WL 1305003, ruled that
plunge ahead into greater confusion, creat- under New York law, insured’s alleged
ing a constitutional violation and recoiling successors were obligated to horizontally
from the consequences. exhaust all triggered primary and umbrel-
For the foregoing reasons, I dissent and la insurance layers before tapping any of
would affirm the Appellate Division order. insured’s excess coverage. On appeal, the
Delaware Supreme Court, Holland, J., –––
Judges RIVERA, STEIN and FAHEY A.3d ––––, 2015 WL 3618924, certified
concur; Judge GARCIA dissents and questions to the New York Court of Ap-
votes to affirm in an opinion in which peals as to how to allocate losses among
Judges PIGOTT and ABDUS–SALAAM insurers for injuries potentially triggering
concur. coverage across multiple policy periods.

Order reversed and a new trial ordered. Holdings: The Court of Appeals, Stein, J.,
held that:

,
(1) existence of non-cumulation and prior
insurance provisions in excess insur-
ance policies mandated use of the all
sums allocation method, and
(2) insureds were required to vertically ex-
haust all triggered primary and um-
27 N.Y.3d 244 brella excess layers before tapping into
In the Matter of VIKING PUMP, INC., any of the additional excess policies.
et al., Insurance Appeals. Certified questions answered.

1. Insurance O2112
Viking Pump, Inc., et al., Appellants,

TIG Insurance Company

Generally, proration of liability among
et al., Respondents.
insurers acknowledges the fact that there
Court of Appeals of New York. is uncertainty as to what actually tran-
spired during any particular policy period
May 3, 2016.
in claims alleging a gradual and continuing
Background: Two successors of insured harm.

2. Insurance O1805
pump manufacturer, who were potentially
subject to significant liability in connection
with asbestos exposure claims, brought ac- In determining a dispute over insur-
tion in a Delaware state court against in- ance coverage, courts first look to lan-
surers, seeking to recover under policies guage of the policy.

3. Insurance O1721, 1809

issued to insured. The Delaware Court of
Chancery, Strine, Chancellor, 2 A.3d 76,
ruled that New York law applied to the Insurance contracts, like other agree-
dispute, that both successors were entitled ments, should be enforced as written, and
to coverage under the excess policies, and parties to an insurance arrangement may
that the policies unambiguously provided generally contract as they wish and the
for ‘‘all sums’’ allocation of losses among courts will enforce their agreements with-
insurers. Following transfer, the Delaware out passing on the substance of them.

27
 Session Materials ARIAS•U.S. 2017 Fall Conference

IN RE VIKING PUMP, INC. N. Y. 1145

Cite as 52 N.E.3d 1144 (N.Y. 2016)

4. Insurance O1817, 1820, 1822 la excess layers before tapping into any of
When construing insurance policies, the additional excess policies.
the language of the contracts must be in-
terpreted according to common speech and
consistent with the reasonable expectation
of the average insured.
5. Insurance O1810, 1828
Kirkland & Ellis LLP, Chicago, Illinois
(Michael P. Foradas, of the Illinois bar,
Courts must construe an insurance admitted pro hac vice, Lisa G. Esayian of
policy in a way that affords a fair meaning the Illinois bar, admitted pro hac vice, and
to all of the language employed by the William T. Pruitt of the Illinois bar, admit-
parties in the contract and leaves no provi- ted pro hac vice, of counsel), and Kirkland
sion without force and effect; significantly, & Ellis LLP, New York City (Peter A.
surplusage is a result to be avoided. Bellacosa of counsel), for Viking Pump,

6. Insurance O1808, 1832(1)

Inc., appellant.

While ambiguities in an insurance pol- Kasowitz Benson Torres & Friedman

icy are to be construed against the insurer, LLP, New York City (Robin L. Cohen,
a contract is not ambiguous if the language Elizabeth A. Sherwin and Keith McKenna
it uses has a definite and precise meaning, of counsel), for Warren Pumps LLC, ap-
unattended by danger of misconception in pellant.
the purport of the agreement itself, and Quinn Emanuel Urquhart & Sullivan,
concerning which there is no reasonable LLP, New York City (Kathleen M. Sulli-
basis for a difference of opinion. van of counsel), Simpson Thacher & Bart-
7. Insurance O2285(4) lett LLP, New York City (Mary Kay Vys-
kocil, Summer Craig and Alexander Li of
Existence of non-cumulation and prior
counsel), O’Melveny & Myers LLP, Wash-
insurance provisions in excess liability in-
ington, D.C. (Jonathan D. Hacker, of the
surance policies mandated use of the all
District of Columbia bar, admitted pro hac
sums allocation method, particularly since
vice, of counsel), O’Melveny & Myers LLP,
several of the excess policies also con-
New York City (Tancred Schiavoni, Gary
tained continuing coverage clauses within
Svirsky, Anton Metlitsky and Brad M. Eli-
the non-cumulation and prior insurance
as of counsel), Hinkhouse Williams Walsh
provisions.
8. Insurance O2396
LLP, Chicago, Illinois (Laura S. McKay, of
the Illinois bar, admitted pro hac vice, of
In light of language in excess liability counsel), Day Pitney LLP, Hartford, Con-
insurance policies tying their attachment necticut (Kathleen D. Monnes, of the Con-
only to specific underlying policies in effect necticut bar, admitted pro hac vice, John
during the same policy period as the appli- K. Scully, of the Connecticut bar, admitted
cable excess policy, and in absence of any pro hac vice and John W. Cerreta of coun-
policy language suggesting a contrary in- sel), Clausen Miller P.C., Chicago, Illinois
tent, the excess policies were triggered by (Mark D. Paulson, of the Illinois bar, ad-
vertical exhaustion of the underlying avail- mitted pro hac vice, Amy R. Paulus, of the
able coverage within the same policy peri- Illinois bar, admitted pro hac vice and Don
od, and thus insureds were required, under R. Sampen, of the Illinois bar, admitted
terms of the excess policies, to vertically pro hac vice, of counsel), Zelle Hofmann
exhaust all triggered primary and umbrel- Voelbel & Mason LLP, Framingham, Mas-

28
 Session Materials

1146 N. Y. 52 NORTH EASTERN REPORTER, 3d SERIES

sachusetts (Kristin Suga Heres, of the form to a non-cumulation provision or con-

Massachusetts bar, admitted pro hac vice, tain a non-cumulation and prior insurance
of counsel), and Carroll, McNulty & Kull provision, and (2) whether, in light of our
LLC, Basking Ridge, New Jersey (Heath- answer to the allocation question, horizon-
er E. Simpson and Christopher R. Carroll tal or vertical exhaustion is required be-
of counsel), for respondents. fore certain upper level excess policies at-
tach. We reaffirm that, under New York
Vedder Price P.C., New York City (John
law, the contract language of the applica-
H. Eickemeyer and Daniel C. Green of
ble insurance policies controls each of
counsel), and Wiley Rein LLP, Washing-
these questions, and we answer the certi-
ton, D.C. (Laura A. Foggan and Nicole
fied questions in accordance with the opin-
Audet Richardson of counsel), for Complex
ion herein, concluding that all sums alloca-
Insurance Claims Litigation and another,
tion and vertical exhaustion apply based on
amici curiae.
the language in the policies before us.

S 251I.
Lowenstein Sandler LLP, New York
City (David L. Elkind and Eric Jesse of
counsel), for New York State Electric & The facts and procedural history of the
Gas Corporation, amicus curiae. underlying litigation are explained in
Anderson Kill P.C., New York City more detail in decisions of the Delaware
(Robert M. Horkovich and Edward J. courts (see In re Viking Pump, Inc., –––
Stein of counsel), and Amy Bach, United A.3d ––––, 2015 WL 3618924 [June 10,
Policyholders, San Francisco, California, 2015]; Viking Pump, Inc. v. Century In-
for United Policyholders and others, amici dem. Co., 2014 WL 1305003, 2014 Del.Su-
curiae. per. LEXIS 707 [Feb. 28, 2014, C.A. No.
10C–06–141 FSS CCLD]; Viking Pump,
Jenner & Block LLP, Chicago, Illinois
Inc. v. Century Indem. Co., 2013 WL
(Craig C. Martin, of the Illinois bar, admit-
7098824, 2013 Del.Super. LEXIS 615 [Oct.
ted pro hac vice, and Peter J. Brennan of
31, 2013, C.A. No. 10C–06–141 FSS
counsel), for Olin Corporation, amicus curi-
CCLD]; Viking Pump, Inc. v. Century
ae.
Indem. Co., 2 A.3d 76 [Del.Ch.2009] ). As
Morgan, Lewis & Bockius LLP, Wash- relevant here, Viking Pump, Inc., and
ington, D.C. (Randall M. Levine, Gerald P. Warren Pumps, LLC, acquired pump
Konkel, Stephanie Schuster and Christo- manufacturing businesses from Houdaille
pher M. Popecki of counsel) and Morgan, Industries, Inc. in the 1980s. Those ac-
Lewis & Bockius LLP, Los Angeles, Cali- quisitions later subjected Viking and War-
fornia (David S. Cox of counsel), for ITT ren to significant potential liability in con-
Corporation, amicus curiae. nection with asbestos exposure claims.
Houdaille had extensive multilayer insur-
S 250OPINION OF THE COURT ance coverage spanning from 1972 to 1985
that included coverage for such claims.
STEIN, J. More specifically, Liberty Mutual Insur-
In this complex insurance dispute, we ance Company provided Houdaille with
have accepted two certified questions from primary insurance (totaling approximately
the Delaware Supreme Court asking us to $17.5 million) and umbrella excess cover-
determine (1) whether ‘‘all sums’’ or ‘‘pro age (totaling approximately $42 million)
rata’’ allocation applies where the excess through successive annual policies. Be-
insurance policies at issue either follow yond that, Houdaille obtained additional

29
 Session Materials ARIAS•U.S. 2017 Fall Conference

IN RE VIKING PUMP, INC. N. Y. 1147

Cite as 52 N.E.3d 1144 (N.Y. 2016)

layers of excess insurance through annual stantially the same general conditions TTT
policies issued by various excess insurers shall be considered as the result of one and
(totaling over $400 million in coverage), the same occurrence.’’ The excess policies
including a number of policies issued by issued by the Excess Insurers either fol-
defendants, designated herein as ‘‘the Ex- low form to (i.e., incorporate) these provi-
cess Insurers.’’ sions, or provide for substantively identical
Viking and Warren sought coverage un- coverage.
der the Liberty Mutual policies, and the The majority of the excess policies at
Delaware Court of Chancery determined issue also follow form to a ‘‘non-cumula-
that both companies were entitled to exer- tion’’ of liability or ‘‘anti-stacking’’ provi-
cise rights as insureds under those policies sion in the Liberty Mutual umbrella poli-
(see generally Viking Pump, Inc. v. Liber- cies, which provides that
ty Mut. Ins. Co., 2007 WL 1207107, 2007
‘‘[i]f the same occurrence gives rise to
Del.Ch. LEXIS 43 [Apr. 2, 2007, C.A. No.
personal injury, property damage or ad-
1465–VCS] ). As the Liberty Mutual cov-
vertising injury or damage which occurs
erage neared exhaustion, litigation arose
partly before and partly within any an-
regarding whether Viking and Warren
nual period of this policy, the each oc-
were entitled to coverage under the addi-
currence limit and the applicable aggre-
tional excess policies issued to Houdaille
gate limit or limits of this policy shall be
by the Excess Insurers and, if so, how
reduced by the amount of each payment
indemnity should be allocated across the
made by [Liberty Mutual] with respect
triggered policy periods.
to such occurrence, either under a previ-
Central to the underlying litigation, the ous policy or policies of which this is a
Liberty Mutual umbrella policies provide replacement, or under this policy with
that the insurer respect to previous annual periods
‘‘will pay on behalf of the insured all thereof.’’
sums in excess of the retained limit
Those excess policies that do not follow
S 252legally obligated to pay, or with the
which the insured shall become
form to the Liberty Mutual non-cumula-
consent of the [insurer], agrees to pay, tion provision contain a similar two-part
as damages, direct or consequential, be- ‘‘Prior Insurance and Non[-]Cumulation of
cause of: Liability’’ provision, sometimes referred to
‘‘(a) personal injury TTT as ‘‘Condition C,’’ as follows:
‘‘with respect to which this policy applies ‘‘It is agreed that if any loss covered
and caused by an occurrence’’ (emphasis hereunder is also covered in whole or in
added). part under any other excess Policy is-
‘‘Occurrence’’ is defined, in relevant part, sued to the Insured prior to the incep-
as ‘‘injurious exposure to conditions, which tion date hereof[,] the limit of liability
results in personal injury’’ which, in turn, hereon TTT shall be reduced by any
is defined as ‘‘personal injury or bodily amounts due to the Insured on account
of such loss under such prior insurance.
S 253‘‘Subject to the foregoing paragraph
injury which occurs during the policy peri-
od ’’ (emphasis added). The policies also
state that, ‘‘[f]or the purpose of determin- and to all the other terms and conditions
ing the limits of the [insured’s] liability: of this Policy in the event that personal
(1) all personal injury TTT arising out of injury or property damage arising out of
continuous or repeated exposure to sub- an occurrence covered hereunder is con-

30
 Session Materials

1148 N. Y. 52 NORTH EASTERN REPORTER, 3d SERIES

tinuing at the time of termination of this sions would not apply if liability was ap-
Policy the Company will continue to pro- portioned on a pro rata basis because,
tect the Insured for liability in respect of according to that court, such an interpreta-
such personal injury or property dam- tion would—contrary to New York princi-
age without payment of additional pre- ples of contract interpretation—render the
mium.’’ non-cumulation and prior insurance provi-
In the underlying litigation, the parties sions surplusage (see id. at 124–126). The
cross-moved for summary judgment with Court of Chancery also observed that,
respect to the availability of coverage and
S 254‘‘the only substantial extrinsic evidence
even if the policy language was ambiguous,
the allocation of liability under the excess
policies. The Delaware Court of Chancery offered by the parties weighs in favor of
granted Viking and Warren summary the use of the all sums method’’ because,
judgment on those issues, and denied the
the court asserted, Liberty Mutual had, in
Excess Insurers’ cross motions (2 A.3d at
the past, routinely allocated its liability
130). As a threshold matter, the Court of
under its own policies—to which the excess
Chancery held that New York law applied
policies followed form—in accordance with
to the dispute and that Viking and Warren
the all sums method (id. at 119, 127–129).
were each entitled to coverage under the
excess policies (see id. at 90).1 The Court of Chancery further noted that,
to the extent the policies are ambiguous,
With regard to the allocation issue, the
any ambiguity must be resolved in favor of
Court of Chancery agreed with Warren
the Insureds (see id. at 129–130).
and Viking (hereinafter, collectively, the
Insureds) that the proper method of allo- The matter was transferred to the Dela-
cation was the all sums approach, as com- ware Superior Court (Viking Pump, Inc.
pared with the pro rata allocation method v. Century Indem. Co., 2010 WL 2989690,
propounded by the Excess Insurers (see 2010 Del.Ch. LEXIS 301 [June 11, 2010,
id. at 119–127). The Court of Chancery C.A. No. 1465–VCS] ), where a trial was
acknowledged that this Court had previ- ultimately held (2013 WL 7098824, *6–7,
ously applied the pro rata method in Con-
2013 Del.Super. LEXIS 615, *21–22). A
solidated Edison Co. of N.Y. v. Allstate
verdict was returned largely in the In-
Ins. Co., 98 N.Y.2d 208, 222, 746 N.Y.S.2d
sureds’ favor, and the parties made post-
622, 774 N.E.2d 687 (2002), where the poli-
judgment motions. As relevant here, the
cy language similarly provided that the
Superior Court rejected the Excess Insur-
insurer would pay ‘‘all sums’’ for an occur-
ers’ renewed arguments that pro rata allo-
rence happening ‘‘during the policy period’’
(see 2 A.3d at 120–121). However, the cation applied. The Superior Court also
Court of Chancery distinguished the policy determined that, as a matter of New York
language at issue here from that interpret- law, the Insureds were obligated to hori-
ed in Consolidated Edison on the ground zontally exhaust (i.e., deplete) every trig-
that the non-cumulation and prior insur- gered primary and umbrella layer of insur-
ance provisions in the policies here evinced ance before accessing the excess policies.
a clear and unambiguous intent to use all While the Superior Court agreed with the
sums allocation (see id. at 119–127). The Insureds that policy language supported
Court of Chancery rejected the argument vertical exhaustion, in the court’s view,
of the Excess Insurers that these provi- New York law required that horizontal

1. Neither of those holdings is before us.

31
 Session Materials ARIAS•U.S. 2017 Fall Conference

IN RE VIKING PUMP, INC. N. Y. 1149

Cite as 52 N.E.3d 1144 (N.Y. 2016)

exhaustion be utilized with respect to pri- ing environmental contaminations—in the

mary and umbrella policies.2 insurance context. These types of claims
On appeal, the Delaware Supreme Court present unique complications because they
concluded that resolution of the allocation often involve exposure to an injury-induc-
and exhaustion disputes between the Ex- ing harm over the course of multiple policy
cess Insurers and the Insureds ‘‘depends periods, spawning litigation over which
on significant and unsettled questions of policies are triggered in the first instance,
New York law that have not been an- how liability should be allocated among
swered, in the first instance, by the New triggered policies and the respective insur-
York Court of Appeals’’ (––– A.3d ––––, ers, and at what point insureds may turn
––––, 2015 WL 3618924, *2). Therefore, to excess insurance for coverage. Given the
the Delaware Supreme Court certified, particular certified questions presented
and we accepted, the following questions: here, we are not asked to review the Dela-
‘‘1. Under New York law, is the proper ware courts’ rulings regarding which poli-
method of allocation to be used all sums cies were triggered and upon what events
or pro rata when there are non-cumula- such triggering occurred, and we do not
tion and prior insurance provisions? pass on those issues here.3 Rather, we
‘‘2. Given the Court’s answer to Ques- consider only the allocation and exhaustion
issues, and we first address the question of
on the policy language at S 255issue here,
tion # 1, under New York law and based
allocation.
when the underlying primary and um- The Insureds argue that the losses
brella insurance in the same policy peri- should be allocated through a ‘‘joint and
od has been exhausted, does vertical or several’’ or ‘‘all sums’’ method. This theo-
horizontal exhaustion apply to determine ry of allocation ‘‘permits the insured to
when a policyholder may access its ex- ‘collect its total liability TTT under any
cess insurance?’’ (––– A.3d at ––––, policy in effect during’ the periods that the
2015 WL 3618924, *3; see Matter of damage occurred,’’ up to the policy limits
Viking Pump, Inc., 25 N.Y.3d 1188, 16 (Roman Catholic Diocese of Brooklyn v.
N.Y.S.3d 46, 37 N.E.3d 104 [2015].) National Union Fire Ins. Co. of Pitts-
burgh, Pa., 21 N.Y.3d 139, 154, 969
II. Allocation N.Y.S.2d 808, 991 N.E.2d 666 [2013], quot-
A. ing Consolidated Edison, 98 N.Y.2d 208,
Courts across the country have grappled 222, 746 N.Y.S.2d 622, 774 N.E.2d 687
with so-called ‘‘long-tail’’ claims—such as [2002]; see United States Fid. & Guar. Co.
those seeking to recover for personal inju- v. American Re–Ins. Co., 20 N.Y.3d 407,
ries due to toxic exposure and property 426, 962 N.Y.S.2d 566, 985 N.E.2d 876
damage resulting from gradual or continu- [2013] ). The burden is then on the insur-

2. The Superior Court subsequently limited 3. After the Delaware Court of Chancery held
that ruling to the primary/umbrella layers, that the policies were triggered upon an inju-
holding that horizontal exhaustion did not ry-in-fact that occurred upon asbestos expo-
apply among additional layers of excess cov- sure (2 A.3d 76, 110–111 [Del.Ch.2009] ), the
erage (see Viking Pump, Inc. v. Century Indem. trigger issue was litigated at trial, and the
Co., 2014 WL 1305003, 2014 Del.Super. LEX- Superior Court declined to alter the jury’s
IS 707 [Feb. 28, 2014, C.A. No. 10C–06–141 verdict on this point (see 2013 WL 7098824,
FSS CCLD] ). The propriety of that holding *17–18, 2013 Del.Super. LEXIS 615, *55–58
is not before us. [Super.Ct., Oct. 31, 2013, C.A. No. 10C–06–
141 FSS CCLD] ).

32
 Session Materials

1150 N. Y. 52 NORTH EASTERN REPORTER, 3d SERIES

er against whom the insured S 256recovers to 491 [Del.2001]; American Physicians Ins.
seek contribution from the insurers that Exch. v. Garcia, 876 S.W.2d 842, 855 [Tex.
issued the other triggered policies (see 1994]; J.H. France Refractories Co. v. All-
Consolidated Edison, 98 N.Y.2d at 222, state Ins. Co., 534 Pa. 29, 39, 626 A.2d 502,
746 N.Y.S.2d 622, 774 N.E.2d 687). 507 [1993]; Keene Corp. v. Insurance Co.
[1] The Excess Insurers, by contrast, of N. Am., 667 F.2d 1034, 1047 [D.C.Cir.
advocate for pro rata allocation. Under 1981] ). Others have, instead, utilized the
this method, an insurer’s liability is limited pro rata method, emphasizing language in
to sums incurred by the insured during the the insurance policies that may be inter-
policy period; in other words, each insur- preted as limiting the ‘‘all sums’’ owed to
ance policy is allocated a ‘‘pro rata’’ share those resulting from an occurrence ‘‘during
of the total loss representing the portion of the policy period,’’ or public policy reasons
the loss that occurred during the policy supporting pro rata allocation, or a combi-
period (see Roman Catholic Diocese of nation of the two (see e.g. EnergyNorth
Brooklyn, 21 N.Y.3d at 154, 969 N.Y.S.2d Nat. Gas, Inc. v. Certain Underwriters at
808, 991 N.E.2d 666; Consolidated Edison, Lloyd’s, 156 N.H. 333, 344, 934 A.2d 517,
98 N.Y.2d at 223, 746 N.Y.S.2d 622, 774 526 [2007]; Public Serv. Co. of Colorado v.
N.E.2d 687).4 Generally, ‘‘[p]roration of lia- Wallis & Cos., 986 P.2d 924, 940 [Colo.
bility among the insurers acknowledges
Co., 138 N.J. 437, 473, S 257650 A.2d 974, 992
1999]; Owens–Illinois, Inc. v. United Ins.
the fact that there is uncertainty as to
what actually transpired during any partic- [1994]; Insurance Co. of N. Am. v. Forty–
ular policy period’’ in claims alleging a Eight Insulations, Inc., 633 F.2d 1212,
gradual and continuing harm (Consolidat- 1225 [6th Cir.1980], decision clarified on
ed Edison, 98 N.Y.2d at 224, 746 N.Y.S.2d reh. 657 F.2d 814 [6th Cir.1981], cert. de-
622, 774 N.E.2d 687). nied 454 U.S. 1109, 102 S.Ct. 686, 70
Courts of different states and federal L.Ed.2d 650 [1981] ).
jurisdictions are divided on the issue of
allocation in relation to long-tail claims. We first confronted the question of pro
Some jurisdictions have expressed a pref- rata versus all sums allocation in Consoli-
erence for the all sums method, usually dated Edison, 98 N.Y.2d at 222, 746
relying on language in policies obligating N.Y.S.2d 622, 774 N.E.2d 687. In that
an insurer to pay ‘‘all sums’’ for which an case, we applied the pro rata method to
insured becomes liable (see e.g. State of claims involving environmental contamina-
California v. Continental Ins. Co., 55 tion over a number of years and insurance
Cal.4th 186, 199, 145 Cal.Rptr.3d 1, 281 policy periods. Significantly, we did not
P.3d 1000, 1007 [2012], as mod. [Sept. 19, reach our conclusion in Consolidated Edi-
2012]; Plastics Eng’g Co. v. Liberty Mut. son by adopting a blanket rule, based on
Ins. Co., 315 Wis.2d 556, 583, 759 N.W.2d policy concerns, that pro rata allocation
613, 626 [2009]; Goodyear Tire & Rubber was always the appropriate method of di-
Co. v. Aetna Cas. & Sur. Co., 95 Ohio St.3d viding indemnity among successive insur-
512, 515, 769 N.E.2d 835, 840 [2002]; Her- ance policies. Rather, we relied on our
cules, Inc. v. AIU Ins. Co., 784 A.2d 481, general principles of contract interpreta-

4. Courts have devised different methods of 622, 774 N.E.2d 687 [2002] ). Again, we
fixing losses between policy periods (see Con- have no occasion to discuss these methods in
solidated Edison Co. of N.Y. v. Allstate Ins. this case.
Co., 98 N.Y.2d 208, 224–225, 746 N.Y.S.2d

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IN RE VIKING PUMP, INC. N. Y. 1151

Cite as 52 N.E.3d 1144 (N.Y. 2016)

tion, and made clear that the contract lan- cantly, ‘‘surplusage [is] a result to be
guage controls the question of allocation. avoided’’ (Westview Assoc. v. Guaranty
Natl. Ins. Co., 95 N.Y.2d 334, 339, 717
[2, 3] We emphasized in Consolidated
Edison, and have reiterated thereafter, N.Y.S.2d 75, 740 N.E.2d 220 [2000] ).
that ‘‘ ‘[i]n determining a dispute over in- Moreover, while ‘‘ ‘ambiguities in an insur-
surance coverage, [courts] first look to the ance policy are to be construed against the
language of the policy’ ’’ (Roman Catholic insurer’ ’’ (Dean, 19 N.Y.3d at 708, 955
Diocese of Brooklyn, 21 N.Y.3d at 148, 969 N.Y.S.2d 817, 979 N.E.2d 1143, quotSing258
N.Y.S.2d 808, 991 N.E.2d 666, quoting Breed v. Insurance Co. of N. Am., 46
Consolidated Edison, 98 N.Y.2d at 221, N.Y.2d 351, 353, 413 N.Y.S.2d 352, 385
746 N.Y.S.2d 622, 774 N.E.2d 687; see N.E.2d 1280 [1978]; see Federal Ins. Co. v.
Selective Ins. Co. of Am. v. County of International Bus. Machs. Corp., 18
Rensselaer, 26 N.Y.3d 649, 655, 27 N.Y.3d 642, 650, 942 N.Y.S.2d 432, 965
N.Y.S.3d 92, 47 N.E.3d 458 [2016] ). We N.E.2d 934 [2012] ), a contract is not am-
did not adopt a strict rule mandating ei- biguous ‘‘if the language it uses has a
ther pro rata or all sums allocation be- definite and precise meaning, unattended
cause insurance contracts, like other by danger of misconception in the purport
agreements, should ‘‘be enforced as writ- of the [agreement] itself, and concerning
ten,’’ and ‘‘parties to an insurance arrange- which there is no reasonable basis for a
ment may generally ‘contract as they wish difference of opinion’’ (Selective Ins. Co. of
and the courts will enforce their agree- Am., 26 N.Y.3d at 655, 27 N.Y.S.3d 92, 47
ments without passing on the substance of N.E.3d 458 [internal quotation marks and
them’ ’’ (J.P. Morgan Sec. Inc. v. Vigilant citation omitted] ).
Ins. Co., 21 N.Y.3d 324, 334, 970 N.Y.S.2d In Consolidated Edison, we applied the
733, 992 N.E.2d 1076 [2013], quoting New foregoing principles to the parties’ argu-
England Mut. Life Ins. Co. v. Caruso, 73 ments in support of, and in opposition to,
N.Y.2d 74, 81, 538 N.Y.S.2d 217, 535 pro rata allocation. The arguments pre-
N.E.2d 270 [1989] ).
sented in that case, and our resulting de-
[4–6] When construing insurance poli- cision, turned exclusively upon the inter-
cies, the language of the ‘‘contracts must pretation of two phrases in the insurance
be interpreted according to common policies that were before us: (1) that an
speech and consistent with the reasonable insurer agreed to indemnify the insured
expectation of the average insured’’ (Dean for ‘‘all sums’’ for which the insured was
v. Tower Ins. Co. of N.Y., 19 N.Y.3d 704, liable and which were caused by or arose
708, 955 N.Y.S.2d 817, 979 N.E.2d 1143 out of an ‘‘occurrence’’; and (2) that the
[2012], quoting Cragg v. Allstate Indem. ‘‘policies provide[d] indemnification for lia-
Corp., 17 N.Y.3d 118, 122, 926 N.Y.S.2d bility incurred as a result of an accident
867, 950 N.E.2d 500 [2011] ). Furthermore, or occurrence during the policy period,
‘‘we must construe the policy in a way that not outside that period ’’ (Consolidated
affords a fair meaning to all of the lan- Edison, 98 N.Y.2d at 224, 746 N.Y.S.2d
guage employed by the parties in the con- 622, 774 N.E.2d 687 [emphasis added] ).
tract and leaves no provision without force The Court concluded that ‘‘[p]ro rata allo-
and effect’’ (Roman Catholic Diocese of cation under th[o]se facts, while not ex-
Brooklyn, 21 N.Y.3d at 148, 969 N.Y.S.2d plicitly mandated by the policies, [was]
808, 991 N.E.2d 666 [internal quotation consistent with the language of the poli-
marks and citations omitted] ). Signifi- cies,’’ whereas the mere use of the phrase

34
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1152 N. Y. 52 NORTH EASTERN REPORTER, 3d SERIES

‘‘all sums’’ was insufficient to establish a been in place during the period of the loss’’
contrary view (98 N.Y.2d at 224, 746 (12 Couch on Insurance 3d § 169:5; see 1
N.Y.S.2d 622, 774 N.E.2d 687 [emphasis Barry R. Ostrager & Thomas R. Newman,
added] ). To be sure, we also suggested Handbook on Insurance Coverage Dis-
that, in the absence of language weighing putes § 11.02[e] [16th ed. 2013] ). Such
in favor of a different conclusion, pro rata clauses originated during the shift from
allocation was the preferable method of ‘‘accident-based’’ to ‘‘occurrence-based’’ lia-
allocation in long-tail claims in light of the bility policies in the 1960s and 1970s, and
inherent difficulty of tying specific injuries were purportedly designed to prevent any
to particular policy periods. Neverthe- attempt by policyholders to recover under
less, we recognized that ‘‘different policy a subsequent policy—based on the broader
language’’ might compel all sums alloca- definition of occurrence—for a loss that
tion (98 N.Y.2d at 223, 746 N.Y.S.2d 622, had already been covered by the prior
774 N.E.2d 687), citing, as a point of com- ‘‘accident-based’’ policy (see Jan M. Mi-
parison, to the Delaware Supreme Court’s chaels et al., The ‘‘Non–Cumulation’’
decision in Hercules, Inc. v. AIU Ins. Co., Clause: Policyholders Cannot Have Their
wherein the Delaware Court adopted the Cake and Eat It Too, 61 U. Kan. L. Rev.
all sums method (784 A.2d 481). 701, 717 [2013]; Christopher C. French,
The policy language at issue here, by The ‘‘Non–Cumulation Clause’’: An ‘‘Oth-
inclusion of the non-cumulation clauses and er Insurance’’ Clause by Another Name,
the two-part non-cumulation and prior in- 60 U. Kan. L. Rev. 375, 386 [2011] ). More
surance provisions, is substantively distin- recently, courts have been called upon to
guishable from the language that we inter- analyze the impact of these clauses on the
preted in Consolidated Edison, and the allocation question. Significantly, we have
arguments that were made to us in that enforced non-cumulation clauses in accor-
case were, likewise, different.5 Indeed, dance with their plain language (see Nes-
the excess policies before us here present mith v. Allstate Ins. Co., 24 N.Y.3d 520,
523, 2 N.Y.S.3d 11, 25 N.E.3d 924 [2014];
might compel all S 259sums allocation in Con-
the very type of language that we signaled
Hiraldo v. Allstate Ins. Co., 5 N.Y.3d 508,
solidated Edison. Inasmuch as the ques- 513, 806 N.Y.S.2d 451, 840 N.E.2d 563
tion is now squarely before us, we must [2005] ), despite the limiting impact that
determine whether the presence of a non- such clauses may have on an insured’s
cumulation clause or a non-cumulation and recovery (and, by extension, that of an
prior insurance provision mandates all injured plaintiff). However, we have nev-
sums allocation. er addressed the interplay between non-
cumulation/prior insurance provisions and
B. allocation.
[7] Generally, non-cumulation clauses Courts in other states that have ad-
prevent stacking, the situation in which dressed this issue—both those that have
‘‘an insured who has suffered a long term adopted all sums allocation and a few that
or continuous loss which has triggered cov- have followed a pro rata approach—have
erage across more than one policy period concluded that non-cumulation clauses can-
TTT wishes to add together the maximum not be reconciled with pro rata allocation.
limits of all consecutive policies that have For example, in Chicago Bridge & Iron

5. While such provisions were included in Edison, there was no reference in our deci-
some of the policies at issue in Consolidated sion to their existence.

35
 Session Materials ARIAS•U.S. 2017 Fall Conference

IN RE VIKING PUMP, INC. N. Y. 1153

Cite as 52 N.E.3d 1144 (N.Y. 2016)

Co. v. Certain Underwriters at Lloyd’s, pro-rata sharing methodology has, at its

London, a Massachusetts appellate court core, a public policy that favors maximiz-
rejected pro rata allocation, in part, on the ing, in a fair and just manner, insurance
ground that the non-cumulation/prior in- coverage for cleanup of environmental
surance provision ‘‘would be superfluous disasters. By applying the non-cumula-

would be S 260allocated among insurers

had the drafter intended that damages tion clause, insurers who were actually
‘on the risk’ would be insulated from
based on their respective time on the risk’’ their fair share of liability’’ (176 N.J. at
(59 Mass.App.Ct. 646, 656, 797 N.E.2d 434, 44–45, 819 A.2d at 422; see 15 Couch on
441 [2003] ). Similarly, the Supreme Insurance 3d § 220:30 [‘‘Once a court
Court of Wisconsin supported its determi- has determined that a loss is to be
nation that all sums allocation applied by
shared among sequential insurers on a
pointing to non-cumulation clauses contem-
pro rata basis, ‘prior insurance’ and
plating indemnity where an injury occurs
‘non(-)cumulation of liability’ clauses in
‘‘ ‘partly before and partly within the poli-
the policies become unenforceable’’] ).
cy period’ ’’ (Plastics Eng’g Co., 315 Wis.2d
at 583, 759 N.W.2d at 626; see also Riley These cases are persuasive authority for
v. United Servs. Auto. Assn., 161 Md.App. the proposition that, in policies containing
573, 592, 871 A.2d 599, 611 [2005] [noting non-cumulation clauses or non-Scumula-
that prohibiting stacking would run coun- tion261 and prior insurance provisions, such
ter to pro rata allocation], affd. 393 Md. 55, as the excess policies before us, all sums is
899 A.2d 819 [2006] ). the appropriate allocation method. We
In addition, at least two courts in juris- agree that it would be inconsistent with
dictions that have adopted the pro rata the language of the non-cumulation clauses
allocation method have held that non-cu- to use pro rata allocation here. Such poli-
mulation clauses cannot be enforced in cy provisions plainly contemplate that mul-
conjunction with that method (see Spauld- tiple successive insurance policies can in-
ing Composites Co., Inc. v. Aetna Cas. & demnify the insured for the same loss or
Sur. Co., 176 N.J. 25, 44–46, 819 A.2d 410, occurrence by acknowledging that a cov-
422–423 [2003]; Outboard Mar. Corp. v. ered loss or occurrence may ‘‘also [be]
Liberty Mut. Ins. Co., 283 Ill.App.3d 630, covered in whole or in part under any
670 N.E.2d 740 [1996], lv. denied 169 Ill.2d other excess [p]olicy issued to the [in-
570, 675 N.E.2d 634 [1996] [declining to sured] prior to the inception date’’ of the
enforce non-cumulation clause with pro instant policy.
rata allocation] ). In Spaulding Compos-
ites Co., Inc. v. Aetna Cas. & Sur. Co., the By contrast, the very essence of pro rata
New Jersey Supreme Court explained allocation is that the insurance policy lan-
that, ‘‘even if the non-cumulation clause guage limits indemnification to losses and
was not facially inapplicable, TTT it would occurrences during the policy period—
thwart the TTT pro-rata allocation modali- meaning that no two insurance policies,
ty’’ (176 N.J. at 44, 819 A.2d at 422). That unless containing overlapping or concur-
court reasoned that, rent policy periods, would indemnify the
‘‘[o]nce the court turns to pro rata allo- same loss or occurrence. Pro rata alloca-
cation, it makes sense that the non-cu- tion is a legal fiction designed to treat
mulation clause, which would allow the continuous and indivisible injuries as dis-
insurer to avoid its fair share of respon- tinct in each policy period as a result of the
sibility, drops out of the policyTTTT The ‘‘during the policy period’’ limitation, de-

36
 Session Materials

1154 N. Y. 52 NORTH EASTERN REPORTER, 3d SERIES

spite the fact that the injuries may not that all sums—not pro rata—allocation
actually be capable of being confined to was intended in such policies. The con-
specific time periods. The non-cumulation tinuing coverage clause expressly extends
clause negates that premise by presuppos- a policy’s protections beyond the policy
ing that two policies may be called upon to period for continuing injuries. Yet, under
indemnify the insured for the same loss or a pro rata allocation, no policy covers a
occurrence. Indeed, even commentators loss that began during a particular policy
who have advocated for pro rata allocation period and continued after termination of
and propounded the complications that can that period because that subsequent loss
be caused by all sums allocation have rec- would be apportioned to the next policy
ognized that non-cumulation clauses can- period as its pro rata share. Using the
not logically be applied in a pro rata alloca- pro rata allocation would, therefore, ren-
tion (see Jan M. Michaels et al., The der the continuing coverage clause irrele-
Avoidable Evils of ‘‘All Sums’’ Liability vant. Thus, presence of that clause in the
for Long–Tail Insurance Coverage Claims, respective policies further compels an in-
64 U. Kan. L. Rev. 467, 489 [2015] [‘‘Provi- terpretation in favor of all sums allocation
sions such as the non-cumulation clause (see Hercules, Inc., 784 A.2d at 493–494;
(do) not even apply and need not be ana- Dow Corning Corp. v. Continental Cas.
lyzed under pro rata allocation’’] ). In a Co., Inc., 1999 WL 33435067, *7–8, 1999
pro rata allocation, the non-cumulation Mich.App. LEXIS 2920, *23–24 [Oct. 12,
clauses would, therefore, be rendered sur- 1999, No. 200143 et al.], lv. denied 463
plus-age—a construction that cannot be Mich. 854, 617 N.W.2d 554 [2000]; Boston
countenanced under our principles of con- Gas Co. v. Century Indem. Co., 454 Mass.
tract interpretation (see Roman Catholic 337, 362, 910 N.E.2d 290, 309 [2009]; Lib-
Diocese of Brooklyn, 21 N.Y.3d at 148, 969 erty Mut. Ins. Co. v. Those Certain Under-
N.Y.S.2d 808, 991 N.E.2d 666; Consolidat- writers at Lloyds, 650 F.Supp. 1553, 1559
ed Edison, 98 N.Y.2d at 221–222, 746 [W.D.Pa.1987] ).
N.Y.S.2d 622, 774 N.E.2d 687; Westview The Excess Insurers contend that a con-
Assoc., 95 N.Y.2d at 339, 717 N.Y.S.2d 75, clusion that all sums allocation is required
740 N.E.2d 220), and a result that would would be inconsistent with the Second Cir-
conflict with our previous recognition that cuit’s holding in Olin Corp. v. American
such clauses are enforceable (see Nesmith, Home Assur. Co., 704 F.3d 89, 95 (2d
24 N.Y.3d at 523, 2 N.Y.S.3d 11, 25 N.E.3d Cir.2012) (Olin III ) and those cases that
924; Hiraldo, 5 N.Y.3d at 513, 806 have followed in its stead (see Liberty
N.Y.S.2d 451, 840 N.E.2d 563).6
S 262Several of the excess policies here
Mut. Ins. Co. v. Fairbanks Co., –––
F.Supp.3d ––––, ––––, 2016 WL 1169511,
also contain continuing coverage clauses *7 [S.D.N.Y., Mar. 22, 2016, Nos. 13–CV–
within the non-cumulation and prior insur- 3755 (JGK) & 15–CV–1141 (JGK) ]; Liber-
ance provisions, reinforcing our conclusion ty Mut. Fire Ins. Co. v. J. & S. Supply

6. Notably, the Insurers originally argued to can be given effect with pro rata allocation.
the Delaware courts that the non-cumulation Indeed, according to the Delaware Superior
clauses should not be given effect in a pro Court, even the Excess Insurers’ own witness,
rata allocation. Apparently recognizing that an insurance law professor, conceded that
this would conflict with our principles of con- non-cumulation clauses were inconsistent
tract interpretation—as the Delaware Court of with pro rata allocation (see 2013 WL
Chancery concluded—the Insurers now take 7098824, *12, 2013 Del.Super. LEXIS 615,
the position that the non-cumulation clauses *39).

37
 Session Materials ARIAS•U.S. 2017 Fall Conference

IN RE VIKING PUMP, INC. N. Y. 1155

Cite as 52 N.E.3d 1144 (N.Y. 2016)

Corp., 2015 U.S. Dist. LEXIS 177124, *24– sion required that the losses allocated to
25 [S.D.N.Y., June 29, 2015, No. 13–CV– subsequent years be swept back into the
4784 (VSB) ] ). We discern no such imped- policy periods covering the earlier years.
iment to our holding. The excess insurer, by contrast, argued, as
In Olin I, the Second Circuit held that relevant here, that pro rata allocation was
pro rata allocation applied to distribute the inconsistent with the non-cumulation and
insured’s liability to insurance policies trig- continuing coverage clauses and, conse-
gered by soil and groundwater contamina- quently, those provisions could not be en-
tion resulting from Olin Corporation’s pes- forced in conjunction with pro rata alloca-
ticide manufacturing operations (see Olin tion.
Corp. v. Insurance Co. of N. Am., 221 F.3d The Second Circuit held that the plain
307 [2d Cir.2000] [Olin I ] ). There, the language of the continuing coverage clause

S 263policy reasons supporting pro rata allo-

Second Circuit relied both on public of the prior insurance provision ‘‘require[d]
the insurer to indemnify the insured for
cation, and on language in the insurance personal injury or property damage con-
policies limiting the scope of coverage to tinuing after the termination of the policy’’
damages incurred during the policy period (id. at 100). The court, therefore, divided
(see id. at 324–326). In a later appeal in up the damages for each year as if allocat-
additional related litigation (see Olin Corp. ing them on a pro rata basis, but then
v. Certain Underwriters at Lloyd’s Lon- swept the shares attributable to the years
don, 468 F.3d 120, 127 [2d Cir.2006] [Olin outside the policy period back into the
II ] ), the Second Circuit reaffirmed that earlier policy periods.
its conclusion was consistent with our deci- At first glance, the Second Circuit’s de-
sion in Consolidated Edison. cision in Olin III could be viewed as har-
Subsequently, in Olin III, the issue on monizing the non-cumulation and prior
appeal in related litigation against one of insurance provision containing the con-
Olin’s excess insurance carriers was tinuing coverage clause with pro rata al-
whether the attachment point (i.e., the location. However, the court’s rejection
point at which the insured’s liability trig- of the insurer’s argument that these pro-
gers excess coverage) for two excess poli- visions were inconsistent with pro rata al-

‘‘New S 264York state court decisions and

cies had been met (704 F.3d at 93–95). location turned on its conclusion that
Applying strict pro rata allocation to the
underlying policies, as provided for in Olin those prior decisions of this Court en-
I, the attachment point for the two excess dorsing the pro rata approach foreclose
insurance policies was not reached (see id. [the Court] from interpreting [the non-
at 95). The parties’ arguments in Olin III cumulation and prior insurance provision]
centered upon the ‘‘Prior Insurance and as imposing joint and several liability’’
Non–Cumulation of Liability’’ provision in (id. at 102). As discussed above, our
the underlying policies to which the excess holding in Consolidated Edison does not
policies followed form (id. at 94), which require pro rata allocation in the face of
had not been raised in Olin I or Olin II policy language undermining the very
(see id. at 98). Olin argued that, although premise upon which the imposition of pro
pro rata allocation applied under the Sec- rata allocation rests. In light of the Sec-
ond Circuit’s earlier holding in Olin I, the ond Circuit’s view that it was foreclosed
continuing coverage clause contained in from utilizing all sums allocation—either
the non-cumulation/prior insurance provi- by Consolidated Edison or by its own

38
 Session Materials

1156 N. Y. 52 NORTH EASTERN REPORTER, 3d SERIES

earlier holding in Olin I imposing pro which would allow the Insureds to access
rata allocation—and the fact that the re- each excess policy once the immediately
sulting allocation apportioning numerous underlying policies’ limits are depleted,
years of liability outside the policy period even if other lower-level policies during

ed. The Excess Insurers argue S 265that, if

to the relevant policies closely resembles different policy periods remain unexhaust-
an all sums allocation, the Excess Insur-
ers’ contention that Olin III supports a we utilize all sums allocation, then horizon-
pro rata allocation here is unavailing. tal exhaustion should be applied.7
Nor have those courts that have followed All of the excess policies at issue primar-
Olin III reconciled the language of the ily hinge their attachment on the exhaus-
non-cumulation clause and prior insur- tion of underlying policies that cover the
ance provision with pro rata allocation same policy period as the overlying excess
(see Liberty Mut. Ins. Co. v. Fairbanks policy, and that are specifically identified
Co., ––– F.Supp.3d at ––––, 2016 WL by either name, policy number, or policy
1169511, *7; Liberty Mut. Fire Ins. Co. limit. In our view, vertical exhaustion is
v. J. & S. Supply Corp., 2015 U.S. Dist.
more consistent than horizontal exhaustion
LEXIS 177124, *24–25). Indeed, the Ex-
with this language tying attachment of the
cess Insurers have cited to no authorities
excess policies specifically to identified pol-
satisfactorily reconciling non-cumulation
icies that span the same policy period.
clauses with pro rata allocation.
Further, vertical exhaustion is conceptual-
Accordingly, based on the policy lan- ly consistent with an all sums allocation,
guage and the persuasive authority hold- permitting the Insured to seek coverage
ing that pro rata allocation is inconsistent through the layers of insurance available
with non-cumulation and non-cumula- for a specific year (see Westport Ins. Corp.
tion/prior insurance provisions, we hold v. Appleton Papers Inc., 327 Wis.2d 120,
that all sums allocation is appropriate in 168–169, 787 N.W.2d 894, 919 [Ct.App.
policies containing such provisions, like the 2010], review denied 329 Wis.2d 63, 791
ones at issue here. N.W.2d 66 [2010]; Cadet Mfg. Co. v.
III. Exhaustion American Ins. Co., 391 F.Supp.2d 884, 892
[8] With the allocation issue resolved, [W.D.Wash.2005]; J. Stephen Berry &
we turn to the second question—namely, Jerry B. McNally, Allocation of Insurance
whether horizontal or vertical exhaustion Coverage: Prevailing Theories and Prac-
applies under the relevant policies. That tical Applications, 42 Tort Trial & Ins.
is, we must determine whether the In- Prac. L.J. 999, 1015–1016 [2007] ).
sureds are required under the terms of the The only argument of the Excess Insur-
excess policies to ‘‘horizontally’’ exhaust all ers in support of horizontal exhaustion that
triggered primary and umbrella excess merits discussion is their contention that it
layers before tapping into any of the addi- is compelled by the ‘‘other insurance’’
tional excess insurance policies, or whether clauses in the Liberty Mutual umbrella
the Insureds need only ‘‘vertically’’ ex- policies and the subject excess policies.
haust the primary and umbrella policies, The Liberty Mutual umbrella policies pro-

7. While, in some situations, horizontal ex- neither method necessarily militates in favor
haustion may be beneficial to excess insurers, of insurers or insureds, with much depending
particularly where the underlying layers of on the specifics of the underlying policies and
insurance contain a non-cumulation clause, their limits.
we note that—like with the allocation issue—

39
 Session Materials ARIAS•U.S. 2017 Fall Conference

IN RE VIKING PUMP, INC. N. Y. 1157

Cite as 52 N.E.3d 1144 (N.Y. 2016)

vide that the insurer will pay ‘‘all sums in N.Y.S.2d 584, 684 N.E.2d 14 [1997]; State
excess of the retained limit,’’ which is de- Farm Fire & Cas. Co. v. LiMauro, 65
fined as the relevant limit of liability of N.Y.2d 369, 372, 492 N.Y.S.2d 534, 482
underlying policies, ‘‘plus all amounts pay- N.E.2d 13 [1985]; Lumbermens Mut. Cas.
able under other insurance, if any.’’ An Co. v. Allstate Ins. Co., 51 N.Y.2d 651, 435
‘‘underlying policy’’ is ‘‘a policy listed as an N.Y.S.2d 953, 417 N.E.2d 66 [1980]; Bovis
underlying policy in the declarations,’’ Lend Lease LMB, Inc. v. Great Am. Ins.
which, as already stated, includes only pol- Co., 53 A.D.3d 140, 855 N.Y.S.2d 459 [1st
icies spanning the same policy period as Dept.2008] ). Moreover, our conclusion in
the respective excess policy. Other insur- Consolidated Edison that other insurance
ance, in turn, ‘‘means any other valid and clauses are not implicated in situations in-
collectible insurance (except under an un- volving successive—as opposed to concur-
derlying policy) which is available to the rent—insurance policies finds support in
Insured, or would be available to the In- other jurisdictions (see Ohio Cas. Ins. Co.
sured in the absence of this policy.’’ The v. Unigard Ins. Co., 268 P.3d 180, 184
excess policies have similar clauses provid- [Utah 2012]; Century Indem. Co. v. Liber-
ing for such policies to be excess to other ty Mut. Ins. Co., 815 F.Supp.2d 508, 516
insurance.
S 266The Excess Insurers contend that the
[D.R.I.2011]; Westport Ins. Corp., 327
Wis.2d at 168–169, 787 N.W.2d at 919;
‘‘other insurance’’ available to the Insureds Boston Gas Co., 454 Mass. at 361, 910
includes coverage provided by successive N.E.2d at 308 [the ‘‘other insurance’’ claus-
insurance policies. Their argument in this es simply reflect a recognition of the many
regard is not completely baseless (see Dow situations in which concurrent, not succes-
Corning Corp., 1999 WL 33435067, *9, sive, coverage would exist for the same
1999 Mich.App. LEXIS 2920, *26–29; loss]; LSG Tech., Inc. v. United States
United States Gypsum Co. v. Admiral Ins. Fire Ins. Co., 2010 WL 5646054, *12, 2010
Co., 268 Ill.App.3d 598, 653, 205 Ill.Dec. U.S. Dist. LEXIS 140879, *33–35
619, 643 N.E.2d 1226, 1261 [1994], lv. de- [E.D.Tex., Sept. 2, 2010, No. 2:07–CV–399–
nied 161 Ill.2d 542, 649 N.E.2d 426 DF]; Owens–Illinois, Inc. v. United Ins.
[1995] ). However, we stated in Consoli- Co., 138 N.J. 437, 470, 650 A.2d 974, 991
dated Edison that ‘‘other insurance’’ claus- [1994] ).
es ‘‘apply when two or more policies pro-
vide coverage during the same period, and Here, the Insureds are not seeking mul-
they serve to prevent multiple recoveries tiple recoveries from different insurers un-
from such policies,’’ and that such clauses der concurrent policies for the same loss,
‘‘have nothing to do’’ with ‘‘whether any and the other insurance clause does not
coverage potentially exist[s] at all among apply to successive insurance policies (see
certain high-level policies that were in Consolidated Edison, 98 N.Y.2d at 223,
force during successive years’’ (Consoli- 746 N.Y.S.2d 622, 774 N.E.2d 687). Thus,
dated Edison, 98 N.Y.2d at 223, 746 in light of the language in the excess poli-

underlying policies in effect S 267during the

N.Y.S.2d 622, 774 N.E.2d 687 [emphases cies tying their attachment only to specific
added] ). Those cases relied on by the
Delaware Superior Court do not hold oth- same policy period as the applicable excess
erwise because they each involved instanc- policy, and the absence of any policy lan-
es of concurrent insurance policies (see e.g. guage suggesting a contrary intent, we
American Home Assur. Co. v. Interna- conclude that the excess policies are trig-
tional Ins. Co., 90 N.Y.2d 433, 437, 661 gered by vertical exhaustion of the under-

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1158 N. Y. 52 NORTH EASTERN REPORTER, 3d SERIES

lying available coverage within the same

policy period (see United States Fid. & 27 N.Y.3d 337
Guar. Co. v. American Re–Ins. Co., 20 The PEOPLE of the State of
N.Y.3d at 428, 962 N.Y.S.2d 566, 985 New York, Respondent,
N.E.2d 876; 2 Barry R. Ostrager & Thom-
v.
as R. Newman, Handbook on Insurance
Coverage Disputes § 13.14). Quanaparker HOWARD, Appellant.

Court of Appeals of New York.

IV.
May 3, 2016.
Accordingly, following certification of
questions by the Supreme Court of Dela- Background: Following respondent’s
ware and acceptance of the questions by criminal conviction for unlawful imprison-
this Court pursuant to section 500.27 of ment of a child, the County Court, Erie
the Rules of Practice of the Court of Ap- County, Kenneth F. Case, J., adjudicated
peals (22 NYCRR 500.27), and after hear- respondent as a level three sex offender in
ing argument by counsel for the parties a proceeding under the Sex Offender Reg-
and consideration of the briefs and the istration Act (SORA), and respondent ap-
record submitted, the certified questions pealed. The Supreme Court, Appellate Di-
should be answered in accordance with vision, 125 A.D.3d 1331, 999 N.Y.S.2d 783,
this opinion. affirmed. Leave to appeal was granted.
Holding: The Court of Appeals, DiFiore,
C.J., held that hearing court reasonably
Chief Judge DiFIORE and Judges
declined to engage in downward departure
PIGOTT, RIVERA, ABDUS–SALAAM
from presumptive risk level three.
and FAHEY concur; Judge GARCIA
taking no part. Affirmed.
Rivera, J., filed dissenting opinion.
Following certification of questions by
the Supreme Court of Delaware and accep-
tance of the questions by this Court pursu- 1. Mental Health O469(4)
ant to section 500.27 of the Rules of Prac-
In a proceeding under the Sex Offend-
tice of the Court of Appeals (22 NYCRR
er Registration Act (SORA), the hearing
500.27), and after hearing argument by
court has the discretion to depart from a
counsel for the parties and consideration of
presumptive level, although such a depar-
the briefs and the record submitted, certi-
ture should be the exception, not the rule.
fied questions answered in accordance with
McKinney’s Correction Law § 168–n(3).

2. Mental Health O469(3)

the opinion herein.

In determining whether to depart

from a presumptive risk level under the

,
Sex Offender Registration Act (SORA),
the hearing court weighs the aggravating
or mitigating factors alleged by the depar-
ture-requesting party to assess whether,
under the totality of the circumstances, a
departure is warranted. McKinney’s Cor-
rection Law § 168–n(3).

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 Session Materials ARIAS•U.S. 2017 Fall Conference

Thursday, November 2, 2017

3:00 p.m. – 3:50 p.m. & 4:15 p.m. – 5:05 p.m.
BREAKOUT SESSION
Arbitrating and Managing Small Disputes
Cost- Effectively: Strategies for Arbitrators,
Counsel, and Company Representatives
SESSION MATERIALS:
ARIAS•U.S. Streamlined Rules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42

The AIRROC Dispute Resolution Procedure . . . . . . . . . . . . . . . . . . . . . . . . . 50

PRESENTED BY:
Steve Kennedy, Clyde & Co.
Diane Nergaard, ARIAS•U.S. Certified Arbitrator
Jane Parker, W. R. Berkley Corporation

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ARIAS • U.S. STREAMLINED RULES

FOR SMALL CLAIM DISPUTES

1. INTRODUCTION

1.1 These procedures shall be known as the ARIAS • U.S. Streamlined Rules for
the Resolution of U.S. Insurance and Reinsurance Disputes (“Rules”) and
shall apply only to claims for monetary relief and where the amount in dispute
is $1,000,000 or less or in any other cases where the parties agree. For
purposes of calculating the amount in dispute, the affirmative claims of both
Parties to the arbitration, as of the time of the Organizational Meeting, not
including interest, will be considered separately and independently of one
another and will not be combined together to arrive at the total amount in
dispute. After the Organizational Meeting, the Umpire has the discretion to
permit a party to increase its affirmative claim in excess of the $1,000,000
limit up to a total amount of $2 million upon a showing of good cause.

When an agreement, submission or reference provides for or otherwise refers

to arbitration under the ARIAS • U.S. Streamlined Rules for the Resolution of
U.S. Insurance and Reinsurance Disputes, the Parties agree that the arbitration
shall be conducted in accordance with these Rules.

1.2 Any dispute concerning the interpretation of these Rules shall be determined
by the Umpire.

1.3 The Umpire shall have all powers and authority not inconsistent with these
Rules, the agreement of the Parties, or applicable law.

2. DEFINITIONS

2.1 The definitions in Rule 2 of the ARIAS • U.S. Rules for the Resolution of
U.S. Insurance and Reinsurance Disputes in effect at the time the Parties adopt
these Rules are incorporated by reference into these Rules.

3. NOTICE AND TIME PERIODS

3.1 Rule 3 (Notice and Time Periods) of the ARIAS • U.S. Rules for the
Resolution of U.S. Insurance and Reinsurance Disputes in effect at the time
the Parties adopt these Rules is incorporated by reference into these Rules.

4. COMMENCEMENT OF ARBITRATION PROCEEDINGS

4.1 An arbitration shall be initiated by Notice of Arbitration, in writing, that

identifies the (1) Petitioner and the name of the contact person to whom all
communications are to be addressed (including telephone and e-mail

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information); (2) Respondent against whom arbitration is sought; (3)

contract(s) at issue; and (4) a short and plain statement of the nature of the
claims and/or issues, including the amount in dispute.

4.2 The arbitration is commenced under these Rules on the date the Respondent,
or its designated representative, receives the Notice of Arbitration.

5. RESPONSE BY RESPONDENT

5.1 Parties who receive a Notice of Arbitration shall respond to it, in writing,
within thirty (30) days, and such Response shall contain (1) the identification
of the entities on whose behalf the Response is sent and the name of the
contact person to whom all communications are to be addressed (including
telephone and e-mail information); (2) a short and plain response to the
Petitioner’s statement of the nature of its claims and/or issues; and (3) a short
and plain statement of any claims and/or issues asserted by Respondent
against Petitioner, including the amount in dispute.

6. APPOINTMENT AND COMPOSITION OF THE PANEL

6.1 The arbitration shall be conducted by a single umpire. The Parties may
mutually agree on a single umpire. If the Parties are unable to do so within
thirty (30) days of the response by the respondent referred to in ¶ 5.1, each
Party will select four (4) Umpire candidates from the list of the ARIAS • U.S.
Certified Arbitrators. The Parties will jointly send Umpire questionnaire
forms (ARIAS • U.S. form, unless otherwise agreed) to the eight (8) selected
Umpire candidates for completion and simultaneous return to the Parties
within ten (10) days. Within seven (7) days after receipt of completed
questionnaires, each Party will strike three (3) names from the other Party’s
list and simultaneously exchange the name of the remaining candidates. The
Parties will select the Umpire from among the remaining two (2) candidates
by drawing lots or another method acceptable to both Parties.

6.2 Unilateral contact between a Party or its representative(s) on the one hand,
and an individual considered for appointment as an Umpire on the other hand,
shall not be permitted.

6.3 If after appointment an Umpire is unable or unwilling to serve, a replacement

Umpire shall be chosen by the Parties as soon as practical (but no later than
fourteen (14) days) after notification of the Umpire's inability or
unwillingness to serve. Where the Parties are unable to reach agreement, the
Parties shall appoint a replacement Umpire in accordance with the procedure
set forth in ¶ 6.1.

6.4 Unless otherwise awarded by the Umpire pursuant to ¶ 8.2 or ¶ 11.7, each
Party shall share equally the cost of the Umpire.

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7. CONFIDENTIALITY

7.1 Unless otherwise agreed by the Parties, or ordered by the Umpire upon the
motion of a Party and a showing of good cause, all meetings and hearings
with the Umpire are private and confidential to the Parties. Only the Umpire,
the Parties, the duly authorized representatives of the Parties and others
participating in the proceedings may be admitted to meetings and hearings. If
the Parties agree that any meeting or hearing is to be non-confidential, they
shall inform the Umpire of their agreement as soon as reasonably practical
after reaching it.

7.2 Unless otherwise agreed by the Parties, or ordered by the Umpire upon the
motion of a Party and a showing of good cause, the Umpire and the Parties
shall use their best efforts to maintain the confidential nature of the arbitration
proceedings and any Decision, including the hearing and any written
explanation of any Decision, except (a) as necessary in connection with a
judicial proceeding relating to the arbitration or any Decision; (b) as otherwise
required by law, regulation, independent accounting audit or judicial decision;
(c) if the arbitration proceedings relate to a direct insurance dispute, then to
support the insurer's reinsurance recoveries; (d) if the arbitration proceedings
relate to a reinsurance dispute, then to support the reinsurer's retrocessional
recoveries; or (e) as otherwise agreed by the Parties. The Parties shall use
their best efforts to maintain this confidentiality when pursuing any of the
exceptions set forth in this paragraph, including the filing of pleadings under
seal when permitted.

8. INTERIM DECISIONS

8.1 The Umpire may issue Decisions for interim relief. Consistent with ¶¶ 9.7
and 10.4, respectively, the Parties are not permitted to make motions on the
merits or formal discovery motions.

8.2 The Umpire shall have the power to impose sanctions for failure to comply
with an interim Decision by the Umpire or for discovery-related abuse. Such
possible sanctions may include but are not limited to: striking a claim or
defense; excluding evidence on an issue; drawing an adverse inference against
a Party; and imposing costs, including attorneys’ fees, associated with such
abuse or failure to comply.

9. PRE-HEARING PROCEDURE

9.1 The Umpire shall conduct an Organizational Meeting with the Parties and any
authorized representatives of the Parties for the purposes of clarifying the
focus of the arbitration hearing, resolving any outstanding issues relating to

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the conduct of the hearing and establishing a schedule for the conduct of the
proceedings in general.

9.2 The Organizational Meeting shall be held as soon as possible after the
selection of the Umpire but in no event shall it be held later than thirty (30)
days after the selection of the Umpire. The Umpire shall take into
consideration this and other scheduling requirements set forth in these Rules
when accepting appointments. The parties will jointly advise umpire
candidates either in the umpire questionnaire or some other communication of
the scheduling requirements that must be taken into consideration when
accepting appointments. Unless the Umpire orders otherwise, the
Organizational Meeting shall be conducted by video conference or
telephonically.

9.3 Prior to the Organizational Meeting, the Parties shall confer and seek
agreement on all issues that are expected to be considered at the
Organizational Meeting, with a focus on those items identified in ¶ 9.7.

9.4 Five (5) days prior to the Organizational Meeting, each Party shall submit a
position statement to the Umpire. The position statement shall not exceed five
double-spaced pages in length using 12 point font of the Times New Roman,
Courier or similar business-oriented type face variety. With the exception of
the insurance or reinsurance contract(s), exhibits to the position statement
shall not be permitted, unless expressly requested by the Umpire or agreed by
the Parties. If requested by the Umpire, permissible exhibits may include, as
applicable, only: (a) the billing(s) and documents provided specifically in
support of the billing(s) or, where the dispute does not concern a billing, such
documents that specifically relate and succinctly capture the disputed issue;
(b) correspondence between the Parties specifically relating to the matter in
dispute; and (c) depending upon the nature of the dispute, the category or
categories of documents determined by the Umpire or as mutually agreed by
the Parties to be relevant to the specific matter in dispute.

9.5 At the Organizational Meeting, the Umpire shall reveal on the record his or
her past, present and any known future business and personal relationships
with the Parties, the Parties’ counsel, and with potential witnesses if identified
in documents provided to the Umpire. Once disclosures have been made by
the Umpire, Parties may be asked by the Umpire to accept his or her service as
Umpire in the arbitration. The Umpire shall have a continuing obligation to
disclose such information to the Parties.

9.6 At the Organizational Meeting, and prior to any request that the Parties accept
the Umpire's service in the arbitration, the Umpire shall disclose whether any
Party representative, or counsel contacted him or her regarding any work done
in return for compensation (e.g., service on a Panel, expert work, consulting
work) to the extent not already disclosed in his or her completed ARIAS•U.S.

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Neutral Umpire Questionnaire. The Umpire shall have a continuing

obligation to disclose whether either Party or their respective counsel or
representatives have approached him or her to serve on an arbitration panel in
other matters or to work in any other capacity.

9.7 At the Organizational Meeting, the Umpire shall set a schedule for the
arbitration. The schedule shall include: (1) a date certain for the hearing on
the merits; and (2) a date for the exchange of documents based on the
categories outlined in ¶ 10.1 and as determined by the Umpire at the
Organizational Meeting. At the Organizational Meeting, the Umpire may
address any other matters relating to scheduling, discovery and the
administration of the arbitration, including Hold Harmless or indemnification
agreements from the Parties flowing to the Umpire and whether the ARIAS •
U.S. form agreement should be used as well as confidentiality agreements to
ensure the confidentiality provided in Article 7.

Motions on the merits shall not be permitted at the Organizational Meeting or

at any other point in time prior to the hearing on the merits

9.8 A formal record or transcript of the Organizational Meeting shall be kept,

unless waived by the Parties. The cost of the record or transcript shall be
shared equally by the Parties. The Umpire shall place on the record the
disclosures required by ¶¶ 9.5 and 9.6.

9.9 The Umpire may allow the Parties to present a brief overview of the matters
set forth in ¶ 9.4, whether or not written submissions were requested or
received by the Umpire.

10. DISCOVERY

10.1 Automatic document discovery shall be limited to the following categories of

documents: (a) the insurance or reinsurance contract(s); (b) the placement and
underwriting files; (c) if a reinsurance dispute, the ceded and assumed
reinsurance claim files; (d) if a reinsurance dispute, the reinsured policy(ies);
(e) the billing(s) and documents provided specifically in support of the
billing(s) or, where the dispute does not concern a billing, such documents
that specifically relate and succinctly capture the disputed issue; (f)
correspondence between the Parties specifically relating to the matter in
dispute; and (g) depending upon the nature of the dispute, the category or
categories of documents, including, but not limited to, the underwriting and
claims files relating to the reinsured policy(ies), determined by the Umpire at
the Organizational meeting to be relevant to the specific matter in dispute, or
as mutually agreed by the Parties.

10.2 The Umpire shall have additional discretion regarding document discovery on
the following categories of documents: (a) documents relating to other

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insurance or reinsurance contracts not in dispute; and (b) (i) underwriting or

claim handling manuals and/or (ii) documents relating to non-parties, upon a
showing of good cause and in recognition that the purpose of these procedures
is to streamline discovery, reduce costs, and efficiently resolve disputes.

10.3 Documents required under ¶ 10.1 shall be exchanged by the Parties no later
than sixty (60) days after the Organizational Meeting. If any document is
withheld from production under ¶ 10.1 pursuant to a claim of attorney-client
privilege, work product, or other applicable privilege or protection, the Party
asserting such claim shall, contemporaneously with its document production,
serve upon the other Party a privilege log meeting the requirements of Fed. R.
Civ. P. 26(b)(5). If a Party does not have a particular category of documents,
then they shall so state to the other Party and the Umpire. The Parties may
mutually agree to expand or restrict the categories of documents to be
produced. Any such agreement shall be in writing and communicated to the
Umpire. If a Party fails to produce documents in one of the predetermined
categories, or to state the non-existence of such documents, the Umpire may
make an adverse inference against the non-producing Party.

10.4 No formal document discovery motions shall be permitted. Any dispute

regarding document discovery shall be resolved by the Umpire after hearing
the positions of both sides during a video conference or conference call,
unless the dispute is raised in a Party's position statement or during the
Organizational Meeting.

10.5 Depositions shall not be permitted without leave of the umpire, which will be
granted for good cause shown. No more than two (2) depositions will be
permitted per side and no deposition shall last more than seven (7) hours.
Depositions will be completed no later than ninety (90) days after the
Organizational Meeting.

10.6 No expert discovery shall be permitted.

11. HEARING ON THE MERITS

11.1 The hearing on the merits shall be set no later than one hundred and eighty
(180) days after the Organizational Meeting. The hearing shall be scheduled
for one (1) day and shall be held in the location specified in the Arbitration
Agreement or as otherwise agreed by the Parties; if the Arbitration Agreement
is silent on the location and the Parties cannot otherwise agree, the location
shall be selected by the Umpire, after consultation with the Parties. The
Parties may agree with the Umpire to conduct the hearing by video conference
or telephonically. If the hearing is to be held in person, the Umpire shall
permit the Parties or witnesses so choosing, if any, to appear at the hearing by

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video conference or telephonically. The hearing shall last for no longer than
eight (8) hours, excluding breaks, and no live testimony shall be given at the
hearing, unless mutually agreed by the Parties or requested by the Umpire.
The remainder of the rules and procedures governing the hearing shall be
established by the Umpire, provided said rules and procedures do not
contravene these Rules.

11.2 All principal briefs, documents in support, and deposition transcripts shall be
provided to the Umpire no later than twenty (20) days prior to the hearing.
Principal briefs shall be limited to ten (10) double-spaced pages in length
using 12 point font of the Times New Roman, Courier or similar business-
oriented type face variety. Documents in support of a Party’s position shall be
limited to documents exchanged in discovery. The entirety of a deposition
video or transcript shall be provided to the Umpire. No later than fifteen (15)
business days prior to the hearing, a Party may, but is not required to, submit a
reply brief to the Umpire. The reply brief, if any, shall be limited to three (3)
double-spaced pages in length.

11.3 No evidence from expert witnesses shall be submitted by the parties to the
Umpire.

11.4 After receiving the Parties’ submissions, the Umpire shall decide whether an
in-person hearing is required and if so, whether live testimony shall be
permitted. If the Umpire decides that an in-person hearing is not required, he
or she shall inform the Parties at least ten (10) business days prior to the
scheduled hearing.

11.5 Within three (3) business days prior to the hearing, the Umpire may, but is not
required to, submit questions or topics that any he or she would like the
parties to address at the hearing. Notwithstanding a request from the Umpire
for certain questions or topics to be addressed at hearing, no additional
briefing shall be permitted.

11.6 The decision or award by the Umpire shall not have any res judicata or
collateral estoppel effect.

11.7 The Umpire is authorized to award monetary damages, pre- or post award
interest, costs of arbitration and attorneys’ fees. The Umpire may not award
declaratory relief, injunctive relief, rescission or any other equitable relief.
The Umpire may not make findings of bad faith or award punitive damages.

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THE AIRROC DISPUTE

RESOLUTION PROCEDURE

September 2014 Edition

AIRROC  Dispute  Resolution  Procedure  :  September  2014  Edition   1  

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 Session Materials

THE AIRROC DISPUTE RESOLUTION PROCEDURE

The AIRROC Dispute Resolution Procedure (the “Procedure”) was developed in 2008 and 2009
by a subcommittee of AIRROC’s Legislative and Amicus Committee. The Procedure is intended
especially for less-complicated disputes, or those that would be cost-prohibitive to submit to
plenary industry arbitration practices. It is expected that the Procedure will be of interest and
serve as a valuable tool to parties able to agree on a more expedited method of resolution. The
parties must agree on what specific disputes will be submitted for resolution under these rules.

Below is the September 2014 Edition of the Procedure, which will be amended from time to
time.

I. Arbitrator List
A. AIRROC shall maintain and periodically update a list of arbitrators (the “List”), which
together with arbitrator resumes will be available on its website. To be considered for
inclusion, an applicant must complete an Arbitrator Application (Form 1) and submit it to
AIRROC’s Executive Director, along with a current resume. The required qualifications
are: (1) certification in good standing by ARIAS*U.S. to serve as an arbitrator; or (2) at
least ten years’ employment by one or more insurance or reinsurance companies or other
entities in an insurance group, including companies in run-off or receivership and risk-
bearing syndicates. ARIAS-certified arbitrators will be designated with an asterisk on the
List.

B. AIRROC reserves the right at any time to: (1) approve or disapprove a candidate’s
application for inclusion on the List; (2) remove an arbitrator’s name from the List; or (3)
amend the criteria for inclusion (including retroactive application to persons who qualified
under previous criteria).

C. Notwithstanding the above, AIRROC relies on the information provided by applicants and
makes no representations whatsoever regarding the accuracy or completeness thereof.

D. Commencing January 1, 2015, AIRROC will periodically contact all of its approved
arbitrators to certify/update contact information. As part of that process, arbitrators will be
asked to state how many times in the last calendar year he/she was appointed as an
arbitrator pursuant to the Procedures.

II. Initiation of Proceedings

A. To initiate use of the Procedure, the parties must jointly complete an Initiation of
Proceedings Form (“IOPF”) (Form 2). The IOPF requires the parties, among other things,
to identify the contract or contracts at issue in the arbitration; to stipulate to the claim(s)
and any counterclaim(s) to be arbitrated; and to state the principal amount sought in respect
of each claim and any counterclaim to the extent possible. The IOPF will thus define the

AIRROC  Dispute  Resolution  Procedure  :  September  2014  Edition   2  

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parameters of the dispute, the subject matter of the arbitration, and the scope of the
arbitrator’s authority. In agreeing to be bound by the Procedure, the parties stipulate that
the arbitration will be strictly limited to the subject matter identified in the IOPF, absent
their written agreement to an extension or change.

B. The parties are encouraged to discuss at the outset their respective views and expectations
on significant issues, including: (1) the substantive issues in dispute; (2) the contemplated
need for documents or other discovery (especially important given the consensual nature of
discovery under these rules); (3) whether any party expects to submit its case via in-house
or outside counsel; and (4) the need, length, and form of any evidence to be presented at a
hearing. It is recommended that the parties shall have discussed each of these points before
agreeing to use the Procedure.

C. To initiate the arbitrator selection process administered by AIRROC and described in

Section III of the Procedure, the parties must jointly submit to AIRROC’s Executive
Director: (1) the completed IOPF; and (2) an Arbitrator Referral & Disclosure Form
(Form 3A) with Part I completed. (Part II of the latter form is for prospective arbitrators to
complete and shall be left blank by the parties.) Arbitrator selection will then proceed in
accordance with Section III.

D. The parties are encouraged to reach agreement on the arbitrator without AIRROC’s
involvement. Where the parties can agree on the arbitrator at the outset of the proceeding,
they should proceed with arbitration under these rules without informing AIRROC or
submitting the documents described in Paragraph C, above. An alternative Arbitrator
Referral & Disclosure Form designed to assist the parties in selecting an arbitrator by
consent is attached as Form 3B. No party shall have ex parte communications with any
prospective arbitrator.

E. The parties shall send the completed IOPF to the arbitrator no later than the time of his or
her selection.

III. Arbitrator Selection Administered by AIRROC

A. AIRROC is available to assist in arbitrator selection when requested by the parties. The
parties must indicate on the IOPF whether they prefer AIRROC to select prospective
arbitrators from the entire List or, alternatively, only from the ARIAS-certified arbitrators
designated on the List. After receiving the IOPF and applicable Arbitrator Referral &
Disclosure Form submitted by the parties (see Section II.C.), AIRROC will select 15
names at random and inform the persons selected, by email, that they are in contention to
serve as arbitrator of the parties’ dispute. AIRROC will attach the Arbitrator Referral &
Disclosure Form to its email and request each prospective arbitrator to complete and return
Part II (Availability & Disclosure Statement) by email within one week. (AIRROC shall
have no responsibility to verify the accuracy or completeness of the disclosures received.)
After identifying the timely submitted responses of prospective arbitrators indicating an
availability to serve, AIRROC will notify the parties simultaneously of the candidates

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remaining in contention and provide copies of such candidates’ completed statements and
resumes.

B. Next, not later than one week after the above notification from AIRROC, the parties will
simultaneously exchange their respective choices of just over half of the remaining names
as acceptable arbitrator candidates. For example, if 11 of the original 15 candidates remain
in contention, each party will select six names. This process will result in at least one match
among the parties’ selections. If there is just one match, then that person shall be the
arbitrator. If there is more than one match, then the parties will notify
AIRROC’s Executive Director, and AIRROC will have the arbitrator chosen by lot from
the parties’ matched selections.

C. Notwithstanding the commencement of the arbitrator selection process described in this

section, the parties are free to reach agreement on the arbitrator at any time before its
completion. (Where AIRROC is continuing to play a role in administration, the parties
should inform AIRROC of any such agreement as soon as possible.) The parties should
then proceed with arbitration as provided below.

D. No party shall have ex parte communications with any prospective arbitrator during the
selection process described herein.

IV. Procedural Rules

A. Organizational Meeting: Not later than 21 days after the arbitrator is notified of his or her
selection, the parties and the arbitrator will conduct an organizational conference by
telephone, unless the parties agree to an adjournment or a meeting in person. At the
conference, the arbitrator will make further disclosures to the parties as appropriate. Unless
there is a clear, fundamental conflict precluding the arbitrator’s engagement, the parties
will indicate their acceptance of the arbitrator. The parties will further describe the issues
in dispute to the arbitrator, and a schedule for all activities in the proceeding will be
established. The schedule will be enforced absent the parties’ agreement to change it or the
occurrence of exigent and unanticipated circumstances to be determined at the discretion of
the arbitrator.

B. Discovery: There shall be no discovery or any motions or applications for discovery,

unless the parties agree otherwise. However, nothing shall preclude the arbitrator, sua
sponte, from requiring the production of specified documents that the arbitrator considers
necessary for the proper resolution of the dispute.

C. Preliminary Relief: There shall be no motions or applications for preliminary relief, unless
the parties agree otherwise.

D. Hearing: The dispute shall be submitted to the arbitrator on briefs and documentary
evidence only (i.e., no live witness testimony), unless the parties agree otherwise. Oral
argument or presentations on the briefs and documents submitted may be directed by the
arbitrator in his or her discretion, or when requested jointly by the parties. The duration of

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any argument or presentations, together with any live witness testimony agreed to by the
parties (all of which shall be referred to collectively as the “Hearing”), shall not exceed one
day, unless the parties agree otherwise, or the arbitrator considers additional oral
presentations or additional live witness testimony necessary for the proper resolution of the
dispute.

E. Affidavits: The arbitrator will have authority to determine whether affidavits will be
permitted and, if so, what rules will be followed as to such affidavits regarding their
subject matter, scope, timing, rebuttal, and the like.

F. Award: The arbitrator shall render a written award not later than 30 days after the
submission of briefs or the conclusion of the Hearing, if any. Such award will set forth the
disposition of the claims(s) and any counterclaim(s) asserted and the relief granted,
if any. However, the arbitrator will not issue a “reasoned” award, unless the parties agree
otherwise.

G. Communications: No party shall at any time from the commencement of the arbitrator
selection process have ex parte communications with the arbitrator concerning any aspect
of the proceeding.

V. Fees
A. Arbitrator Fees: The arbitrator shall charge an hourly rate of $150, which will be
apportioned equally among the parties. In addition, each party shall bear an equal share of
the arbitrator’s reasonable expenses. Upon the arbitrator’s initial selection, each party shall
pay a $2,000 retainer to the arbitrator. Half of the retainer ($1,000 per party) will be non-
refundable to the parties and kept by the arbitrator as minimum compensation regardless of
the length of the proceeding. The retainer will be applied to the arbitrator’s final statement
for services rendered at the conclusion of the proceeding, with any balance returned at that
time, subject to the above minimum. All fees of the arbitrator will be paid directly to the
arbitrator.

B. AIRROC Service Fee: Regardless of whether AIRROC administers arbitrator selection,

AIRROC will not charge any service fee to member companies for use of the Procedure. If
a member company has a dispute with a non-member company(ies) and the parties agree to
use AIRROC to administer arbitrator selection, AIRROC will charge the nonmember
company(ies) a total service fee of $1,000. If none of the companies in a dispute is a
member of AIRROC but the non-members agree to use AIRROC to administer arbitrator
selection, AIRROC will charge the non-members a total service fee of $2,000. Any fee due
shall be paid in full to AIRROC simultaneously with the submission of documents
described in Section II.C. AIRROC shall have no obligation to refund payment under any
circumstances (e.g., even if settlement occurs or the parties agree on the arbitrator without
AIRROC having rendered service).

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VI. Confidentiality
A. Unless the parties agree otherwise in writing, the parties and arbitrator (including all
prospective arbitrators) agree to maintain the confidentiality of all papers, communications,
statements, submissions, materials, processes, orders, and awards (“Information”) in
connection with the arbitration. Confidentiality of the Information will remain in effect after
conclusion of the arbitration. Disclosure of any Information may be made only to the extent
necessary:

(i) to enforce, confirm, vacate, or modify an order or award of the arbitrator;

(ii) in communications with auditors retained by a party or with regulatory authorities or

their agents;

(iii) to seek recovery from retrocessionaires regarding the subject matter of the arbitration;
or

(iv) to comply with lawful subpoenas or orders of any court or other arbitration panel.

B. The parties will make good faith efforts to limit the extent of any disclosure of the
Information and will cooperate with each other in resisting or limiting disclosure to the
extent reasonable and appropriate.

VII. Hold Harmless and Indemnification

A. The parties agree that they shall not assert any claim, file any suit, or initiate any action of
any kind against the arbitrator or AIRROC concerning any matter arising from an
arbitration conducted under the Procedure. Each party further agrees jointly and severally
to release, protect, defend, indemnify, and hold harmless the arbitrator, AIRROC, and its
officers, principals, directors, employees, agents, representatives, and affiliates from and
against any and all claims, liabilities, judgments, losses, damages, demands, causes of
action, attorney’s fees, expert fees, expenses, and the like, in law or in equity, directly or
indirectly arising from an arbitration conducted under the Procedure, including for any
alleged non-performance of services. Each party further agrees jointly and severally to
reimburse the arbitrator and AIRROC for all reasonable expenses (including attorney’s
fees) as they are incurred in connection with the investigation of, preparation for, or
defense against any pending or threatened claim arising from an arbitration conducted
under the Procedure.

B. The arbitrator agrees not to assert any claim, file any suit, or initiate any action of any kind
against AIRROC or its officers, principals, directors, employees, agents, representatives,
and affiliates concerning any matter arising from the Procedure or an arbitration
thereunder, including any derivative claim for a suit or action brought against the arbitrator
or any claim by the arbitrator to collect unpaid fees.

C. Paragraphs A and B are non-cancelable and of unlimited duration.

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D. Nothing in this section shall abridge any right that a party may have with respect to another
party to seek to enforce, confirm, vacate, or modify any order or award that the arbitrator
may render, or any right of the arbitrator to collect fees due from a party.

VIII. Absence of Precedential or Preclusive Effect

Unless the parties agree otherwise in writing, it is stipulated by the parties that any arbitration
conducted under the Procedure is solely for the purpose of resolving the specific dispute or
disputes that the parties have designated as constituting the subject matter of the arbitration; and,
to the fullest extent permitted by law, it is further stipulated that any award or ruling will not be
subject to collateral estoppel or res judicata or have any other precedential or preclusive effect
beyond the strict confines of the subject matter.

IX. Confirmation and Enforcement

The parties agree that the award of the arbitrator will be fully binding concerning any matter
submitted for arbitration and that the award can be confirmed by any court of competent
jurisdiction. Any petition to confirm or vacate the award will be filed under seal to the extent
permitted by the court. Notwithstanding the above, no party shall seek to confirm a monetary
award that has been paid in full.

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Thursday, November 2, 2017

3:00 p.m. – 3:50 p.m. & 4:15 p.m. – 5:05 p.m.
BREAKOUT SESSION
Discovery – A Matter of Balance. Keeping a
Watchful Eye on the Objective
SESSION MATERIALS:
Draft Arbitration Clauses & Hypothetical. . . . . . . . . . . . . . . . . . . . . . . . . . . 58

Miller Brewing Co. v. Fort Ií/orth Dist. Co., Inc.,78l F.2d494(1936). . . . . . . . 65

Burton v. Bush,614F.2d 389 (4th Cir. 1980). . . . . . . . . . . . . . . . . . . . . . . . . . . 72

AVAILABLE IN ONLINE MATERIALS ONLY

U.S. ex rel. TGK Enterprises, Inc. v. Clayco, 1nc.,978 F.Supp.2d 540
(E.D.N.C.1e8o).

PRESENTED BY:
Don Frechette, Locke Lord LLP
Christopher Bello, General Re Life Corporation
Jonathan Rosen, Arbitration, Mediation and Expert Witness Services
Aimee Hoben, The Hartford

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Thursday, November 2, 2017

2:00 p.m. – 2:50 p.m. & 3:00 p.m. – 3:50 p.m.
BREAKOUT SESSION
Privilege and its Perils: Insights and Strategies
for Addressing Privilege Issues in Arbitrations
SESSION MATERIALS:
Privilege and its Perils – Written Session Materials . . . . . . . . . . . . . . . . . . 76

PRESENTED BY:
Patricia Fox, AIG
Chuck Ehrlich, ARIAS•U.S. Certified Arbitrator
Nick Cramb, Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.

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Privilege and its Perils

I. Basics of Attorney-Client Privilege

A. State law applies the rule of decision.

1. Federal Rule of Evidence 501 provides, "in a civil case, state law governs
privilege regarding a claim or defense for which state law supplies the rule
of decision.”

2. Generally speaking, there is a high degree of uniformity between and among

states. See, e.g., Phillips v. C.R. Bard, Inc., 290 F.R.D. 615, 625 (D.Nev.
2013) (“Nonetheless, Bard recognizes that under New Jersey, Arizona, and
Nevada law, the basic substantive elements of the attorney-client privilege
are the same . . . [U]nder each state’s law, confidential communications
between an attorney and client made for the purpose of giving or receiving
legal advice are privileged.”) Id. (internal citations omitted).

B. Purpose of attorney-client privilege

1. “The principle upon which these communications are protected from

disclosure applies to every attempt to give them in evidence, without the
assent thereto of the person making them. That principle is, that he who
seeks aid or advice from a lawyer ought to be altogether free from the dread
that his secrets will be uncovered; to the end that he may speak freely and
fully all that is in his mind.” Bacon v. Frisbie, 80 N.Y. 394, 400 (1880); see
also Priest v. Hennessy, 51 N.Y.2d 62 (1980).

2. "The lawyer-client privilege rests on the need for the advocate and
counselor to know all that relates to the client’s reasons for seeking
representation if the professional mission is to be carried out.” Trammel v.
United States, 445 U.S. 40, 51 (1980).

3. The purpose of the protection is to protect not only the giving of

professional advice to those who can act on it but also the giving of
information to the lawyer to enable him or her to give sound and informed
advice and to encourage full and frank communication between attorneys
and their clients, thereby promoting broader public interests in the
observance of law and administration of justice. Upjohn, Co. v. United
States, 449 U.S. 383, 389 (1981)

C. Elements of the Privilege

1. Protects confidential communications between lawyer and client that relate

to the client's seeking of legal advice or services.

2. Communications need not involve litigation – applies to any matters where

the client seeks legal advice. Bacon v. Frisbie, 80 N.Y. at 400.

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3. “The privilege applies only if (1) the asserted holder of the privilege is or
sought to become a client; (2) the person to whom the communication was
made (a) is a member of the bar of a court, or his subordinate and (b) in
connection with this communication is acting as a lawyer; (3) the
communication relates to a fact of which the attorney was informed (a) by
his client (b) without the presence of strangers (c) for the purpose of
securing primarily either (i) an opinion on law or (ii) legal services or (iii)
assistance in some legal proceeding, and not (d) for the purpose of
committing a crime or tort; and (4) the privilege has been (a) claimed and
(b) not waived by the client.” U.S. v. United Shoe Machinery Corp., 89
F.Supp. 357, 358-59 (D. Mass. 1950); see also People v. Mitchell, 58
N.Y.2d 368, 373 (1983).

4. In the United States, privilege can be asserted as to communications from

the client to/from its in-house counsel, provided the other elements of the
privilege are met. U.S. v. United Shoe Machinery Corp., 89 F.Supp. 357,
360 (D. Mass. 1950).

5. “The [attorney-client] privilege applies to communications with attorneys,

whether corporate staff counsel or outside counsel.” Rossi v. Blue Cross
and Blue Shield of Greater New York, 73 N.Y.2d 588, 592 (1989).

6. Communications relating solely to non-legal business matters are not

privileged. People v. Belge, 1977, 59 A.D.2d 307, 399 N.Y.S.2d 539 (4th
Dep't); see also U.S. v. United Shoe Machinery Corp., 89 F.Supp. 357, 359-
60 (D. Mass. 1950) (“Where a communication neither invited nor expressed
any legal opinion whatsoever, but involved the mere soliciting or giving of
business advice, it is not privileged.”); TVT Records v. Island Def Jam
Music Group, 214 F.R.D. 143, 146 (S.D.N.Y. 2003); Koumoulis v. Indep.
Fin. Mktg. Group, 295 F.R.D. 28, 48 (E.D.N.Y. 2013).

7. The test when the communication involves a mixture of legal and business
considerations is whether the legal character of the communication is
“predominant.” Rossi v. Blue Cross and Blue Shield of Greater New York,
73 N.Y.2d 588, 594 (1989); United States v. Davis, 131 F.R.D. 391, 401
(S.D.N.Y. 1990); In re Currency Conversion Fee Antitrust Litig., 2002
U.S.Dist.LEXIS 21196, at *5-6 (S.D.N.Y. Nov. 1, 2002).

8. Generally, the protection of privilege extends only to communications, not

facts. Upjohn Co. v. United States, 449 U.S. 383, 395 (1981).

9. The mere delivery of a document to the attorney does not make it privileged.
King v. Ashley, 96 A.D. 143, 146 (1904).

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II. Work-Product Doctrine

A. The work-product doctrine is a rule of discovery.

B. Codified in FRCP 26(b)(3)(A) and state rules of procedure.

C. Protects materials that are prepared in anticipation of litigation from discovery.

D. Protection for work product can be overcome if:

1. the materials are otherwise discoverable (relevant, not privileged) and

2. the party seeking discovery shows that it (i) has a “substantial need” for the
materials and cannot obtain their equivalent without “undue hardship”

3. BUT, even if this showing (substantial need and undue hardship) is made,
in ordering discovery, the court “must protect against disclosure of the
mental impressions, conclusions, opinions, or legal theories of a party's
attorney or other representative concerning the litigation.”

FRCP 26(b)(3)(B)

E. However, “[d]ocuments or portions of documents that qualify as “opinion work

product” are ‘entitled to virtually absolute protection.’” United States v. Mount
Sinai Hospital, 185 F.Supp.3d 383, 390 (S.D.N.Y. 2016)

III. Waiver

A. “At Issue” Doctrine

1. “‘At issue’ waiver of privilege occurs where a party affirmatively places the
subject matter of its own privileged communication at issue in litigation, so
that invasion of the privilege is required to determine the validity of a claim
or defense of the party asserting the privilege, and application of the
privilege would deprive the adversary of vital information.” Deutsche Bank
Trust Co. of Americas v. Tri-Links Inv. Trust, 43 A.D.3d 56, 63-64 (1st
Dept. 2007).

a. Where a party asserts reliance upon the advice of counsel as an

affirmative defense (usually to a claim of bad faith) that party puts
the privileged advice “at issue” and “waives the attorney-client
privilege with respect to all communications to or from counsel
concerning the transactions for which counsel’s advice was sought.”
Village Bd. of Village of Pleasantville v. Rattner, 130 A.D.2d 654,
655 (2nd Dept 1987).

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b. A party does not put its privileged communications "at issue" merely
by alleging that it was, for instance, not negligent, or that it did not
engage in willful misconduct. See Bank of New York v. River
Terrace Associates, LLC, 23 A.D.3d 308, 311 (1st Dept. 2005);
American Re-Insurance Co. v. U.S. Fidelity & Guar. Co., 40 A.D.3d
486, 492 (1st Dept. 2007) (Ceding insurer does not put privileged
communications at issue merely by alleging that its settlement was
reasonable and in good faith, nor are the communications put in
issue by reinsurer’s contention that a portion of the payment was
made in settlement of bad faith claims).

2. “[T]hat a privileged communication contains information relevant to issues

the parties are litigating does not, without more, place the contents of the
privileged communication itself “at issue” in the lawsuit[.]” Deutsche Bank
Trust Co. of Americas v. Tri-Links Inv. Trust, 43 A.D.3d 56, 64 (1st Dept.
2007); see also American Re-Insurance Co. v. U.S. Fidelity & Guar. Co.,
40 A.D.3d 486 (1st Dept. 2007) (“The only category of potential materials
that is subject to disclosure based on substantial need is trial preparation
materials.”).

3. “Disclosure of the mere fact of a consultation is no basis for a waiver as to

the content of that consultation.” AMBAC Indem. Corp. v. Bankers Trust
Co., 151 Misc.2d 334, 341 (NY Supreme NY Cty 1991).

4. A cedent does not waive the privilege by seeking coverage under its
reinsurance. AIU Insurance Company v. TIG Insurance Co., 2008 WL
5062030, *12-13 (S.D.N.Y. 2008).

B. Disclosure to third parties

1. General rule: “communications between an attorney and a client that are

made in the presence of or subsequently disclosed to third parties are not
protected by the attorney-client privilege.” Ambac Assur. Corp. v.
Countrywide Home Loans, Inc., 27 N.Y.3d 616, 620 (2016).

2. Exceptions

a. Inadvertent disclosure

b. Common Interest

(1) “[A]n attorney-client communication that is disclosed to a

third party remains privileged if the third party shares a
common legal interest with the client who made the
communication and the communication is made in
furtherance of that common legal interest.” Ambac Assur.
Corp. v. Countrywide Home Loans, Inc., 27 N.Y.3d 616, 620
(2016).

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(2) The New York Court of Appeals recently held that the
common interest doctrine permits a limited disclosure of
confidential communications only to parties who share (i) “a
common legal (as opposed to business or commercial)
interest” (ii) “in pending or reasonably anticipated
litigation.” Ambac Assur. Corp. v Countrywide Home
Loans, Inc., 27 N.Y. 3d 616, 622 (2016).

(3) In light of Ambac and other courts finding that cedents and
reinsurers do not share a common interest, cedents risk
waiving the attorney-client privilege by sharing privileged
communications with reinsurers. See, e.g., Mass. Bay Ins.
Co. v. Stamm, 700 N.Y.S.2d 707, 708 (App. Div. 2000)
(“the insurers waived any attorney-client privilege with
respect to documents transmitted to the reinsurers”);
Progressive Casualty Insurance Co. v. Federal Deposit
Insurance Corp, 49 F. Supp. 3d 545 (N.D. Iowa Oct. 3,
2014) (“Progressive also failed to establish that an
agreement between it and its reinsurers established a
'cooperative and common enterprise towards an identical
legal strategy.’”); Bancinsure, Inc. v. McCaffree (D. Kan.
Oct. 4, 2013) (same).

(4) However, courts grappling with these issues have reached

varying results. See, e..g, ARTRA 524(g) Asbestos Trust v.
Transp. Ins. Co. 2011 U.S.Dist.LEXIS 110272, at *45
(N.D.Ill. Sep. 28, 2011) (common interest exists in
cedent/reinsurer relationship); Hawker v. Bankinsurance,
Inc., 2013 WL 6843088 (E.D.Cal. Dec. 27, 2013) (same);
United States v. BDO Seidman, 492 F.3d 806, 816 (7th Cir.
2007), cert. denied sub. nom Cuillo v. U.S., 522 U.S. 1242
(2008) (no litigation requirement).

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(5) Even where there is a common interest, the doctrine does not
provide a means for one party to force production of the
privileged documents of another. See, e.g., Am. Re-
Insurance Co. v. United States Fid. & Guar. Co., 40 A.D.3d
486, 491 (App. Div. 1st Dept. 2007) (“the parties' interests
in the present action are indisputably adverse, and the mere
fact that they shared an interest in the eventual outcome of
the underlying coverage litigation is not sufficient to create
a common interest so as to defeat USF & G's claimed
privileges.”)

C. Audit Rights

1. Access to Records and Cooperation Clauses do not require disclosure of

privileged communications

a. “Access to records provisions in standard reinsurance agreements,

no matter how broadly phrased, are not intended to act as a per se
waiver of the attorney-client or attorney work product privileges. To
hold otherwise would render these privileges meaningless.” Gulf
Ins. Co. v. Transatlantic Reinsurance Co., 13 A.D.3d 278, 279 (1st
Dept. 2004).

b. "Paragraphs four and five of the arbitration award discuss the access
to records arguments, stating in part: 'The Access to Records clause
does not grant Respondents access to Petitioners' documents
protected by the attorney-client privilege or the work product
doctrine (hereinafter "Confidential Material"). Petitioners have sole
discretion to determine the extent to which access to and copies of
Confidential Material will be provided.'" Liberty Mut. Ins. Co. v.
Nationwide Mut. Ins. Co. 87 Mass.App.Ct. 1127, fn. 4 (2015)
(affirming arbitration award denying access to privileged
documents).

c. “Although a reinsured may contractually be bound to provide its

reinsurer with all documents or information in its possession that
may be relevant to the underlying claim adjustment and coverage
determination, absent more explicit language, it does not through a
cooperation clause give up wholesale its right to preserve the
confidentiality of any consultation it may have with its attorney
concerning the underlying claim and its coverage determination.
Provided that the reinsured has been forthright in making available
to its reinsurer all factual knowledge or documentation in its
possession relevant to the underlying claim or the handling of that
claim, it has satisfied its obligations under the cooperation clause.

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The reinsurer is not entitled under a cooperation clause to learn of

any and all legal advice obtained by a reinsured with a ‘reasonable
expectation of confidentiality.’” North River Ins. Co. v.
Philadelphia Reinsurance Corp., 797 F.Supp. 363, 369 (D. N.J.
1992); Travelers Cas. & Surety Co. v. Century Indemn. Co., 2011
WL 5570784 (D.Conn. Nov. 16, 2011) (“reinsurer is not entitled
under a cooperation clause to learn … legal advice obtained by a
reinsured with a reasonable expectation of confidentiality.”)

IV. Conclusion

A. Being mindful of the contours of the attorney-client privilege, exceptions thereto,

and methods of waiver is critical, especially in light of jurisdictional differences.

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Thursday, November 2, 2017

2:00 p.m. – 2:50 p.m. & 3:00 p.m. – 3:50 p.m.
BREAKOUT SESSION
The Gatekeeper: A Practical Guide to
Resolving Evidentiary Disputes at Hearing
SESSION MATERIALS:
The Gatekeeper – Written Session Materials . . . . . . . . . . . . . . . . . . . . . . . 84

PRESENTED BY:
Nina Caroselli, RiverStone Resources, LLC
John F. Chaplin, Compass Reinsurance Consulting LLC
Catherine Isely, Butler Rubin Saltarelli & Boyd LLP

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THE GATEKEEPER: A PRACTICAL GUIDE

TO RESOLVING EVIDENTIARY DISPUTES AT HEARING 1

In Breakout Session #1, panelists will present participants with a series of evidentiary disputes
that arise in a hypothetical arbitration between a policyholder and its insurer. Participants will
then rule anonymously through live e-polling.

Panelists will presume participants are familiar with the attached hypothetical, which provides
background facts necessary to make considered rulings on the evidentiary disputes. To simulate
the speedy rulings arbitrators must make at hearing, the actual evidentiary disputes will not be
presented in advance. The outline below provides guidance that participants may find useful in
preparing to rule.

Following a review of voting results on the evidentiary disputes, panelists and participants will
discuss how a court hearing a motion to vacate might consider challenges to participants’ rulings.

I. IDENTIFY THE RULES

Chapter III: The Organizational Meeting

3.13, Comment D: The Panel should consider whether the relevant arbitration clause
designates specified procedural rules (e.g., the American Arbitration Association
Commercial Arbitration Rules, or the Procedures for the Resolution of U.S. Insurance
and Reinsurance Disputes), whether particular rules apply to an international arbitration,
and/or whether the parties have agreed to any other set of procedural rules.
ARIAS-U.S. Practical Guide, available at https://www.arias-us.org/arias-us-dispute-
resolution-process/practical-guide.

A. Contract Language: Rules Not Specified

Sample Clause: The Arbitration Panel shall not be obligated to follow the strict
rules of law or evidence.

Sample Clause: The Panel shall interpret this contract as an honorable

engagement, and shall not be obligated to follow the strict rules of evidence. In
making their decision, the Panel shall apply the custom and practice of the
insurance and reinsurance industry, with a view to affecting the general purpose
of this contract.

1
These written materials, and any associated commentary as part of Breakout Session #1, are provided for general
educational purposes. They are not intended to be, and should not be taken as, legal advice. Positions described in
these materials or by the presenters during Breakout Session #1 are offered for discussion purposes, and do not
necessarily reflect those of the presenters or their organizations or clients.

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B. Contract Language: Rules Specified

1. ARIAS-U.S. RULES FOR THE RESOLUTION OF U.S.

INSURANCE AND REINSURANCE DISPUTES, available at
http://www.arias-us.org/wp-content/uploads/2016/09/ARIASU.S.-
Rules.pdf

14. ARBITRATION HEARING

* * *
14.2 The Panel may decide whether and to what extent there should be oral
or written evidence or submissions.

14.3 The Panel shall not be obligated to follow the strict rules of law or
evidence.

* * *

14.4 Subject to the control of the Panel, the Parties may question any
witnesses who appear at the hearing. Panel members may also question
such witnesses.

* * *

14.6 The Panel shall require that witnesses testify under oath, unless
waived by all Parties. The Panel shall have the discretion to permit
testimony by telephone, affidavit, or recorded by transcript, videotape, or
other means, and may rely upon such evidence as it deems appropriate.
Where there has been no opportunity for cross examination by the other
Party, such evidence may be permitted by the Panel only for good cause
shown. The Panel may limit testimony to exclude evidence that would be
immaterial or unduly repetitive, provided that all Parties are afforded the
opportunity to present material and relevant evidence.

* * *

14.8 When the Panel decides that all relevant and material evidence and
arguments have been presented, the Panel shall declare the evidentiary
portion of the hearing closed.

2. AAA COMMERCIAL ARBITRATION RULES, available at

https://www.adr.org/sites/default/files/Commercial%20Rules.pdf

R-32. Conduct of Proceedings

(a) The claimant shall present evidence to support its claim. The
respondent shall then present evidence to support its defense. Witnesses

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for each party shall also submit to questions from the arbitrator and the
adverse party. The arbitrator has the discretion to vary this procedure,
provided that the parties are treated with equality and that each party has
the right to be heard and is given a fair opportunity to present its case.
(b) The arbitrator, exercising his or her discretion, shall conduct the
proceedings with a view to expediting the resolution of the dispute and
may direct the order of proof, bifurcate proceedings and direct the parties
to focus their presentations on issues the decision of which could dispose
of all or part of the case.
(c) When deemed appropriate, the arbitrator may also allow for the
presentation of evidence by alternative means including video
conferencing, internet communication, telephonic conferences and means
other than an in-person presentation. Such alternative means must afford a
full opportunity for all parties to present any evidence that the arbitrator
deems material and relevant to the resolution of the dispute, and, when
involving witnesses, provide an opportunity for cross-examination.
(d) The parties may agree to waive oral hearings in any case and may also
agree to utilize the Procedures for Resolution of Disputes Through
Document Submission, found in Rule E-6.

R-34. Evidence
(a) The parties may offer such evidence as is relevant and material to the
dispute and shall produce such evidence as the arbitrator may deem
necessary to an understanding and determination of the dispute.
Conformity to legal rules of evidence shall not be necessary. All evidence
shall be taken in the presence of all of the arbitrators and all of the parties,
except where any of the parties is absent, in default, or has waived the
right to be present.
(b) The arbitrator shall determine the admissibility, relevance, and
materiality of the evidence offered and may exclude evidence deemed by
the arbitrator to be cumulative or irrelevant.
(c) The arbitrator shall take into account applicable principles of legal
privilege, such as those involving confidentiality of communications
between a lawyer and client.
(d) An arbitrator or other person authorized by law to subpoena witnesses
or documents may do so upon the request of any party or independently.

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II. SEEK FAIRNESS AND EFFICIENCY

A. ARIAS-U.S. CODE OF CONDUCT, available at https://www.arias-us.org/arias-

us-dispute-resolution-process/code-of-conduct

CANON II
FAIRNESS: Arbitrators shall conduct the dispute resolution process in a fair
manner and shall only serve in those matters in which they can render a just
decision. If at any time the arbitrator is unable to conduct the process fairly or
render a just decision, the arbitrator should withdraw.

CANON VII
ADVANCING THE ARBITRAL PROCESS: Arbitrators shall exert every
reasonable effort to expedite the process and to promptly issue procedural
communications, interim rulings, and written awards.

* * *

Comment 3. Arbitrators should make all reasonable efforts to prevent delaying

tactics, harassment of parties or other participants, or other abuse or disruption of
the arbitration process.

Comment 4. Arbitrators should be patient and courteous to the parties, to their

lawyers and to the witnesses, and should encourage (and, if necessary, order)
similar conduct of all participants in the proceedings.

Comment 5. Arbitrators may question fact witnesses or experts during the hearing
for explanation and clarification to help them understand and assess the testimony;
however, arbitrators should refrain from assuming an advocacy role and should
avoid interrupting counsel’s examination unless clarification is essential at the time.

B. ARIAS-U.S. PRACTICAL GUIDE, available at https://www.arias-us.org/arias-

us-dispute-resolution-process/practical-guide

Chapter V: Hearing and Award

5.1, Comment: The Panel should carefully consider any request to postpone a
hearing, including whether a delay could unfairly disadvantage one party. The
Panel and the parties should also endeavor to complete the testimony and
argument within the allotted time. Requests to reconvene to hear additional
testimony in the event the allotted time is not sufficient to complete the hearing
should be granted selectively. The Panel, however, should afford the parties
ample time to present their case and should allow continuances in appropriate
cases.

C. FEDERAL RULES OF EVIDENCE, available at

http://www.uscourts.gov/sites/default/files/rules-of-evidence.pdf

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RULE 102. These rules should be construed so as to administer every proceeding

fairly, eliminate unjustifiable expense and delay, and promote the development of
evidence law, to the end of ascertaining the truth and securing a just
determination.

RULE 611. Mode and Order of Examining Witnesses and Presenting Evidence
(a) Control by the Court; Purposes. The court should exercise reasonable
control over the mode and order of examining witnesses and presenting evidence
so as to:
(1) make those procedures effective for determining the truth;
(2) avoid wasting time; and
(3) protect witnesses from harassment or undue embarrassment.
(b) Scope of Cross-Examination. Cross-examination should not go beyond
the subject matter of the direct examination and matters affecting the witness’s
credibility. The court may allow inquiry into additional matters as if on direct
examination.
(c) Leading Questions. Leading questions should not be used on direct
examination except as necessary to develop the witness’s testimony. Ordinarily,
the court should allow leading questions:
(1) on cross-examination; and
(2) when a party calls a hostile witness, an adverse party, or a witness
identified with an adverse party.

III. ASSESS THE RELEVANCE AND RELIABILITY OF EVIDENCE

A. RELEVANCE

RULE 401. Test for Relevant Evidence

Evidence is relevant if:
(a) it has any tendency to make a fact more or less probable than it would be
without the evidence; and
(b) the fact is of consequence in determining the action.

Advisory Committee Notes: “. . . The fact to which the evidence is directed need
not be in dispute. While situations will arise which call for the exclusion of
evidence offered to prove a point conceded by the opponent, the ruling should be
made on the basis of such considerations as waste of time and undue prejudice
(see Rule 403), rather than under any general requirement that evidence is
admissible only if directed to matters in dispute. Evidence which is essentially
background in nature can scarcely be said to involve disputed matter, yet it is
universally offered and admitted as an aid to understanding. . .”

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RULE 402. General Admissibility of Relevant Evidence

Relevant evidence is admissible unless any of the following provides otherwise:
• the United States Constitution;
• a federal statute;
• these rules; or
• other rules prescribed by the Supreme Court.
Irrelevant evidence is not admissible.

RULE 403. Excluding Relevant Evidence for Prejudice, Confusion, Waste of

Time, or Other Reasons
The court may exclude relevant evidence if its probative value is substantially
outweighed by a danger of one or more of the following: unfair prejudice,
confusing the issues, misleading the jury, undue delay, wasting time, or
needlessly presenting cumulative evidence.

Advisory Committee Notes: “The case law recognizes that certain circumstances
call for the exclusion of evidence which is of unquestioned relevance. These
circumstances entail risks which range all the way from inducing decision on a
purely emotional basis, at one extreme, to nothing more harmful that merely
wasting time, at the other extreme. Situations in this area call for balancing the
probative value of and need for the evidence against the harm likely to result from
its admission. . . . While it can scarcely be doubted that claims of unfair surprise
may still be justified despite procedural requirements and instrumentalities of
discovery, the granting of a continuance is a more appropriate remedy than
exclusion of evidence. . . .”

RULE 406. Habit; Routine Practice

Evidence of a person’s habit or an organization’s routine practice may be
admitted to prove that on a particular occasion the person or organization acted in
accordance with the habit or routine practice. The court may admit this evidence
regardless of whether it is corroborated or whether there was an eyewitness.

Advisory Committee Notes: “. . . It describes one’s regular response to a repeated

specific situation. . . . The doing of the habitual acts may become semi-
automatic.”

B. RELIABILITY

RULE 602. Need for Personal Knowledge

A witness may testify to a matter only if evidence is introduced sufficient to
support a finding that the witness has personal knowledge of the matter. Evidence
to prove personal knowledge may consist of the witness’s own testimony. This
rule does not apply to a witness’s expert testimony under Rule 703.

Advisory Committee Notes: “[T]he rule . . . is a ‘most pervasive manifestation’

of the common law insistence upon ‘the most reliable sources of information.’”

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RULE 701. Opinion Testimony by Lay Witnesses

If a witness is not testifying as an expert, testimony in the form of an opinion is
limited to one that is:
(a) rationally based on the witness’s perception;
(b) helpful to clearly understanding the witness’s testimony or to determining
a fact in issue; and
(c) not based on scientific, technical, or other specialized knowledge within
the scope of Rule 702.

RULE 801. Definitions That Apply to This Article; Exclusions from Hearsay
* * *
(c) Hearsay. “Hearsay” means a statement that:
(1) the declarant does not make while testifying at the current trial or
hearing; and
(2) a party offers in evidence to prove the truth of the matter asserted
in the statement.
* * *

RULE 803. Exceptions to the Rule Against Hearsay – Regardless of Whether the
Declarant Is Available as a Witness
* * *
(5) Recorded Recollection. A record that:
(A) is on a matter the witness knew about but now cannot recall well
enough to testify fully and accurately;
(B) was made or adopted by the witness when the matter was fresh in
the witness’s memory; and
(C) accurately reflects the witness’s knowledge.
If admitted, the record may be read into evidence but may be received as
an exhibit only if offered by an adverse party.

(6) Records of a Regularly Conducted Activity. A record of an act, event,

condition, opinion, or diagnosis if:
(A) the record was made at or near the time by — or from information
transmitted by — someone with knowledge;
(B) the record was kept in the course of a regularly conducted activity
of a business, organization, occupation, or calling, whether or not
for profit;
(C) making the record was a regular practice of that activity;
(D) all these conditions are shown by the testimony of the custodian or
another qualified witness, or by a certification that complies with
Rule 902(11) or (12) or with a statute permitting certification; and
(E) neither the source of information nor the method or circumstances
of preparation indicate a lack of trustworthiness.

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(7) Absence of a Record of Regularly Conducted Activity. Evidence that a

matter is not included in a record described in paragraph (6) if:
(A) the evidence is admitted to prove that the matter did not occur or
exist;
(B) a record was regularly kept for a matter of that kind; and
(C) neither the possible source of the information nor other
circumstances indicate a lack of trustworthiness.

RULE 807. Residual Exception

(a) In General. Under the following circumstances, a hearsay statement is
not excluded . . .:
(1) the statement has equivalent circumstantial guarantees of
trustworthiness;
(2) it is offered as evidence of a material fact;
(3) it is more probative on the point for which it is offered than any
other evidence that the proponent can obtain through reasonable
efforts; and
(4) admitting it will best serve the purposes of these rules and the
interests of justice.
* * *

IV. RULE ON EVIDENTIARY DISPUTES

A. EVIDENTIARY DISPUTE HYPO #1

B. EVIDENTIARY DISPUTE HYPO #2

C. EVIDENTIARY DISPUTE HYPO #3

D. EVIDENTIARY DISPUTE HYPO #4

E. EVIDENTIARY DISPUTE HYPO #5

V. UNDERSTAND THE IMPACT

Survey of decisions where challenges to award included evidentiary rulings:

Panel Award Confirmed

Petroleum Separating Co. v. Interamerican Ref. Corp., 296 F.2d 124 (2d Cir. 1961)
(affirming district court’s denial of motion to vacate award, explaining that arbitrators
were entitled to accept hearsay evidence from both parties and cautioning that parties
who “wish to rely on such technical objections . . . should not include arbitration clauses
in their contracts”).

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In re Compudyne Corp., 255 F. Supp. 1004 (E.D. Pa. 1966) (denying motion to vacate
award, despite arbitrator’s exclusion of other project testimony as irrelevant and alleged
admission as hearsay, explaining that “[m]ere errors on points of evidence have never
been considered adequate grounds for the vacation of an award”).

Barker v. Gov’t Emps. Ins. Co., 339 F. Supp. 1064 (Dist. D.C. 1972) (denying motion to
vacate award, finding that party’s assertion that arbitrator abused his authority in
admitting certain hospital records into evidence was “entirely lacking in merit”).

Farkas v. Receivable Fin. Corp., 806 F. Supp. 84 (E.D. Va. 1992) (enforcing arbitration
award, holding that “as a matter of law, the arbitrators did not exceed their power by
considering hearsay evidence”).

Warnes, S.A. v. Harvic Int’l, Ltd., No. 92 Civ. 5515(RWS), 1995 WL 261522 (S.D.N.Y.
May 4, 1995) (denying motion to vacate award, where party failed to show that
arbitrator’s refusal to hear rebuttal testimony resulted in fundamentally unfair trial).

Areca, Inc. v. Oppenheimer & Co., 960 F. Supp. 52 (S.D.N.Y. 1997) (denying motion to
vacate award for refusal to permit CFO’s testimony, because testimony would have been
either cumulative of other evidence or documentary evidence or simply irrelevant and
scope of inquiry afforded petitioners was sufficient to enable the arbitrators to make an
informed decision and to provide petitioners a fundamentally fair hearing).

Nationwide Mut. Ins. Co. v. First State Ins. Co., 213 F. Supp. 2d 10 (D. Mass. 2002)
(denying petition to vacate, finding that cedent had received a full and adequate hearing
on aggregation issue following two years of discovery, briefing and three days of
evidence, and panel’s denial of motion to reopen discovery was reasonable).

Commercial Risk Reinsurance Co. v. Sec. Ins. Co. of Hartford, 526 F. Supp. 2d 424
(S.D.N.Y. 2007) (denying motion for reconsideration of court’s order denying motion to
vacate award, where party argued panel improperly excluded testimony and related
documents of damages witness).

OneBeacon Am. Ins. Co. v. Swiss Reinsurance Am. Corp., No. 09-CV-11495-PBS, 2010
WL 5395069 (D. Mass. Dec. 23, 2010) (denying motion to vacate award where party had
“had plentiful opportunities to present evidence, and what limitations the Panel did place
on witness testimony were entirely within the bounds of its discretion”).

Century Indem. Co. v. AXA Belgium, No. 11 Civ. 7263(JMF), 2012 WL 4354816
(S.D.N.Y. Sept. 24, 2012) (denying motion to vacate award, finding that “[t]he fact that
respondent declined to call certain witnesses or present certain evidence within the time
allotted . . . did not constitute fundamental unfairness”).

Rubenstein v. Advanced Equities, Inc., No. 13 Civ. 1502(PGG), 2014 WL 1325738

(S.D.N.Y. Mar. 31, 2014) (denying motion to vacate award, where panel reasonably
concluded that additional evidence concerning common scheme argument was not

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pertinent and petitioners had not shown that they were unfairly prejudiced by panel’s
refusal to hear evidence).

Amerisure Mut. Ins. Co. v. Everest Reinsurance Co., 109 F. Supp. 3d 969 (E.D. Mich.
2015) (granting motion to confirm award, where reinsurer failed to show that any
evidentiary and procedural errors deprived it of a fair arbitration hearing, explaining that
“‘evidentiary decisions of arbitrators should be viewed within unusual deference’”).

Panel Award Vacated

Harvey Aluminum v. United Steelworkers of Am., AFL-CIO, 263 F. Supp. 488 (C.D. Cal.
1967) (granting petition to vacate award because arbitrator’s preclusion of pertinent and
material testimony as not proper rebuttal evidence reflected unfair hearing, in the absence
of any warning by the arbitrator as to the evidentiary rules to be followed).

Hoteles Condado Beach, La Concha and Convention Ctr. v. Union de Tronquistas Local
901, 763 F.2d 34 (1st Cir. 1985) (affirming district court’s vacatur of award, where
arbitrator accepted trial transcript into evidence but refused to give any weight to
unquestionably relevant evidence, effectively denying the party an opportunity to present
any evidence in the proceedings).

Westvaco Corp. v. Local 579, United Paperworkers, Int’l Union, No. 90-30091-F, 1992
WL 121372 (D. Mass. Mar. 5, 1992) (adopting magistrate judge’s recommendation to
vacate award where arbitrator seeking to decrease disputes between the parties decided to
accept contract interpretation of arbitrator in prior proceeding as long as it was not clearly
erroneous, but then excluded evidence offered by party as to whether that prior
interpretation was clearly erroneous).

Tempo Shain Corp. v. Bertek, Inc., 120 F.3d 16 (2d Cir. 1997) (vacating award, finding
that panel’s refusal to continue the hearings to allow testimony of former president,
temporarily unavailable due to wife’s illness, amounted to fundamental unfairness and
misconduct where there was no reasonable basis for the panel to determine that omitted
testimony would be cumulative).

ADDITIONAL ARIAS-U.S. RESOURCES

The ARIAS-U.S. Quarterly, available at https://www.arias-us.org/publications/quarterly-

archives, has published articles addressing evidentiary issues of interest to arbitrators and
arbitrating parties, including:

• Ronald S. Gass, Panel Limits on Depositions and Hearing Testimony Did Not Amount to
Arbitral Misconduct, ARIAS-U.S. Quarterly, First Quarter 2011, Vol. 18, No. 1, at 25-26.

• Patricia Taylor Fox and Wm. Gerald McElroy, Jr., Evidentiary Rules in Reinsurance
Arbitrations, ARIAS-U.S. Quarterly, Second Quarter 2009, Vol. 16, No. 2, at 2-7.

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• Robert M. Hall, Late Named Witnesses: What’s a Panel to Do?, ARIAS-U.S. Quarterly,
Second Quarter 2008,

• Vol. 15, No. 2, at 28-29.

• John M. Nonna, The Power of Arbitrators, ARIAS-U.S. Quarterly, Winter 1997, Vol. 3, No.
5, at 1, 3-5.

In the Matter of the Arbitration between WidgetKicks and ACME Insurance Company

WidgetKicks is an emerging online athletic shoe retailer founded by Chase Hollywood, a former
child actor and husband of heiress and acclaimed humanitarian, Alotta Fortune. WidgetKicks’
online-only platform is “the” destination for must-have, celebrity-designed footwear, ranging in
price from $1,000 to $5,000 per pair. Each year on New Year’s Day, WidgetKicks announces
three A-list celebrities who have created portfolios, or limited edition shoe designs, in exchange
for WidgetKicks’ donation of a share of the sales to their chosen charity. Through a massive
public relations campaign at year end, WidgetKicks builds consumer excitement in anticipation
of its New Year’s Day announcement, and WidgetKicks’ customers race to be the first to buy the
latest releases before a portfolio sells out. The footwear has both artistic and celebrity
memorabilia appeal among high-end collectors, and successful purchasers have been able to
resell the footwear for two or three times the original sales price. In 2015, 60% of WidgetKicks
$30 million annual revenue was generated in the first week of the calendar year.

Due to exploding sales growth, Patrick Pushover, WidgetKick’s Executive Vice President (and a
childhood friend of Fortune), asked broker, Justin Between, to review WidgetKicks’ insurance
program and obtain robust coverage for the 2016 renewal. On Between’s recommendation,
WidgetKicks purchased a specialty risk policy issued by ACME Insurance Company, including
first party computer security coverage, for the period from June 1, 2016 to June 30, 2017. The
declaration page listed a policy aggregate limit of $10 million and a sublimit for cyber extortion
loss of $1,000,000 each threat and in the aggregate.

The ACME policy included the following provisions under Insuring Agreements:

First Party Network Business Interruption

To indemnify WIDGETKICKS for the actual business interruption loss, in excess of the
applicable retention, WIDGETKICKS sustains during the period of restoration as a direct
result of an actual and necessary interruption of computer systems caused directly by a
failure of computer security to prevent a security breach, provided that such security
breach first take place on or after the policy effective date and before the end of the
policy period.

Cyber Extortion Threat

To indemnify WIDGETKICKS for loss incurred by WIDGETKICKS as a direct result of
a Cyber Extortion Threat first made against WIDGETKICKS during the policy period.
We will reimburse you for a Payment made under duress by or on behalf of
WIDGETKICKS with ACME’s prior written consent to prevent or terminate a Cyber

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Extortion Threat and resulting from a Cyber Extortion Threat that first occurs during the
policy period.

The ACME policy contained the following definitions:

“Business Interruption Loss” means the actual income loss and expense incurred during
restoration, and shall not include loss arising out of liability to a third party, legal
expenses, or loss resulting from unfavorable business conditions.

“Cyber Extortion Threat” means any threat or related series of threats to intentionally
attack a computer system for the purpose of coercing an Insured into a Payment. A
related series of threats, or a continuing threat, shall be considered a single Cyber
Extortion Threat and deemed to have occurred at the time of the first Cyber Extortion
Threat.

The ACME policy contained the following exclusion:

Any Loss arising out of:

(a) any intentional act or omission committed, approved, participated in, or

acquiesced in by:

(1) a current or former director, officer or principal (or the equivalent

positions) of WIDGETKICKS; or
(2) any current or former employee of WIDGETKICKS other than those
persons referenced in subparagraph (a)(1), if any person referenced in
subparagraph (a)(1) knew or had reason to know of the intentional act or
omission causing the Loss prior to that intentional act or omission.

WidgetKicks’ staff worked at a fever pitch throughout the 2016 holiday season in a buildup to
the 2017 Portfolio Reveal, scheduled to go live online at 12:17 a.m, Eastern, on January 1, 2017.
Then, at 10:00 p.m., Eastern, on December 31, 2016, WidgetKicks’ computer systems froze.
Access to internal files and customer access to the online store were both blocked. Hollywood
received a panicked call from Pushover, who told Hollywood he didn’t know what was wrong
with the network, but that he was trying to reach WidgetKick’s brilliant, if odd, Technology
Specialist, Ima Hacker.

With Pushover screaming into the phone (“We’re gonna lose millions! We’ve got to get back
online! The press is gonna have a field day! We’ll never recover! No celeb will touch us after
this, if we lose the reveal! AHHH!”), Hollywood received a text at 11:15 p.m., Eastern, from an
unknown number that read:

STRESSED ABOUT WORK, CHASE? GOOD THING YOU TALKED ALOTTA

INTO BUYING BITCOIN, BECAUSE I’VE DECIDED CHARITY STARTS AT
HOME – MY HOME. STAND BY. I’LL BE IN TOUCH.

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Distracted by Pushover’s screaming, and confused by the text, Hollywood told Pushover to try
again to reach Hacker, then hung up and paced the floor, waiting for an update. At 12:01 a.m.,
Eastern, Hollywood got a call from another unknown number. Hollywood later explained that he
answered and heard a computerized voice say:

WIDGETKICKS’ NETWORK IS MINE. YOU HAVE EXACTLY ONE HOUR TO

TRANSFER $1M IN BITCOIN TO 17VZNX1SN5NtKa8UQFxwQbFeFc3iqRYhem.
THIS IS YOUR ONLY CHANCE. PAY AND I’LL RELEASE YOUR SYSTEM. CALL
ANYONE AND WIDGETKICKS IS OVER. I WILL KNOW. DO NOT DOUBT ME.
THERE WILL BE NO FURTHER COMMUNICATIONS.

As soon as Hollywood hung up, Pushover called with an update, explaining that he had gotten
ahold of Hacker, and Hacker was heading up WidgetKicks’ efforts to get the system up and
running in time for the 2017 Portfolio Reveal. Pushover said Hacker thought it could be a cyber
ransom attack, but was telling Pushover not to pay any ransom demanded, because “once you
pay once, they won’t stop.” Hollywood told Pushover about the call demanding the bitcoin
transfer. Pushover told Hollywood: “Just do it! Pay it fast! We’ve only got moments until the
Reveal!” Reeling at the thought of the financial loss WidgetKicks was facing (and of explaining
this PR nightmare to his wife’s publicist), Hollywood raced to his laptop and transferred $1
million in bitcoin at 12:10 a.m., Eastern.

Hollywood waited. Finally, at noon on New Year’s Day, Pushover called to tell Hollywood that
the system was operational again. WidgetKick’s 2017 Portfolio Reveal went live moments later.
Exhausted, Pushover and Hacker headed home to sleep.

Meanwhile, Alotta Fortune’s publicist had finally located her at an “off-the-grid” glamping
resort and think tank. He alerted her that, last night, comedian Johnny Cimmel had interviewed
action film megastar Ashley Terrick (one of the 2016 celebrity designers to be “revealed”) on his
late night talk show. Terrick, who appeared intoxicated, launched into a profanity-laden rant
against baseball and apple pie, and boasted of hunting endangered wildlife with an infamous
foreign dictator. Alotta Fortune immediately and publicly distanced herself from WidgetKicks,
which she described in the press as “Chase’s little hobby,” noting that the couple had “different
interests” and she was focused on her charitable endeavors.

WidgetKicks’ January 2017 sales were 10% of its January 2016 sales.

Hacker never returned to work. The FBI considers Hacker a person of interest, but has yet to
locate him.

WidgetKicks gave timely notice of a claim to ACME and submitted a statement of loss. After its
claim investigation, ACME denied WidgetKicks’ claim. Business personnel at WidgetKicks and
ACME were unable to resolve the coverage dispute. Eager to avoid publicity that would follow
a court case, WidgetKicks and ACME agreed to arbitrate under the following terms:

Arbitration shall be conducted before a three-person Arbitration Panel appointed as

follows. Each party shall appoint one arbitrator, and the parties shall then appoint the

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Umpire pursuant to the ARIAS-U.S. Umpire Selection Procedure. The arbitrators and
umpires shall be ARIAS-U.S. certified, shall not be under the control of either party, and
shall have no financial interest in the outcome of the arbitration. The parties shall
execute an ARIAS-U.S. Form Confidentiality Agreement, and the Arbitration Panel shall
not be obligated to follow the strict rules of law or evidence. The decision of a majority
of the Arbitration Panel shall be final and binding, except to the extent otherwise
provided by the Federal Arbitration Act. The Arbitration Panel shall issue its award in
writing. Judgment upon the award may be entered in any court having jurisdiction,
pursuant to the Federal Arbitration Act.

The parties accepted the panel at the Organizational Meeting, and engaged in document and
deposition discovery over the next six months. The hearing is scheduled for November 2, 2017.

547912

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Thursday, November 2, 2017

2:00 p.m. – 2:50 p.m.
BREAKOUT SESSION
Workers' Compensation Disputes
in the Insurance and Reinsurance Sphere –
A Practical Guide
SESSION MATERIALS:
Key Issues in Workers’ Compensation Disputes. . . . . . . . . . . . . . . . . . . . . . 99

AVAILABLE IN ONLINE MATERIALS ONLY

Munich vs. American

Reinsurance Commutation

PRESENTED BY:
Mitch Harris, Day Pitney LLP
Kathleen Perlman, BerkleyRe
Jodi Ebersole, Travelers
Bryce Friedman, Simpson Thacher & Bartlett LLP

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KEY ISSUES IN WORKERS’ COMPENSATION DISPUTES

I. INTRODUCTION

Workers’ compensation insurance spawns disputes between policyholders and insurers;

and between insurers and reinsurers. While many arbitrators certified by ARIAS•U.S. have

handled reinsurance disputes relating to workers’ compensation, fewer certified arbitrators have

experience handling direct insurance arbitrations under workers’ compensation policies. This

program discusses the key issues that are commonly the source of disputes in the direct insurance

and reinsurance contexts.

II. WORKERS’ COMPENSATION INSURANCE

The vast majority of employers in all states (except Texas) are required by law to carry

heavily state-regulated workers’ compensation insurance. Workers’ compensation insurance is a

state-mandated, no-fault system under which an employer provides benefits to an employee for

injuries sustained on the job. Premiums vary by state and by each employee’s job classification.

In exchange for obtaining this insurance, employers generally are not subject to tort claims by

employees for workplace injuries. Workers’ compensation benefits are the employee’s exclusive

remedy for such injuries.

The standard Insurance Services Office Workers’ Compensation and Employers Liability

policy is well-understood. While the vast majority of insurance policies are guaranteed cost

policies (e.g., a policy where the insured’s costs are guaranteed to remain at a stated manual

rate), a larger, qualified employer may negotiate loss sensitive policies with its insurer where the

employer shares in the risk associated with the losses through a large deductible, retrospective

premium, self-insured retention or other like loss-sharing policy. In those instances, many

insurers use a separate agreement to document how the employer will guarantee payment of, and

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actually pay for, its loss sensitive obligations in a separate agreements referred to as a “program

agreement, “deductible agreement” or a “retrospective premium agreement” (collectively, a

“PA”).1 PAs are more common with large employers than with small ones, and unlike the

standard form workers’ compensation policy, PAs often contain arbitration clauses in their

dispute resolution clauses.2 The workers’ compensation insurance contract and the PA operate in

parallel, but the PA often is not an endorsement or attachment to the workers’ compensation

policy.

Premium rates for workers’ compensation insurance vary depending on the employer’s

business, loss history (or experience modification) and the job function of each employee.

Employees’ functions correspond to “job classification codes,” also called “class codes.” 3 States

that set workers’ compensation insurance premium rates, have a rate that corresponds to each

employee’s class code. Where the state does not set the rates, insurers have rates that correspond

to class codes. Premium rates are expressed in terms of dollars per $100 of payroll. An

experience modifier (which is a multiplier) based on the employer’s loss experience is applied to

the basic premium rate. The last element the calculation is the employer’s annual payroll, which

is estimated for the policy period. The standard policy language requires, the insurer to audit the

employer’s actual payroll after the expiration of the policy and adjust the premium based on the

actual payroll, number and class of employees and experience modifier. In guaranteed costs

1
Policyholders seeking to invalidate PAs call them “side agreements.”
2
Workers’ compensation policyholders are not limited to individual employers. Consortia of
employers or Professional Employee Organizations (“PEO”) also purchase workers’
compensation insurance. (A PEO is an independent business that assumes a separate company’s
employment obligations for a fee.)
3
Job classification codes are very specific. See https://classcodes.com/numerical-ncci-code-list/

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policies, an insured employer only pays estimated premiums and whatever premiums, if any,

become due after an audit. Under loss sensitive programs, the insured employer usually pays an

initial premium and thereafter will also pay retrospective premiums or its share of losses as

bargained for when the policy was purchased, calculated periodically after the policy incepts.4

Workers’ compensation policies have a “long tail” in that they cover losses that can continue to

develop over an extended period of years. Consequently, the adjustments for loss sensitive

policies often continue over the course of many years.

Common features of PAs include:5

- Premium financing – PAs often operate as vehicles to finance premium payments. This

is often done in two ways. First, a PA may provide for installment payments of basic premiums.

Second, retrospective premiums and other loss sensitive payments, discussed below, often are

included. Unlike other financing transactions, in which the lender may repossess the item that is

financed, the workers’ compensation insurance itself cannot return lost value to the insurer. This

is why PAs often include collateral provisions, which are discussed below.

- Collateral – Some PAs require that the policyholder post collateral to secure the

policyholder’s premium payment obligation. PAs often provide that the insurer has exclusive

and unilateral right to establish and adjust the amount of collateral the policyholder must post.

4
PAs may be used in connection with multi-line insurance programs as well. We focus here
only on PAs used in workers’ compensation insurance programs.
5
All of these features may be incorporated into a workers’ compensation insurance policy, as
long as the policy form containing these features is approved by the insurance regulator of the
state in which the policy is issued.
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- Initial premiums – PAs generally provide that the policyholder must pay an initial

premium when the policy incepts. This initial premium usually is the absolute minimum the

policyholder must pay.

- Retrospective premiums – PAs generally provide for additional retrospective premiums

to be paid based on a formula that principally focuses on incurred losses. Retrospective

premiums are usually calculated periodically after the policy incepts. For example, a PA may

provide that retrospective premiums will be calculated annually for three years following the

policy’s inception.

- Deductibles – Some PAs provide for high deductibles under which the policyholder

retains responsibility for a substantial amount of risk.

- Audits – Workers’ compensation policies provide that the insurer may audit the

policyholder’s books and records and interview the policyholder’s management, to determine the

actual exposure base, which is a function of number of employees the policyholder has and those

employees’ job classifications. PAs can set out more fulsome audit requirements (or a different

audit schedule) than would otherwise apply under the policy. Review of the financial condition

of the insured is also contemplated within PAs given the collateral requirements within many

PAs. Accurate and complete audits are particularly critical for policyholders that perform task-

based or seasonal work because the number of employees often fluctuates significantly.

Premiums may be adjusted based on these audits.

- Miscellaneous payments – A PA may specify the types taxes, assessments or surcharges

that the policyholder must pay in connection with a workers’ compensation policy.

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- Claim Handling Charges and Development Factors – A PA often outlines “development

factors” and claim handling charges to be applied based on the losses incurred or paid for the

policy term.

- Attorneys’ fees – A PA may provide that the policyholder must pay the fees an insurer

incurs in enforcing the policyholders’ obligations under the PA.

- Interest - The PA may also provide that the policyholder must pay interest on any

amounts the policyholder does not pay when they become due.

- Arbitration – Many PAs contain arbitration clauses.

- Cancellation – Some PAs provide that the insurance program may be cancelled if the

policyholder breaches the PA.

Common disputes under PAs include:

- Propriety of PAs – If loss experience – and, by extension, retrospective premium or other

loss-sensitive charges – are worse than expected, policyholders often seek to escape the liability

by claiming that the PA is unenforceable if it is not approved by the state’s insurance

regulator. For example, at least one court has held that California bars PAs to the extent that

they are not filed and approved by the California Department of Insurance. See Am. Zurich Ins.

Co. v. Country Villa Serv. Corp., 2015 U.S. Dist. LEXIS 89452, **695-**696 (C.D. Cal. 2015);

Cal. Code Regs., tit. 10, § 2268(b) (An insurer shall not use a policy form, endorsement form, or

ancillary agreement except those filed and approved by the Commissioner in accordance with

these regulations.”)

Although some policyholders have taken the same position in other jurisdictions, they

have generally not fared as well. For example, a bankruptcy court concluded that it would be

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unjust to allow a policyholder to escape its obligation to pay premiums under a PA after having

received the benefit of the insurance, including workers’ compensation coverage. In re Stone &

Webster, Inc., 547 B.R. 588, 603 (Bankr. D. Del. 2016); see also Reliance Ins. Co. v. Woodward-

Clyde Consultants, 243 F. App’x 674, 675 n.3 (3d Cir. 2007); In re Ionosphere Clubs, Inc., 85

F.3d 992, 998 (2d Cir. 1996).

Further, most courts have declined to deliver the policyholder a windfall by invalidating

PAs on the ground that they are not regulatorily-approved. See Stone & Webster, 547 B.R. at

603 – 604. Those courts rely on the longstanding rule that failing to file a form does not render a

contract unenforceable as between the parties. “The majority of jurisdictions addressing the

effect of an insurer’s failure to file an insurance policy form as required by a state statute have

concluded that the failure to file . . . does not render it invalid.” John Beaudette, Inc. v. Sentry

Ins., 94 F. Supp. 2d 77, 140 (D. Mass. 1999) (internal quotation omitted); id. at 140-41 (noting

that the insurance commissioner, and not a private party, has the right to enforce the filing

requirements, and therefore, the insurer’s “apparent failure to file” the forms at issue did not

render them “null and void” (emphasis in original)); see also FDIC v. Am. Cas. Co., 975 F.2d

677 (10th Cir. 1992); Highlands Ins. Co. v. Am. Marine Corp., 607 F.2d 1101 (5th Cir. 1979);

Cananwill, Inc. v. Emar Grp., Inc., 250 B.R. 533 (M.D.N.C. 1999).

- Arbitrability6 - Where a PA contains an arbitration clause, a challenge to the PA’s

propriety as a matter of a particular state’s insurance law must be arbitrated. Home Quality

Mgmt. v. Ace Am. Ins. Co., 381 F. Supp. 2d 1363, 1366-1367 (S.D. Fla. 2005) (question of

6
The State of Washington prohibits arbitration provisions in insurance contracts. RCW
48.18.200(1)(b). A Washington appellate court has held that PAs are “part and parcel” of a
workers’ compensation insurance policy and, therefore, may not require arbitration. Oak Harbor
Freight Lines, Inc. v. XL Ins. Am., Inc., 2017 Wash. App. LEXIS 1549 at *13 (Wash. Ct. App.
2017).

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whether PA is enforceable under Florida law must be arbitrated); accord, Matter of Argonaut

Insurance Company v Grove Lumber & Building Supply Inc., 2008 N.Y. Misc. LEXIS 9418, 5-6

(N.Y. Misc. 2008); and see, Buckeye Check Cashing, Inc. v. Cardegna, 546 U.S. 440, 445-46

(2006) (“[U]nless the challenge is to the arbitration clause itself, the issue of the contract's

validity is considered by the arbitrator in the first instance.”). While the validity of a PA is a

question for the arbitration panel, a policyholder’s challenge to the existence of an agreement to

arbitrate is for the court. Cont’l Cas. Co. v. Staffing Concepts, Inc., 2011 U.S. Dist. LEXIS

153827, at *36 (M.D. Fla. Dec. 20, 2011).

- Employee classification – As shown above, employee classification significantly drives

workers’ compensation premiums. Obviously, the classifications with lower risks of employee

injury yield lower premiums. Classification is a major area of dispute from several different

perspectives. See Premium Assignment Corp. v Utopia Home Care, Inc., 2010 N.Y. Misc.

LEXIS 3107, *7-*8 (N.Y. Misc. 2010). The employer may claim that the insurer mis-classified

its employees and, therefore, charged an inflated premium. The insurer may claim that the

employer mis-identified the job functions of its employees and, therefore, paid too little

premium. As most premium adjustments are primarily based on audits of the employer’s records

and interviews of the employer’s management, unscrupulous employers may misrepresent the

number of people they employed during the audit period and the functions those employees

performed, among other things. Employers also may attempt to classify employees as

“independent contractors,”7 who are not subject to workers’ compensation. As these audits are

7
Whether an individual qualifies as an independent contractor generally depends on the degree
to which the employer could control an individual’s performance of his or her work.
See Travelers Prop. Cas. Co. of Am. v. Universal Drywall, LLC, 85 Mass. App. Ct. 1125, 1125
(2014).

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retrospective, employers who had few or no losses during audit period often bristle at paying for

the coverage the insurer provided.

- Claim payment – Claim payment frequently is the subject of disputes in the workers’

compensation context because claims drive retrospective premiums and the employer’s

experience modification factor. Employers often argue that insurers paid claims that should not

have been paid or were overpaid, usually contending that the insurer failed to investigate the

claims properly or was otherwise negligent in evaluating the claims. See, e.g,. Northwinds

Abatement v. Employers Ins., 69 F.3d 1304, 1306 (5th Cir. 1995). These types of disputes are

fact-specific. Unlike reinsurance agreements, where insurer’s claims-handling decisions usually

receive deferential treatment under follow-the-fortunes clauses, little or no deference may apply

to the same decisions in a dispute between the insurer and a policyholder -- though the

policyholder alleging negligent claim-handling will likely bear the burden of proving that

assertion. See, e.g., Stone & Webster, 547 B.R. at 608.

- Collateral – Policyholders often contend that the insurer is holding more collateral than is

necessary to satisfy the policyholder’s obligations. These cases also are very fact specific. The

degree of deference accorded to the insurer’s assessment of its collateral needs will usually

depend on the language in the PA.

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III. WORKERS’ COMPENSATION REINSURANCE

Common Workers’ Compensation Reinsurance Disputes

- Familiar issues – Almost all of the issues one encounters in connection with property-

casualty reinsurance, including: notice; retention/aggregation; application of limits; number of

occurrences/accidents/events; follow the fortunes; and compliance with the duty of utmost good

faith, may arise in a workers’ compensation reinsurance dispute. There are, however, two

particular areas in which workers’ compensation reinsurance disputes commonly arise.

- Mandatory commutations – Some workers’ compensation reinsurance contracts contain

mandatory commutation clauses that require the cedent and reinsurer to commute existing claims

or all claims (i.e., projected to ultimate). (These clauses are most prevalent in high-layer

workers’ compensation contracts.) These provisions offer benefits to the cedent and the

reinsurer. The reinsurer limits or terminates its going-forward liability and hedges against

potentially catastrophic losses. The ceding company benefits by receiving cash up-front, which

it can manage an use consistently with its priorities.

Mandatory commutation clauses are simple in concept but often complex in application.

Fundamentally, the clauses generally require that the reinsurer pay the present value of existing

losses and, in cases of total commutations, IBNR. As with most things, the devil is in the details.

Better commutation clauses often specify in detail: the losses to be commuted; the discount rate;

the medical escalation rate; mortality factors; the formula governing the commutation

calculation; and other key inputs. Some clauses contain dispute resolution provisions under

which an actuary or panel of actuaries will determine the amount the reinsurer must pay.

Commutation clauses also may contain sunset provisions (discussed below).

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Notwithstanding detailed and specific commutation clauses, disputes over: the scope of

such clauses (some may arguably address commutation of known claims only); the manner in

which the commutation calculation must be performed (including the order of operations to be

applied); the collection and calculation of the data inputs for the commutation formula including

medical escalation rates ; .

- Sunset clauses – Sunset clauses, depending on their wording, may bar claims that are not

reported to the reinsurer by a specified date. The most notable decisions are sunset clauses are a

series from the United States District Court for the District of New Jersey, in which Munich

Reinsurance America, Inc. (“Munich”) was the cedent and American National Insurance

Company (“ANICO”) was the reinsurer.8

In Munich line of cases, Munich reinsured the workers compensation liabilities of Everest

National Insurance Company (“Everest”) from 1998 to 2001. Munich retroceded some of this

risk to ANICO under two agreements. Munich sued ANICO, claiming ANICO improperly

failed to pay certain cessions.9

The Munich/ANICO retrocessional agreements contained a sunset clause that provided:

Seven years after the expiry of this Agreement, the Company shall advise the Reinsurer
of all claims for said annual period, not finally settled which are likely to result in a claim
under this Agreement. No liability shall attach hereunder for any claim or claims not
reported to the Reinsurer within this seven year period.

Munich I at __. The agreements contained the following loss notice provisions:

A. The Company [ (Munich) ] agrees to advise the Reinsurer [ (ANICO) ] promptly of all

8
See Munich Reinsurance Am., Inc. v. Am. Nat’l Ins. Co., 893 F. Supp. 2d 686 (D.N.J. 2012)
(“Munich I”); Munich Reinsurance Am., Inc. v. Am. Nat’l Ins. Co.,936 F.Supp.2d 475 (D.N.J.
2013) (“Munich II”); and Munich Reinsurance Am., Inc. v. Am. Nat’l Ins. Co., 999 F. Supp. 2d
690 (D.N.J. 2014) (“Munich III”).
9
ANICO counterclaimed for rescission, arguing that Munich withheld material facts from
ANICO when the agreements were underwritten.
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claims coming under this Agreement on being advised by the Original Ceding Company,
and to furnish the Reinsurer with such particulars and estimates regarding same as are in
the possession of the Company. An omission on the part of the Company to advise the
Reinsurer of any loss shall not be held to prejudice the Company’s rights hereunder.

B. In addition, the following categories of claims shall be reported to the Reinsurer

immediately, regardless of any questions of liability of the Company or coverage under
this Agreement:

1. Any accident reserved at 50% of the reinsured attachment point;

2. Any accident involving a brain injury;
3. Any accident resulting in burns over 25% or more of the body; or
4. Any spinal cord injury.

Id. at 701.

Everest notified Munich of the workers’ compensation claims at issue beginning in 2003,

but Munich did provide notice to ANICO until 2008. When it did, Munich sent ANICO a

lengthy spreadsheet that “listed all of the claims submitted by Everest to Munich,” not only the

claims that fell under the Munich-ANICO agreements (the “Omnibus Notice”). Munich II at

493. The Omnibus Notice “included the name of each insured, the date of loss, and the

attachment point, however, the . . . [Omnibus Notice] did not delineate which of the claims were

likely to result in a claim under the retrocessional agreements.” Id. The Omnibus Notice also

“was overbroad, and included claims arising from years outside the” scope of the applicable

agreement.” Munich III at 173. In response, the intermediary claimed that the Omnibus Notice

“is not considered adequate notice of loss.” Munich II at 492. Munich agreed. Id. This

exchange did not, however, address whether the Omnibus Notice was sufficient for the reporting

the sunset clause required.10

10
Discussing the sunset clause’s purpose, the court said:

On its face, the sunset provision here is straightforward: it prevents Munich from
reporting claims in perpetuam, by excluding from coverage those claims not noticed
within seven years following the expiration of each retrocessional agreement. . . . The
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Munich III followed a trial on the merits. It contains the court’s ultimate conclusions

about whether the Omnibus Notice sufficed for sunset reporting purposes. Distinguishing sunset

reporting from everyday loss reporting, the court reasoned that sunset reporting must provide

information that allows the reinsurer “to determine which claims appeared likely to impact . . .

[its] coverage.” Id. at 173. In the court’s view, the Omnibus Notice did not contain sufficient

information to make such a determination. Id.

The Munich cases show (at least in that court’s view): (1) reporting losses and providing

loss information for sunset purposes are distinct; and (2) reporting for sunset purposes must

contain sufficient information to show whether that loss may reach the reinsurer’s coverage.

likely impetus behind . . . [the sunset clause] is to ensure that both parties have an
accurate understanding of ANICO’s exposure at the seven-year mark. Such an accurate
appreciation of ANICO’s economic liability would undoubtedly inform each party’s
position on commutation.

Id. at 495.

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Friday, November 3, 2017

8:30 a.m. – 9:20 a.m.
GENERAL SESSION
Captives in Reinsurance Disputes
SESSION MATERIALS:
Three Issues for Captives When Arbitrating Reinsurance Disputes. . . . . . 112

15th CICA Captive Market Study Results Highlights . . . . . . . . . . . . . . . . . . 114

PRESENTED BY:
Peter A. Halprin, Anderson Kill
Robert M. Horkovich, Anderson Kill
Larry Zelle, L. Zelle LLC
Sandra J. Sutton, MCIC Vermont LLC

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Fine Print

Three Issues for Captives When

Arbitrating Reinsurance Disputes
by Robert M. Horkovich and Peter A. Halprin

A
s companies increasingly look to captive insurance claims. According to commentators, the only proper inquiry
structures as an alternative to traditional insurance under the doctrine is whether the cedent’s determination
policies, they should be aware that a captive’s resolution was reasonable and in good faith. As set forth by the United
of its insurance disputes (which are disputes in the reinsurance States District Court for the Southern District of Ohio in
forum) will involve reinsurance issues that may be new to those International Surplus Lines Ins. Co. v. Certain Underwriters
with only direct insurance experience. & Underwriting Syndicates Lloyd’s of London, 868 F. Supp.
There are three issues that captive insurance companies 917, 921 (S.D.Ohio 1994):
should be prepared to address in their reinsurance disputes with “This standard is purposefully low. Were the court to conduct
their captive’s reinsurance companies: a de novo review of [the cedent’s] decision-making process, the
1. Follow the fortunes and collusion allegations. The foundation of the cedent-reinsurer relationship would be forever
convention that a reinsurer will generally “follow damaged. The goals of maximum coverage and settlement that
the fortunes” of the primary insurance company’s have been long established would give way to a proliferation of
underwriting decisions is intended to limit disputes. litigation. Cedents faced with de novo review of their claims
Sometimes, however, reinsurers will argue that a cap- determinations would ultimately litigate every coverage issue
tive’s settlement with a policyholder was collusive and before making any attempt at settlement. Such a consequence
need not be covered. this court will not abide.”
2. Selection of arbitrators. For a captive, the requirement Assuming a captive insurance company finds itself in a rein-
that arbitrators in reinsurance disputes be former surance dispute, the reinsurance company may seek to avoid
or current reinsurance company executives can be payment by arguing that there was collusion between the policy-
troubling as such individuals may be used to traditional holder and the captive insurance company. As noted above, one
reinsurance that may not involve captive structures and exception to “follow the fortunes” is bad faith, and this can take
may be biased as a result. the form of collusion. In Hartford Accident & Indem. Co. v.
3. Relief from judicial formalities. As reinsurance arbitra- Columbia Cas. Co., the court found that bad faith was a possi-
tion provisions often relieve the arbitrators of following bility where the reinsured failed to follow its customary practice
judicial formalities, captives may find their disputes are of retaining an environmental expert before settling an asbestos
subject to equities rather than law. claim. (98 F. Supp. 2d 251 (D.Conn. 2000)). In Mentor Ins. Co.
(U.K.) Ltd. v. Norges Brannkasse, however, the United States
FOLLOW THE FORTUNES AND COLLUSION ALLEGATIONS Court of Appeals for the Second Circuit rejected the notion
In general, the “follow the fortunes” doctrine requires a rein- that there should be greater scrutiny of settlements between
surer to follow its cedent’s underwriting fortunes. Thus, where captive insurance companies and their policyholders due to a
a “follow the fortunes” clause is present, a reinsurer generally greater likelihood of collusion. (996 F.2d 506, 515 (2d Cir. 1993)).
must respect a cedent’s decision to pay or contest underlying The court ruled that the captive’s settlement with its parent

Reprinted with permission from Risk Management.

Copyright © 2017 Risk and Insurance Management Society, Inc.
All Rights Reserved.
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Fine Print

company was not “tainted…by inbred corporate relationships” tors have wide discretion to order remedies they deem appropri-
as the reinsurers “were aware of those corporate relationships ate.” (See Banco de Seguros del Estado v. Mut. Marine Office,
from the outset” and failed to provide evidence that the settle- Inc., 344 F.3d 255, 261 (2d Cir. 2003).) Indeed, in the reinsurance
ment was tainted, fraudulent, collusive, or made in bad faith. industry, arbitrators often look to industry trade practices in
Given the high bar required to prove collusion, captive reaching their decision.
administrators can take some comfort. Scrupulously follow- Captive owners should regard the dispute resolution provi-
ing and documenting the captive’s established procedures sions in reinsurance contracts as negotiable, and be proactive
when handling claims should protect the captive from coverage about establishing procedures they are comfortable with in
defenses based on collusion. connection with the purchase of the reinsurance. Maintaining
a list of pre-vetted arbitrators, as suggested above, may render
ARBITRATOR SELECTION proceedings less of a risk.
While finding the right arbitrator for a dispute can present a
challenge in the best of circumstances, provisions in some insur- CONCLUSION
ance and reinsurance policies setting forth the required qualifi- Captives involved in reinsurance disputes should be aware of
cations for arbitrators can further tilt the playing field against the rarefied world that they are entering—and take proactive
a captive. In both the insurance and reinsurance context, for measures both to forestall disputes and to ensure that they
example, qualifications provisions may provide as follows: take place on a level playing field. The deferential standard
“The arbitrators shall be active or retired executive officers of of “follow the fortunes” can limit the grounds upon which a
insurance or reinsurance companies.” reinsurance company can challenge the claims decisions of a
Requiring all arbitrators to have served as executive officers captive insurance company. However, in a dispute, a captive
of an insurance or reinsurance company can be challenging for insurance company may need to fend off the argument that
captive insurance companies, as the arbitrators may be unfamil- a claim was resolved in a collusive matter—and should make
iar with captives or have some bias against them. sure that its claims-handling procedures will position them to
That said, given the abundance of captives, there should do so, keeping in mind that the notion that a captive-policy-
be directors or officers of captives who are willing to serve. holder relationship inherently is collusive has been rejected. In
Developing relationships within the industry and preparing a the advance of a dispute and in the event of a dispute, a captive
list of potential arbitrators in advance of any conflict can offset insurance company will also need to find arbitrators who will
any inherent advantage that might otherwise fall to the reinsur- give it a fair hearing—including, if necessary, in proceedings in
ance company. which judicial formalities may be relaxed, and where a decision
may be made in equity. n
RELIEF FROM JUDICIAL FORMALITIES
Some reinsurance policies contain a so-called “Honorable Robert M. Horkovich is managing partner and shareholder in the
Engagement” clause permitting equitable rather than legal con- New York office of Anderson Kill. He is a trial lawyer who has
siderations, with language such as the following: obtained more than $5 billion in settlements and judgments for
“The arbiters shall consider this agreement an honorable policyholders from insurance companies.
engagement rather than merely as a legal obligation and they are Peter A. Halprin is an attorney in Anderson Kill’s New York office.
relieved of all judicial formalities and may abstain from follow- His practice concentrates in commercial litigation and insurance
ing the strict rules of law.” recovery, exclusively on behalf of policyholders, and he also acts
It has been noted that such clauses “have [been] read gener- as counsel for U.S. and foreign companies in domestic and inter-
ously [by courts], [with courts] consistently finding that arbitra- national arbitrations.

Reprinted with permission from Risk Management.

Copyright © 2017 Risk and Insurance Management Society, Inc.
All Rights Reserved.
www.rmmagazine.com

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15th CICA Captive Market Study

Results Highlights
March 2016

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15th CICA Captive Market Study – Results Highlights

After a year’s hiatus for a strategic review, the Captive Insurance Companies Association (CICA) again
engaged Veris Consulting to conduct a newly focused, confidential survey of captive insurance
company owners from September 9, 2015 to November 2, 2015. The following presents highlights
of the results from 255 survey participants. CICA members can access the full, compiled results,
including open-ended responses and a breakout for single parent captives, on the members-only
section at www.cicaworld.com.

Survey Objectives
x To encourage the discovery, or reconsideration, of how a captive can add increasing value
x To better understand how CICA can support this continued value proposition

Key Findings
x While single parent captive owners still represent more than three quarters of the
participants, the respondents to this year’s survey represent a broader cross section of
industries and domiciles than in previous surveys. That said, the survey responses were
similar across captive types, industries and domiciles.
x Nearly 30% of the ‘Other’ industry sector is comprised of captive managers who own
captives in order to assist existing and prospective clients with their risk management
needs. They present a unique set of captive owner issues not previously captured by the
survey.
x Cyber risk, mentioned by slightly more than three-quarters of respondents, is the number one
emerging risk and the number one non-traditional risk that the survey participants are
currently grappling with, with the more specific cyber issues from emerging technologies
(drones, Internet of Things, etc.) mentioned by a quarter of respondents. In the ‘Other’
category, the issues arising from the sharing economy (Uber, Airbnb, etc.) are just beginning
to emerge as risk management concerns.
x Health insurance (employee medical stop loss) is the number two non-traditional risk in
captives, also mentioned by more than two-thirds of respondents. It is the number three
emerging risk in captives.

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Key Findings cont.

x Captive owners are planning to use captives more frequently for non-traditional insurance
solutions.
x About 50% of the survey participants are considering putting one or more new coverages in
their captive in the next 12-24 months, while the other 50% are either already insuring non-
traditional risk in their captive or are satisfied that the traditional coverage(s) in their captive
meet their current risk financing needs.
x According to the survey participants, the top five ways that their captive currently creates
value are (1) plugging holes in their insurance program (73.7%); (2) recapturing premiums
that would otherwise be spent in the commercial insurance market (67.4%); (3) providing
unique coverage solutions (59.4%); (4) accessing reinsurance market (54.9%); and (5)
funding retentions / centralizing buying (54.3%).
x To enhance their ability to maximize the value their captive can create 25.8% of the survey
respondents thought they would need a consistent, supportive regulatory environment,
25.1% reported that they would need an aligned partnership with their fronting carriers,
reinsurers and service providers, 23.2% felt they would need greater senior management
support, 18.7% said they would need a supportive tax code and 7.1% cited other things they
would need to enhance their ability to get the most value from their captive.
x By far the biggest challenge cited by the survey participants in doing more with their captive
was resources (30.1%); lack of management support (21.5%); ongoing use of capital
(12.0%); upfront costs of new programs (11.4%); and lack of knowledge about other, new
ways to use their captive (10.8%).

x When asked how they might overcome these challenges, the participants used many
different words. However, the message was clear that the keys to overcoming the challenges
were twofold: (1) effective communication by and among all stakeholders as respects the
value and benefit of a captive, especially in quantitative terms that senior management at
the parent company can relate to, and (2) enhanced partnerships/alignments among all
stakeholders regarding the vision, goals, objectives and expectations throughout the life
cycle of the captive.

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Participant Profile

Type of Captive(s) Owned

77.1%

15.7% 11.8% 11.1% 8.5% 3.9% 1.3% 0.7%

Single Parent Segregated RRG Group Other Association Agency Branch

Cell Captive Captive

Financial Institution
1.3% 0.6% Owner Industry Sector Other
1.3% 1.3% Manufacturing
0.6%
0.6% Healthcare
1.3%
1.9% Technology
3.2%
Education
3.2% 15.4% Retail/Wholesale
Construction
3.2% Food & Beverage
Transportation & Trucking
3.2% Agriculture
3.8% 15.4% Chemical
Hospitality & Gaming
3.8% Real Estate
3.8% Energy
Automotive
4.5% 11.5% Life Sciences
5.1% Marine
Media
6.4% 8.3%
Aviation & Aerospace
Forestry & Wood Products
Power & Utilities

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Vermont Captive Domicile

Bermuda
0.6%
Cayman Islands 0.6% 0.6%
0.6% 0.6%
Hawaii
Isle of Man 0.6%
0.6%
0.6%
Utah 0.6% 0.6%
0.6%
Texas 0.6% 0.6%
Arizona 1.3%

New York 1.3%

1.3%
Ireland 1.3%
Switzerland 1.3%
1.3%
Other 27.5%
1.9%
Kentucky
Montana
1.9%
District of Columbia
1.9%
Barbados
1.9%
Missouri
1.9%
British Virgin Islands
1.9%
St Kitts & Nevis
St Lucia 2.5%
South Carolina
2.5%
Delaware
Oklahoma 3.1%
15.0%
Puerto Rico
3.1%
Bahamas
3.1%
Anguilla
Colorado 3.8%
12.5%
Guernsey
Louisiana
Nevada
New Hampshire
Singapore
Sweden
Tennessee

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Result Highlights

Emerging Risk "Hot Topics"

76.3%

42.5%
39.1% 37.2%
28.5% 25.6%
17.9% 15.0% 15.0% 13.5%
9.2%

Non-Traditional Risks in Captives

48.0%
43.3%
17.3% 13.4% 11.8% 11.0%
19.7%
36.4% 12.6%
25.6% 25.6% 26.4% 26.4% 33.1% 15.0% 7.1%
22.3% 19.0% 14.9% 4.7%
8.3%
2.5%

Current Planned

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How Captives Currently Create Value

73.7%
67.4%
59.4%
54.9% 54.3%
44.0% 43.4%

28.6%

8.6%

What's Needed to Enhance Value

Aligned interest of
service providers, 7.7% Other,
7.1%

Stable regulatory
Aligned partnership environment, 25.8%
with
insurers/reinsurers,
17.4%
Sr Mgmt support,
23.2%
Supportive tax
code, 18.7%

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Biggest Challenge to Doing More with Captive

Lack of knowledge
about creative uses of Other,
captives, 10.8% 8.2%

Resources, 36.1%
Upfront costs of new
program(s), 11.4%

Management
Ongoing use of capital disinterest, 21.5%
to maintain program,
12.0%

Contacts
For more information about the CICA 15th Annual Captive Insurance Market Study, contact Dennis
Harwick, President, Captive Insurance Companies Association at dharwick@cicaworld.com.

About CICA
CICA is the only global domicile-neutral captive insurance association. CICA is committed to providing
the best source of unbiased information, knowledge, and leadership for captive insurance decision
makers. CICA is your advocate around the world, key to the captive industry and the resource for
captive best practices.

About Veris
Veris Consulting, Inc. was formed in 2000 and consists of technology-based survey and research services
(such as CICA’s market study), forensic accounting and litigation support, outsourced internal auditing
and accounting, and information technology consulting. It serves a diverse clientele throughout the United
States, as well as clients in Europe and the Caribbean. Services are provided from its headquarters in
Reston, Virginia. Further information is available at www.verisconsulting.com.

About Participant Support

CICA acknowledges the ongoing support and participation of CICA members in the annual market study,
as well as the captive domicile associations that encouraged their members to participate in the 2016
Market Study, including the Arizona Captive Insurance Association, the Bermuda Insurance Management
Association, the Captive Insurance Council (DC), the Insurance Managers Association of Cayman, the

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Kentucky Captive Association, the Montana Captive Insurance Association, the Texas Captive Insurance
Association, and the Vermont Captive Insurance Association. CICA also acknowledges those clients of
Aon and Marsh that participated via the link sent to them by their captive manager.
The survey results are only representative of this year’s participants and may, or may not, reflect all
constituencies within the captive insurance industry. Anyone that wishes to participate in future studies
should contact Dennis Harwick, President, Captive Insurance Companies Association at
dharwick@cicaworld.com.

2016 Annual CICA Market Study Committee

Joel Chansky, Committee Chair – Milliman, CICA Board Member
Ken Arguello, Dow Corning, CICA Board Member
Ryan Ralston, Ralston RMC, CICA Board Member
Tracy Buckholz, Marsh
Ellen Charnley, Marsh
Nancy Gray, Aon
Lisa Poulin, Milliman
Sean Rider, Willis Towers Watson
Michael Serricchio, Marsh

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Friday, November 3, 2017

9:20 a.m. – 10:10 a.m.
GENERAL SESSION
The ARIAS Ethics Code in Practice
SESSION MATERIALS:
ARIAS•U.S. Code of Conduct . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 124

AVAILABLE IN ONLINE MATERIALS ONLY

ARIAS•U.S. Umpire Questionnaire

Session PowerPoint Presentation

PRESENTED BY:
Mark Gurevitz, MG Re Arbitrator & Mediator Services
Peter Gentile, ARIAS•U.S. Certified Arbitrator
Jeanne Kohler, Carlton Field
Steve Schwartz, Chaffetz Lindsey LLP
Mark Megaw, ARIAS•U.S. Certified Arbitrator

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July 18, 2017

ARIAS•U.S. Code of Conduct
This version of the Code of Conduct was revised and became effective as of January 1, 2014, for
conduct taking place after that date. It is an integration, with significant updates and
amendments, of the original Guidelines and the Additional Ethics Guidelines adopted by ARIAS
in 2010. The date on the PDF version of the Code reflects subsequent amendments to the Code as
approved by the Board.

INTRODUCTION

ARIAS·U.S. is a not-for-profit corporation organized principally as an educational society dedicated to promoting the integrity of the
arbitration process in insurance and reinsurance disputes. Through seminars and publications, ARIAS·U.S. trains knowledgeable and
reputable professionals for service as panel members in industry arbitrations. The ARIAS·U.S. Board of Directors certifies as
arbitrators individual members who are qualified in accordance with criteria and procedures established by the Board.

The continued viability of arbitration to resolve industry disputes largely depends on the quality of the arbitrators, their understanding of
complex issues, their experience, their good judgment and their personal and professional integrity. In order to properly serve the parties
and the process, arbitrators must observe high standards of ethical conduct and must render decisions fairly. The provisions of the Code
of Conduct should be construed to advance these objectives.

PURPOSE

The purpose of the Code of Conduct is to provide guidance to arbitrators in the conduct of
insurance and reinsurance arbitrations in the United States, whether conducted by a single
arbitrator or a panel of arbitrators, whether or not certified by ARIAS•U.S. and regardless
of how appointed. Comments accompanying the Canons explain and illustrate the meaning
and purpose of each Canon. These Canons are, however, not intended to override the
agreement between the parties in respect to arbitration and do not displace applicable laws
or arbitration procedures. Though these Canons set forth considerations and behavioral
standards only for arbitrators, the parties and their counsel are expected to conform their
own behavior to the Canons and avoid placing arbitrators in positions where they are
unable to sit or are otherwise at risk of contravening the Canons. Parties and counsel
should provide prospective arbitrators and umpires with sufficient information concerning
the dispute and all of its potential participants so that they may fairly consider whether to
serve.

DEFINITIONS

1.Affiliate: an entity whose ultimate parent owns a majority of both the entity and the party to the
arbitration and whose insurance and/or reinsurance disputes, as applicable, are managed by the same
individuals that manage the party’s insurance and/or reinsurance disputes;

2.Arbitrator: a person responsible to adjudicate a dispute by way of arbitration, including the

umpire on a three (or more) person panel of arbitrators;

3.Party: the individual or entity that is named as the petitioner or respondent in an

arbitration, as well as the affiliates of the named party;

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4. Umpire: a person chosen by the party-appointed arbitrators, by an agreed-upon procedure, or

by an independent institution to serve in a neutral capacity as chair of the panel.

CANON I

INTEGRITY: Arbitrators should uphold the integrity of the arbitration process and conduct the
proceedings diligently.

COMMENTS:

1. The foundation for broad industry support of arbitration is confidence in the fairness and
competence of the arbitrators.

2. Arbitrators owe a duty to the parties, to the industry, and to themselves to be honest; to act in good
faith; to be fair, diligent, and objective in dealing with the parties and counsel and in rendering their
decisions, including procedural and interim decisions; and not to seek to advance their own interests
at the expense of the parties. Arbitrators should act without being influenced by outside pressure,
fear of criticism or self-interest.

3. The parties’ confidence in the arbitrator’s ability to render a just decision is influenced by many
factors, which arbitrators must consider prior to their service. There are certain circumstances where
a candidate for appointment as an arbitrator must refuse to serve:

a) where the candidate has a material financial interest in a party that could be
substantially affected by the outcome of the proceedings;

b) where the candidate does not believe that he or she can render a decision based on the
evidence and legal arguments presented to all members of the panel;

c) where the candidate currently serves as a lawyer for one of the parties (where the
candidate’s law firm, but not the candidate, serves as lawyer for one of the parties the
candidate may not serve as an arbitrator unless the candidate derives no income from the
firm’s representation of the party and there is an ethical wall established between the
candidate and the firm’s work for the party);

d) where the candidate is nominated for the role of umpire and is currently a
consultant or expert for one of the parties;

e) where the candidate is nominated for the role of umpire and the candidate was
contacted prior to nomination by a party, its counsel or the party’s appointed arbitrator
with respect to the matter for which the candidate is nominated as umpire; or

f) where the candidate sits as an umpire in one matter and the candidate is solicited to serve
as a party-appointed arbitrator or expert in a new matter involving a new matter by a party to
the matter where the candidate sits as an umpire.

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4. Consistent with the arbitrator’s obligation to render a just decision, before accepting an
appointment as an arbitrator the candidate should consider whether any of the following factors
would likely affect their judgment and, if so, should decline the appointment:

a) whether the candidate has a financial interest in a party;

b) whether the candidate currently serves in a non-neutral role on a panel involving a party
and is now being proposed for an umpire role in an arbitration involving that party;

c) whether the candidate has previously served as a consultant (which term includes service
on a mock or shadow panel) or expert for or against one of the parties;

d) whether the candidate has involvement in the contracts or claims at issue such that the
candidate could reasonably be called as a fact witness;

e) whether the candidate has previously served as a lawyer for either party;

f) whether the candidate has previously had any significant professional, familial or personal
relationships with any of the lawyers, fact witnesses or expert witnesses involved such that it
would prompt a reasonable person to doubt whether the candidate could render a just
decision;

g) whether a significant percentage of the candidate’s appointments as an arbitrator in the

past five years have come from a party involved in the proposed matter;

h) whether a significant percentage of the candidate’s appointments as an arbitrator in the

past five years have come from a law firm or third-party administrator or manager involved
in the proposed matter;

i) whether a significant percentage of the candidate’s total revenue earned as an

arbitrator, consultant or expert witness in the past five years has come from a party
involved in the proposed matter;

j) whether a significant percentage of the candidate’s total revenue earned as an arbitrator,

consultant or expert witness in the past five years has come from a law firm or third-party
administrator or manager involved in the proposed matter; and

5. Relationship between comments 3 and 4. Comment 3 sets forth circumstances in which an

arbitrator must refuse to serve. If none of those circumstances applies, comment 4 sets forth
circumstances an arbitrator should nevertheless consider in deciding whether to serve. In some
cases, comment 3 will “almost” apply – usually because the arbitrator has a relationship
described in comment 3 with an entity that is related to a party to the current arbitration, but that
is not strictly within the definition of “party.” Thus, one of the circumstances set forth in
comment 3 may apply
(i) to an entity that is an affiliate of a party to the current arbitration, but that is
not within the definition of “party,” or

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(ii) to an entity having the same third-party administrator or manager as a party to

the current arbitration.
In such a case, the arbitrator should refuse to serve, in line with the general
principle that in upholding the integrity of the arbitration process an arbitrator should not get
too close to the edge on issues of ethics or process fairness. If, however, it is clear that the
relationship between the entity with the “comment 3” relationship to the arbitrator and the
party to the current arbitration is attenuated, and that, by reason of the attenuation, the
reasons for the mandatory “do not serve” rules in comment 3 are not implicated, then the
arbitrator may (but need not) choose to serve.

6. The parties to a proceeding in which an individual is sitting as an umpire or is being proposed as

umpire may, by agreement reached without the involvement, knowledge, or participation of the
umpire or candidate, waive any of the provisions of paragraphs 3 (c), (d), (e), or (f) above and 5. The
umpire or candidate shall be informed of such agreement.

7. Consistent with the arbitrator’s obligation to render a just decision, an arbitrator should consider
whether accepting an appointment as a consultant or expert in a new matter by a party to the
arbitration where the person sits as an arbitrator would likely affect his or her judgment in the matter
where he or she sits as an arbitrator.

CANON II

FAIRNESS: Arbitrators shall conduct the dispute resolution process in a fair manner and shall
serve only in those matters in which they can render a just decision. If at any time the arbitrator is
unable to conduct the process fairly or render a just decision, the arbitrator should withdraw.

COMMENTS:

1. Before accepting an appointment, a person contacted to serve as an arbitrator should consider

whether the identity of the parties and their counsel, or factual issues anticipated to be implicated in
the matter (as well as related issues that might be relevant such as the identity of affiliates of the
parties, third-party managers, intermediaries, witnesses, etc.), would impact the arbitrator’s ability to
render a just decision in a fair manner.

2. Arbitrators should refrain from offering any assurances, or predictions, as to how they will decide
the dispute and should refrain from stating a definitive position on any particular issue. Although
party-appointed arbitrators may be initially predisposed toward the position of the party who
appointed them (unless prohibited by the contract), they should avoid reaching a judgment on any
issues, whether procedural or substantive, until after both parties have had a full and fair opportunity
to present their respective positions and the panel has fully deliberated on the issues. Arbitrators
should advise the appointing party, when accepting an appointment, that they will ultimately decide
issues presented in the arbitration objectively. Party-appointed arbitrators are obligated to act in good
faith and with integrity and fairness, should not allow their appointment to influence their decision on
any matter before them, and should make all decisions justly.

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3. Party-appointed arbitrators should not offer a commitment to dissent, or to work for a

compromise in the event of a disagreement with the majority’s proposed award. Party-appointed
arbitrators may advise the party appointing them whether they are willing to render a reasoned
decision if requested.
4. After accepting an appointment, arbitrators should avoid entering into any financial,
business, professional, family or social relationship, or acquiring any financial or personal
interest, that would likely affect their ability to render a just decision.

CANON III

COMPETENCE: Candidates for appointment as arbitrators should accurately represent their

qualifications to serve.

COMMENTS:

1. Candidates should provide up-to-date information regarding their relevant training, education and
experience to the appointing party (or parties if nominated or selected to serve as the umpire) to
ensure that their qualifications satisfy the reasonable expectations of the party or parties.

2. Individuals who serve on arbitration panels have a responsibility to be familiar with the practices
and procedures customarily used in arbitration that promote confidence in the fairness and efficiency
of the process as an accessible forum to resolve industry disputes.

CANON IV

DISCLOSURE: Candidates for appointment as arbitrators should disclose any interest or

relationship likely to affect their judgment. Any doubt should be resolved in favor of disclosure.

COMMENTS:

1. Before accepting an arbitration appointment, candidates for appointment as arbitrators should

make a diligent effort to identify and disclose any direct or indirect financial or personal interest in
the outcome of the proceeding or any existing or past financial, business, professional, family or
social relationship that others could reasonably believe would be likely to affect their judgment,
including any relationship with persons they are told will be arbitrators or potential witnesses. Such
disclosures should include, where appropriate and known by a candidate, information related to the
candidate’s current employer’s direct or indirect financial interest in the outcome of the proceedings
or the current employer’s existing or past financial or business relationship with the parties that
others could reasonably believe would be likely to affect the candidate’s judgment.

2. A candidate for appointment as arbitrator shall also disclose:

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a) relevant positions taken in published works or in expert testimony;

b) the extent of previous appointments as an arbitrator by either party, either party’s counsel
or either party’s third party administrator or manager; while it may be true in some
circumstances that only the party technically appoints the arbitrator, the purpose of this rule
is to require disclosure of the relationships between the candidate and the parties as well as
the candidate and either parties’ counsel or third party administrator or manager; such
relationships that must be disclosed include appointments as an arbitrator where the party’s
counsel and/or the party’s third party administrator or manager acted as counsel or third party
administrator or manager for a party making the appointment; and

c) any past or present involvement with the contracts or claims at issue.

3. No later than when arbitrators first meet or communicate with both parties, arbitrators should
disclose the information in paragraphs 1 and 2 above to the entire panel and all parties. When
confronted with a conflict between the duty to disclose and the obligation to preserve confidentiality,
an arbitrator should attempt to reconcile the two objectives by providing the substance of the
information requested without identifying details, if that can be done in a manner that does not breach
confidentiality and is not misleading. An arbitrator who decides that it is necessary and appropriate
to withhold certain information should notify the parties of the fact and the reason that information
has been withheld.

4. It is conceivable that the conflict between the duty to disclose and some other obligation, such as a
commitment to keep certain information confidential, may be irreconcilable. When an arbitrator is
unable to meet the ethical obligations of disclosure because of other conflicting obligations, the
arbitrator should withdraw from participating in the arbitration, or, alternatively, obtain the informed
consent of both parties before accepting the assignment.

5. After the Panel has been accepted by the parties, an arbitrator should recognize the consequences
to the parties and the process of a decision to withdraw and should not withdraw at his or her own
instigation absent good reason, such as serious personal or family health issues. In the event that an
arbitrator is requested by all parties to withdraw, the arbitrator must do so. In the event that an
arbitrator is requested to with-draw by less than all of the parties, the arbitrator should withdraw only
when one or more of the following circumstances exist.

a) when procedures agreed upon by the parties for resolving challenges to arbitrators have
been followed and require withdrawal;

b) if the arbitrator, after carefully considering the matter, - determines that the reason for the
challenge is substantial and would inhibit the arbitrator’s ability to act and decide the case
fairly; or

c) if required by the contract or law.

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6. The duty to disclose all interests and relationships is a continuing obligation throughout the
proceeding. If any previously undisclosed interests or relationships described in -paragraphs 1 and
2 above are recalled or arise during the course of the arbitration, they should be disclosed
immediately to all parties and the other arbitrators together with an explanation of why such
disclosure was not made earlier.

CANON V

COMMUNICATION WITH THE PARTIES: Arbitrators, in communicating with the parties,

should avoid impropriety or the appearance of impropriety.

COMMENTS:

1. If an agreement between the parties or applicable arbitration rules establish the manner or content
of communications among arbitrators and the parties, those procedures should be followed.

2. Party-appointed arbitrators may communicate with the party who is considering appointing them
about their fees and, excepting those who by contract are required to be “neutral” or the equivalent,
may also communicate about the merits of the case prior to acceptance of the appointment until the
date determined for the cessation of ex parte communications.

3. A party-appointed arbitrator should not review any documents that the party appointing him or her
is not willing to produce to the opposition. A party-appointed arbitrator should, once all members of
the Panel are selected, disclose to the other members of the Panel and the parties all documents that
they have examined relating to the proceeding. Party-appointed arbitrators may consult in
confidence with the party who appointed them concerning the acceptability of persons under
consideration for appointment as the umpire.

4. Except as provided above, party-appointed arbitrators may only communicate with a party
concerning the dispute provided all parties agree to such communications or the Panel approves such
communications, and then only to the extent and for the time period that is specifically agreed upon
or ordered.

5. When party-appointed arbitrators communicate in writing with a party concerning any matter as
to which communication is permitted, they are not required to send copies of any such written
communication to any other party or arbitrator.

6. Where communications are permitted, a party-appointed arbitrator may (a) make suggestions to
the party that appointed him or her with respect to the usefulness of expert evidence or issues he or
she feels are not being clearly presented; (b) make suggestions about what arguments or aspects of
argument in the case to emphasize or abandon; and

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(c) provide his or her impressions as to how an issue might be viewed by the Panel, but may
not disclose the content or substance of communications or deliberations among the Panel
members. An arbitrator should not edit briefs, interview or prepare witnesses, or preview
demonstrative evidence to be used at the hearing.

7. Whenever the umpire communicates in writing with one party on subjects relating to the conduct of
the arbitration or orders, the umpire should at the same time send a copy of the communication to
each other arbitrator and party. Whenever the umpire receives any written communication concerning
the case from one party on subjects relating to the conduct of the arbitration that has not already been
sent to every other party, the umpire should promptly forward the written communication to the other
arbitrators and party.

8. Except as provided above or unless otherwise provided in applicable arbitration rules or in an

agreement of the parties, the umpire should not discuss a case with a single arbitrator, party or
counsel in the absence of the other arbitrator, party or counsel, except in one of the following
circumstances:

a) Discussions may be had with a single arbitrator, party or counsel concerning ministerial
matters such as setting the time and place of hearings or making other arrangements for the
conduct of the proceedings. However, the umpire should promptly inform the other arbitrator,
party or counsel of the discussion and should not make any final determination concerning the
matter discussed before giving each arbitrator, party or counsel an opportunity to express its
views.

b) If all parties request or consent to it, such discussion may take place.

c) If a party fails to be present at a hearing after having been given due notice, the panel
may discuss the case with any party or its counsel who is present and the arbitration may
proceed.

CANON VI

CONFIDENTIALITY: Arbitrators should be faithful to the relationship of trust and

confidentiality inherent in their position.

COMMENTS:

1. Arbitrators are in a relationship of trust with the parties and should not, at any time, use
confidential information acquired during the arbitration proceeding to gain a personal advantage or
advantage for others, or to affect adversely the interest of another.

2. Unless otherwise agreed by the parties, or required or allowed by applicable rules or law,
arbitrators should keep confidential all matters relating to the arbitration proceedings and decision.

3. Arbitrators shall not inform anyone of an arbitration decision, whether interim or final, in advance
of the time it is given to all parties, or assist a party in post-arbitral proceedings,

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except as is required by law. An arbitrator shall not disclose contents of the deliberations of
the arbitrators or other communications among or between the arbitrators. Notwithstanding
the previous sentence, an arbitrator may put such deliberations or communications on the
record in the proceedings (whether as a dissent or in a communication to all parties and panel
members) to the extent (but only to the extent) reasonably necessary to expose serious
wrongdoing on the part of one or more panel members, including actions that are
contemplated by Section 10(a) of the Federal Arbitration Act.

4. Unless otherwise agreed by the parties or by applicable rules, arbitrators are not obligated to return
or retain notes taken during the arbitration. Notes, records and recollections of arbitrators are
confidential and shall not be disclosed to the parties, the public, or anyone else, unless (1) all parties
and the panel agree to such disclosure, or (2) a disclosure is required by law.

CANON VII

ADVANCING THE ARBITRAL PROCESS: Arbitrators shall exert every reasonable effort to
expedite the process and to promptly issue procedural communications, interim rulings, and written
awards.

COMMENTS:

1. When the agreement of the parties sets forth procedures to be followed in conducting the
arbitration or refers to rules to be followed, it is the obligation of the arbitrators to comply with such
procedures or rules unless the parties agree otherwise.
2. Individuals should only accept arbitration appointments if they are prepared to commit the time
necessary to conduct the arbitration process promptly.

3. Arbitrators should make all reasonable efforts to prevent delaying tactics, harassment of parties
or other participants, or other abuse or disruption of the arbitration process.

4. Arbitrators should be patient and courteous to the parties, to their lawyers and to the
witnesses, and should encourage (and, if necessary, order) similar conduct of all participants in
the proceedings.

5. Arbitrators may question fact witnesses or experts during the hearing for explanation and
clarification to help them understand and assess the testimony; however, arbitrators should refrain
from assuming an advocacy role and should avoid interrupting counsel’s examination unless
clarification is essential at the time.

CANON VIII

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JUST DECISIONS: Arbitrators should make decisions justly, exercise independent judgment and
not permit outside pressure to affect decisions.

COMMENTS:

1. When an arbitrator’s authority is derived from an agreement between the parties, arbitrators
should neither exceed that authority nor do less than is required to exercise that authority
completely.

2. Arbitrators should, after careful review, analysis and deliberation with the other members of the
panel, fairly and justly decide all issues submitted for determination. Arbitrators should decide no
other issues.

3. Arbitrators should not delegate the duty to decide to any other person. Arbitrators may,
however, use a clerk or assistant to perform legal research or to assist in reviewing the record.

4. In the event that all parties agree upon a settlement of issues in dispute and request arbitrators to
embody that agreement in an award, they may do so, but are not required to do so, unless satisfied
with the propriety of the terms of settlement. Whenever arbitrators embody a settlement by the
parties in an award, they should state in the award that it is based on an agreement of the parties.

CANON IX

ADVERTISING: Arbitrators shall be truthful in advertising their services and availability to

accept arbitration appointments.

COMMENTS:

1. It is inconsistent with the integrity of the arbitration process for persons to solicit a particular
appointment for themselves. However, a person may indicate a general willingness to serve as
an arbitrator.

2. Arbitrators shall make only accurate and truthful statements about their skills or
qualifications. A prospective arbitrator shall not promise results.

3. In an advertisement or other communication to the public, an individual who is an ARIAS U.S.

certified arbitrator or umpire may use the phrase “ARIAS U.S. Certified Arbitrator (or Umpire as
the case may be)” or “certified by ARIAS U.S. as an arbitrator (or umpire as the case may be)” or
similar phraseology.

CANON X

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FEES: Prospective arbitrators shall fully disclose and explain the basis of compensation, fees and
charges to the appointing party or to both parties if chosen to serve as the umpire.

COMMENTS:

1. Information about fees should be addressed when an appointment is being considered. The
better practice is to confirm the fee arrangement in writing at the time an arbitration appointment is
accepted.

2. Arbitrators shall not enter into a fee agreement that is contingent upon the outcome of the
arbitration process. Arbitrators shall not give or receive any commission, rebate or similar
remuneration for referring a person for alternative dispute resolution services.

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Friday, November 3, 2017

10:30 a.m. – 11:20 a.m.
GENERAL SESSION
The State of Play: An Insider's Perspective on
Insurance and Reinsurance Arbitrations in 2017
and Beyond
SESSION MATERIALS:
Altering the Structure of Reinsurance Arbitrations:
Are Old Habits Too Hard to Break?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 136

How Reinsurance Arbitrations Can Be Faster, Cheaper and Better. . . . . . 141

Let’s Break the Mold...or at Least Reshape It a Bit. . . . . . . . . . . . . . . . . . . 146

PRESENTED BY:
Marc L. Abrams, Mintz Levin Cohn Ferris, Glovsky and Popeo P.C.
Alysa B. Wakin, Odyssey Re
Scott Birrell, Travelers
Brad Rosen, Berkshire Hathaway Group
Jeffrey Burman, AIG
Josh Schwartz, Chubb

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How Reinsurance Arbitrations Can

Be Faster, Cheaper and Better
feature
By Robert M. Hall power) when the discovery is sought from
disbanded or disaffected third parties such
I. Introduction as agents. When a party is unable to con-
There is a good deal of criticism of reinsur- vince such a third party to cooperate, it may
ance arbitrations. Many observe that they be accused of playing hide the ball. Robert M.
are no longer disputes among gentlemen One of the hurdles with placing reasonable Hall
and gentlewomen. The process has become boundaries on discovery is acquiescence by
very expensive, elongated and contentious. panels in the views of counsel as to stan-
Some question whether litigation is now a dards for discovery. The Federal Rules of Civil
better alternative. Procedure allow discovery of documents
While many make negative observations which may lead to admissible evidence.
about the arbitration process, fewer assign Since there is no standard for admissible evi-
responsibility and even fewer attempt to dence in arbitrations, this rule is not very
devise remedies. Responsibility lies with the meaningful in the arbitration context.
players in the process. Attorneys are ethical-
ly required to be zealous in the representa-
Moreover, very broad discovery is less neces-
sary for arbitrations than litigation since: (a)
…perhaps
tion of their clients and to some this means
overturning every rock that has a remote
arbitration is supposed to be faster and less
costly than litigation; (b) arbitrators are
arbitration panels
possibility of covering relevant information
and making every possible legal argument,
expert in the business and require less detail
than a court to understand the transaction
should adopt a
no matter how unlikely. Their clients are
often engaged in very high stakes disputes,
at issue and what went wrong; and (c) arbi-
tration panels are familiar with the business
standard for
sometimes in a runoff context, where con- records of insurance and reinsurance entities
and can focus discovery on those locations
discovery more
tinuing business relationships are not an
issue. Therefore, clients may have little most likely to contain probative evidence. appropriate for
incentive to dissuade counsel from exercis- In this light, perhaps arbitration panels
ing their competitive instincts in full. Panels should adopt a standard for discovery more arbitrations: that
are sometimes reluctant to manage the appropriate for arbitrations: that which is
process aggressively for fear of taking it out likely to produce evidence probative to the which is likely to
of the hands of the parties who agreed to it issues in dispute. This would reduce high
and their counsel. volume, low result discovery and the time produce evidence
Regardless of which group bears more and cost related thereto and provide the
responsibility for problems in the arbitration panel with the information most useful to probative to the
resolve the dispute.
process, the primary issue is remedies. The
purpose of this paper is to explore possible
issues in dispute.
remedies for the very real problems in the
III. Panel Involvement in
arbitration process. Shaping Issues
In the typical arbitration, the parties define
II. Discovery Standards in the issues to be placed in front of the panel.
Arbitrations Often, the panel first becomes involved in
A major problem in arbitrations is discovery. shaping issues when discovery disputes
While most counsel are responsible in arise. However, such involvement usually
terms of discovery, arbitration panels some- deals with the connection between the dis-
times field requests for massive deposition covery desired and a line of inquiry thought
to be significant by counsel. The panel some-
and document discovery, some of which is
times makes little effort during the discovery
not well targeted or would produce infor-
phase to connect the line of inquiry with the
mation largely tangential to a resolution of Mr. Hall is an attorney, a former law
issues identified in the dispute.
the dispute on the merits. Not only is this firm partner, a former insurance and
burdensome, costly and time consuming, it This relatively passive role is not surprising. reinsurance executive and acts as an
insurance consultant as well as an
may be functionally impossible to execute Arbitration is the creature of the contract arbitrator and mediator of insurance
(due in part to limitations on subpoena between the parties. The authority of the and reinsurance disputes.

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P A G E 3 4

feature panel is limited to that granted in the arbi-

tration clause. In addition, the partisan
aspects of the party arbitrator process
makes it difficult to force counsel into an
early definition of the issues. However, a rel-
Some very active arbitrators are not available
for a hearing for over a year. This has led to
wry commentary within the arbitration com-
munity, sometimes from those who wish
they were equally in demand. One side of
atively passive role for the panel has signifi- the debate is the marketplace argument that
cant disadvantages in large, complicated arbitrators who are viewed as particularly
and hotly contested arbitrations. Counsel skilled and experienced should not be criti-
may have very different views of the case cized if the parties accept an attenuated
leading to a failure to meet squarely on the hearing to obtain the services of such indi-
issues. This can lead to inefficient efforts of viduals. The other side is that such arbitra-
counsel and, occasionally, a tragic failure to tors may be chosen because of their heavy
While it may grasp the panel’s priorities and inclinations. schedule rather than despite it, i.e., by a party
This, in turn, can lead to a lopsided result on in no hurry for a resolution of the dispute.
be hard for the a matter that could have been settled with Very active arbitrators should consider the
more panel intervention. latter argument in determining the point at
panel, and which they decline to accept new assign-
While it may be hard for the panel, and
ments.
painful to counsel, painful to counsel, the speed and efficiency
of the arbitration process may benefit from Slippage in the schedule prior to the hearing
the speed more panel involvement in shaping and pri- can have a disastrous result. If the hearing
oritizing the issues in the dispute. This can has to be rescheduled, this may add many
and efficiency start at the organizational meeting with months to the duration of the arbitration
counsel being required to reveal the sub- due to the necessity of juggling the sched-
of the stantive reasons for non-performance on ules of all the relevant parties. Therefore, it is
either side. It can continue with a discovery incumbent on the relevant players to achieve
arbitration process plan that is tied to specific issues plus a con- interim steps within the designed time peri-
ference call prior to filing the briefs to fur- ods. This can be done in several ways:
may benefit ther define the issues. Finally, there should
• Arbitrators need to identify issues of rela-
be a conference call after the briefs but
tionships with relevant parties early on so
from more panel before the hearing so as to prioritize testi-
as to resolve them without disrupting the
mony to the issues most important to the
proceeding at a later time;
involvement panel and most in controversy. This would
serve to better focus and shorten the hear- • Telephonic organizational meetings to
in shaping and ing. avoid the scheduling conundrum at the
front end;
prioritizing the IV. Saving Time and Money • Counsel have to identify with some particu-
Prior to the Hearing larity the reason for non-performance early
issues in There are a number of factors which influ- on so as to focus discovery, e.g., general
ence the scheduling of an arbitration hear- statements of misrepresentation, conceal-
the dispute. ing. Many players must be available: coun- ment and breach of contract are not useful;
sel, arbitrators, witnesses and company rep-
• Firm dates for the interim discovery and
resentatives. They must be available for a
briefing must be established at the organi-
block of time (one or more weeks for the
zational meeting with consequences for
hearing and a week before for preparation).
failure to meet them without good cause;
Discovery must be completed (eight or more
months) and briefs written and issued (one • Periodic status reports from counsel to
month). Therefore twelve months is often detect slippage in the schedule and identify
the minimum lead time necessary to sched- emerging problems;
ule a hearing.
• Meet and confer requirements for counsel
Sometimes counsel believe that more lead before bringing disputes to the panel in
time is necessary. This can result from their order to avoid piecemeal and confusing
schedules or their view of necessary discov- presentations of such disputes to the panel;
ery, i.e., audits can be cumbersome to
• Deciding interim issues on written submis-
arrange and time consuming. It can also
sions and/or argument by conference call
result from intervening motion practice, i.e.,
to reduce scheduling problems; and
security, dispositive motions and discovery
disputes. Some parties and their counsel are • Dealing with dispositive issues first (see
in no hurry to bring a dispute to resolution. Section V., infra.).

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One the best ways in which pre-hearing stop and a time-consuming hearing thereon
delays can be avoided is for parties to be is avoided. If no material misrepresentation
very involved in the discovery requested by is found, the dispute is in a better posture for
counsel in order to focus on important wit- settlement.
nesses and documents and to be efficient in
Another means by which hearing time can
the way that information is sought. I have
be saved is for the panel, after it has
received requests (I am not making this up) reviewed the briefs, to give counsel direction
for 90 depositions and copies of each and as to the issues and witnesses of most inter-
every one of tens of thousands of policy and est to the panel. Counsel are often grateful
claim files plus all documents related to pay- for this because it helps them prioritize their
ment and reporting of premiums and losses. efforts and decide which witnesses are need-
Parties who allow their counsel to make ed for live testimony. While consensus may
such punitive requests are not interested in be difficult to achieve absent an all-neutral
a quick and efficient resolution of the dis- panel (see Section VII., infra), it is a worth-
pute. Parties know how to focus requests to while tactic in an effort to achieve an effi-
get maximum result from modest amounts cient and focused hearing.
of information. For instance, if the issue is
the reason for entering and exiting a line of Whatever their familiarity with the arbitra-
business, focusing on the business plans for tion process, it is difficult for counsel to resist
the years in question will reveal more con- giving extensive opening statements. It is
cise and useful information than a vague their first opportunity to argue the merits of
request for all documents related to a com- the case live before the panel and their expe-
pany’s involvement in a line of business rience with litigation suggests that this is an
(every piece of paper and electronic file?). important opportunity to shape the issues in
their favor. However, by the time the hearing
If the cedent
V. Saving Time and Money at has arrived, the panel has spent many hours is found to have
the Hearing reviewing the issues and the counsels’ dis-
Hearings are very expensive. Teams of
parate view of them. What is more useful to
the panel at the outset is a list of the wit-
misrepresented
lawyers and arbitrators are billing by the
hour. Executives are taken away from other
nesses, their areas of testimony and a time
table for counsel’s case. This helps the panel
the business in
duties to testify. Hotels charge considerable
amounts to provide space, room, board and
understand how the case is to be presented
and to keep the hearing on track from a tim-
material fashion,
equipment for the event. To the extent that
a hearing cannot be completed within the
ing standpoint. discovery
time allowed, more expenses are incurred. For major witnesses at the hearing, consider-
Therefore, a reduction in hearing time is able time can be saved by the use of British- on administration
directly responsive to common criticisms of style direct testimony, i.e., written statements
reinsurance arbitrations. submitted to the panel prior to the hearing. can stop
Cross and re-direct is handled live. In this
In some disputes, there are threshold issues fashion, direct testimony is more organized and a
which might be decided on a summary and concise and does not take up hearing
basis in that they have no or few disputed time. The panel has already absorbed the time-consuming
facts. For instance, a common defense of testimony and opposing counsel are better
reinsurers is that the cedent misrepresented prepared for cross. hearing thereon
the program on placement so as to justify
rescission and administered the program so For minor witnesses, deposition designations,
rather than live testimony, can save consider-
is avoided.
poorly as to violate the duty of utmost good
faith. The placement defense involves limit- able hearing time. They can be prepared by
counsel and read offline by the panel. This
If no material
ed players and documents and if successful,
will obviate the rest of the hearing. The may require somewhat more complete depo-
sitions of minor witnesses by both sides as
misrepresentation
administration defense involves many play-
ers, many transactions and time-consuming would ordinarily be the case. However, it
saves hearing time where the aggregate
is found,
audits. Panels and counsel should consider
bifurcating such a dispute to focus on the
costs are much higher.
the dispute is in
placement issue first and to allow the Technology has added a new dimension to
administration issue to follow on at its natu- the arbitration process, however, technology a better posture
rally slower pace. If the cedent is found to can add costs without real benefit. Written
have misrepresented the business in materi- deposition designations precludes segments for settlement.
al fashion, discovery on administration can of videotaped depositions of minor witness-

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P A G E 3 6

feature es. However, demeanor evidence, which is

the primary benefit of videotaped deposi-
tions, is seldom a significant factor. The busi-
nessmen and businesswomen who are the
party and its counsel who may believe that
their arbitrator has failed in his or her parti-
san responsibility.
Obviously, the arbitration process has
subject of the depositions are used to pre-
changed in recent years. It is no longer a low
senting themselves well so the benefits of
cost, expeditious resolution of good faith dis-
viewing them as they give their testimony is
putes between trading partners. All too
often marginal. The panel can read the tes-
often, it has become a scorched-earth pro-
timony much faster than it can be given on
ceeding involving parties in runoff or with
videotape and they can read it offline, thus
discontinued operations and no interest in a
saving considerable hearing time.
future trading relationship.
Certain technology is very helpful to the
With a low probability of costs being award-
LiveNotes panel before, during and after the hearing.
ed, there is little disincentive to taking novel
Exhibits and attachments to the briefs on
if not outrageous positions. Sometimes arbi-
or similar disk allows the panel to be productive even
trators encounter highly skilled advocates
while traveling. LiveNotes or similar tech-
making earnest arguments in favor of the
technology nology provides the panel a live feed to tes-
most unlikely positions in support of totally
timony as it is given. This helps the panel to
unacceptable behavior by their clients.
provides the absorb it better and to annotate it so that
Fortunately, a growing number of panels are
the panel can more easily find it later and
willing to grant costs under such circum-
panel a live use it in their deliberations.
stances. This trend would accelerate with a
feed to VI. Awarding Costs in move to all-neutral panels which will elimi-
nate partisanship in arbitration proceedings.
Reinsurance Arbitrations It has become evident that granting costs in
testimony as it Absent a contractual provision to the con- appropriate circumstances is a tool that
trary, it is clear that an arbitration panel can
is given. award costs (e.g. attorneys’ fees and other
must be wielded to combat legitimate criti-
cisms concerning the length and costliness
costs of the arbitration) to the prevailing
This helps the party. Until recently, there has been consid-
of the arbitration process.

erable reluctance on the part of arbitration VII. All-Neutral Panels

panel to panels to do so. Reinsurance arbitrations in the United States
absorb it better This reluctance may have several sources.
One source may be the American rule in liti-
traditionally have used two arbitrators
appointed by the parties and a neutral
and to gation that each party must pay its owns
costs, absent extraordinary circumstances.
umpire. To most, the role of the party arbitra-
tor is to make sure his or her party’s position
annotate it The American rule is in contrast to the rule
in other jurisdictions (e.g., England) where
is articulated and fully considered by the
panel and then to seek a just result. To a
so that costs are granted routinely to the prevailing
party as a means of deterring marginal liti-
minority, the role of the party arbitrator is
simply to advocate the position of the party.
the panel can gation. Others have a view of their role somewhere
in between.
Traditionally, reinsurance arbitrations were
more easily largely good-faith disputes between busi- Regardless of where party arbitrators fall
ness partners which could be resolved rela- within this spectrum, their role is difficult
find it later tively quickly and cheaply with the aid of and ambiguous. Only with a struggle can a
some market practitioners. There were few party arbitrator put behind him or her the
and use it costs to award and the dispute was some- appointment process, discussions with coun-
thing the parties wished to put behind sel prior to the cut off of ex-parte communi-
in their them so they could continue trading. This is cations and the effort to assure balance to
no longer the case. the proceeding. The result often is a partisan
deliberations. Finally, the party arbitrator system creates a
element to the proceeding which can impact
virtually all phases: (1) umpire selection; (2)
certain degree of partisanship which may
timing of the hearing; (3) scope and nature of
deter a panel from awarding costs even
discovery; (4) length and focus of the hear-
when deserved. While a panel, or a majority
ing; (5) the nature of panel deliberations; and
thereof, may be willing to rule on all issues
(6) the nature and clarity of panel rulings.
for one party, they know that awarding costs
may subject the losing party arbitrator to The impact of this partisan element takes
the considerable disappointment of the several forms. Debate within the panel is

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3 7 P A G E
elongated to little purpose. right to appeal the decision of a US which to pursue to an adversarial con-
Negotiations tend to be distributive in arbitration panel although its ruling clusion.
nature, i.e., working toward the middle may be vacated on very limited grounds
To lose an arbitration and not know
from outer parameters determined by focused on conflict of interest and lack
why causes parties and their counsel to
the positions of the parties. of due process. One might conclude disrespect the arbitration process itself.
Unfortunately, this tends to reward the that US arbitrators might be more When the process is disrespected, par-
party which takes the most extreme inclined to issue “reasoned awards” as ties and their counsel either turn away
position and tends not to consider that final rulings on the merits but this is from it or engage in some of the nega-
the proper answer may be within not the case. Many have a sincere tive behavior cited in earlier sections.
entirely different parameters. Hearings belief that “reasoned awards” may pro- Either is detrimental to the arbitration
may be longer than necessary to assure long the dispute, by providing fodder process.
that each counsel can present their for a motion to vacate, rather than con-
arguments in full, regardless of clude it. IX Conclusion
whether the panel finds all of such
For purposes of this discussion, I will The reinsurance arbitration process is
arguments useful. The reasoning
define a “reasoned award” as 2 - 3 pages legitimately criticized as having become
behind the panel’s ruling on the merits
of findings of fact and conclusions of too long, costly and contentious. In
may be mushy and poorly articulated.
law. No more is necessary to tell par- part, this results from marketplace
Common denominator approaches to
ties and their counsel why they won or changes i.e. larger disputes between
findings and remedies are easier to cob-
lost. parties with no continuing business
ble together than creative ones.
relationship. However the relevant
All-neutral panels may increase the effi- Reasoned awards contribute to better players (arbitrators, parties and their
ciency and quality of the arbitration arbitrations for several reasons. First, counsel) must also accept a share of
process significantly by eliminating the composing a reasoned opinion requires the responsibility. Such players must be
partisan element. Without party identi- clarity of thought concerning what the willing to adopt techniques to promote
fication, arbitrators can focus on obtain- panel decided and why. Mushy reason- efficiency and clarity, such as those
ing the right answer rather than posi- ing and “split-the-difference” approach- described above, if arbitration is to
tioning themselves with respect to es to damages can seldom survive this remain a viable alternative to litigation.
other arbitrators. Panels can act more process. Panels often render awards ▼
decisively and efficiently with less which do not match the reasoning or
lawyering. They can give more effective damages claimed by either party and
direction to counsel as to witnesses there is absolutely nothing wrong with
and the focus of issues at the hearing this. It is important, however, for the
which can result in a better hearing in panel to have a logical reason for doing
less time and with less cost. Finally, so and be able to express it in writing.
they are better able to produce clear This will provide better rulings by arbi-
and decisive answers which proceed tration panels. Such players
from the evidence rather than an inter-
nal negotiation process.
The second reason why reasoned
awards produce better arbitrations is
must be willing
There are several methods of obtaining
all-neutral panels. ARIAS•U.S. currently
feedback to the parties and their coun-
sel. Arbitrated disputes are becoming
to adopt
is studying the feasibility of providing a
program for all-neutral panels. A cross
very large in size and considerable legal
and other expenses are associated. If
techniques to
section of interested parties have pro-
duced a set of arbitration procedures
the parties choose to have their dispute
resolved by experienced senior mem-
promote efficiency
which includes a different method for
selecting all-neutral panels. This may
bers of the insurance community, they
have a right to know the basis upon
and clarity,
be accessed at www.arbitrationtask-
force.org. In addition, there is discus-
which the panel decided. This is not
merely an matter of idle curiosity. An
such as those
sion among arbitrators of offering
themselves as fixed, three-member
adverse decision by a panel may cause
a party to re-examine its position on
described above,
panels. similar disputes with the same party if arbitration is to
(due to failure to agree on consolida-
VIII. Reasoned Awards tion) or with other parties. The decision remain a viable
British arbitrators regularly issue rulings may cause the party to re-examine its
of 20 or more pages, notwithstanding decision-making process when prob- alternative
the ability to appeal the arbitration tri- lems with clients and markets arise so
bunal’s decision on the law pursuant to as to make better evaluations as to to litigation.
the Arbitration Act of 1996. There is no which matters to compromise and

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P A G E 2

feature Let’s Break the Mold...or at Least

Reshape It a Bit

Peter Peter Scarpato panel/panelists' performance (to name a

Scarpato few).
Mediation garnered serious attention. In
Let's face it: companies, counsel, and even
general, introduction of mediation into the
some arbitrators want the system to change
process was broadly accepted. The issue was
in a big way. If you didn't think so before the
timing: should it be before discovery, after
November 2011 meeting, you should now be
discovery, just before the hearing? Though
a believer. Criticism of the process on the
mediation is often misjudged as solely a
street has grown exponentially. Just ask any
tactical weapon, breakout attendees
lawyer or company involved in the process
recognized its many benefits, including
and you'll get an earful: unpredictability,
evaluation of the strengths/weaknesses of
damaging non-disclosures, unfair
your case, your opponent's case, and even of
collaboration among certain panel
the parties' respective lawyers and witnesses.
members, outright monetary greed... and the
list goes on and on. And while ARIAS arbitrators may serve as
mediators, the groups felt that some would
Of late, even traditionally deferential courts need "re-engineering" and specialized
Recently, decisions have placed arbitrators and lawyers under training in mediation techniques. Many felt
the microscope. Recently, decisions criticizing the broker community should do more to
criticizing and and reversing previously sacrosanct awards, open the dialogue and ultimately introduce
and chastising and sanctioning lawyers and refurbished arbitration/mediation clauses
reversing previously arbitrators, have multiplied like vengeful into new treaties.
rabbits. Why is this happening? Was this
sacrosanct awards, conduct previously under the radar? Is it All fine ideas; all useful suggestions. But can
we do more? Should we do more to face the
new? To current naysayers of arbitration, the
and chastising and answers are irrelevant. The resulting cause "hue and cry"?
and effect, however, are patent: lawyers are What follows are suggestions - some
sanctioning lawyers recommending that clients omit arbitration aggressive and unique; some vaguely
clauses from new reinsurance agreements, familiar - designed to generate more
and arbitrators, and adversaries opt out of arbitration dialogue and suggestions for improving the
despite clauses in existing agreements, process.
have multiplied like preferring the more predictable, rule-friendly
and appealable (in a legal way) court system. Lest there be any misunderstanding, this is
vengeful rabbits. To its credit, ARIAS•U.S. seized the
not "arbitration bashing." I am and will
continue to be an ARIAS member, an avid
opportunity and market momentum to supporter of arbitration, and ready, willing,
fashion a very topical and necessary agenda and able panelist. Like my colleagues, I
for this past November's meeting. The wrap- believe in the process and the positive power
up of topics discussed during breakout of change.
sessions was illuminating, including many
suggestions for improving the process: more
on-the-papers decisions, more panel
questioning, development of best practices,
Umpire/Mediator
more active use of discovery limits, Pre-Dispute Selection
justification requirements for experts and Instead of trudging through the often
depositions, use of active company-umpires frustrating, quixotic attempt to agree on an
who never act as arbitrators, use of a non- umpire mid-dispute, the parties should
judicial body to select the umpire if the mutually agree upon an umpire and one
parties can't agree, earlier cutoff of ex parte alternate in advance, even when the treaty is
President, Conflict Resolved, LLC communications, and published feedback on executed, to expedite the panel appointment

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3 P A G E
process later. Similarly, to resolve issues boils over into full-blown, "in-the- time to brief and entertain the motion,
quickly and less expensively, the parties trenches" warfare. Third, the mediator's accelerating the schedule even more.
could also designate a standing and role is designed to maintain the
alternate mediator, available quickly to standing umpire's strict neutrality,
help the parties resolve smaller disputes shielding him/her from the candid, Make the Schedule
without the need for arbitration. sometimes damaging, disclosures
parties make in private caucuses. And,
Fit the Dispute
At what point are the parties most Panels must affirmatively and
last but certainly not least, the mediator
agreeable? Most of the time, it's when proportionately streamline the length
can prevent the unnecessary time and
they successfully negotiate the terms and scope of the proceedings to the
expense of arbitrations that should
and execute the signature page of an amounts in dispute.
never have been filed.
agreement. Why not seize the moment
and have the parties discuss and agree Starting with communications with
upon a person whom they trust to act counsel before the OM, the panel
as a fair and impartial umpire (plus at Pre-Organizational Meeting should affirmatively announce that the
least one alternate of similar Disclosures, Panel Approval, parties, armed with as comprehensive
an evaluation of their case as possible,
reputation)? and Hold Harmless. must develop a schedule that fits the
This serves several purposes: first, it Panelists should make their disclosures, amount in dispute. Does a $250,000
eliminates the typical, multi-month and parties should accept and hold the case require eight depositions? Must
wrangling and gnashing of teeth to panel harmless, immediately after the the hearing in this case be two years
arrive at what many feel is the lopsided umpire is selected and before the away? Like the rule about running water
selection of one party's candidate for organizational meeting. following the course and filling the
umpire. Once the parties select their space available, the more time it takes
The weeks and months between umpire
arbitrators, the panel can immediately to get to hearings, the more that can be
selection and organizational meeting are
proceed with a qualified, acceptable plugged into the schedule, resulting in
the ''no man's land" of the arbitration
umpire. Second, it avoids potential "jury less focused, more costly, discovery.
process. Little if anything is
rigging" of the umpire selection process.
accomplished, other than the parties' The parties and their lawyers are smart,
And finally, the selected umpire and
submissions of position statements, and analytical problem solvers — if the
alternate must disclose any
discussion and occasional approval of a panel says "absent (really) good cause
subsequently accepted, potential
case schedule. The as yet unapproved shown, you're doing this in twelve
conflicts to the contracting parties,
and unprotected panel logically leaves months with three deps," they will
keeping them up to date on their
the drab and difficult issues for the figure out how to do it. If discovery
candidates' qualifications to serve in any
organizational meeting, typically reveals evidence that breaks the small
future dispute.
conducted in person regardless of the case open, the panel can address any
If, after disclosure of additional amount in dispute, often at significant necessary schedule adjustments at the
appointments, a standing umpire time and expense for parties, counsel, time. And a reduction in depositions
crosses the parties' comfort line, they and arbitrators. (which are not, by the way, as of right)
may move the alternate up and choose can still be accommodated: for example,
With the help of a standing, qualified
another alternate. Even if the parties the direct testimony of less important
panel, the parties can agree upon and
must obtain a replacement standing witnesses can be submitted in written
eliminate much of the organizational
umpire, the very act of recognizing the form, subject to cross-examination at
meeting agenda in advance, making
conflict and agreeing upon a the hearing, eliminating any "trial by
telephonic meetings (or even no
replacement, keeps the parties in ambush" arguments and allowing
meeting) the rule, not the exception. The
discussion mode, not aggression mode. opposing counsel to "pick their spots"
fully functioning, indemnified panel can and decide whether and to what extent
In fact, the parties may trust their
be available by phone to conduct status they wish to cross the witness at all.
nominee enough to have him or her
conferences and even entertain on the
serve solo in any subsequent dispute, From the beginning, ask the parties to
spot oral arguments to resolve logjams
especially if the amount at issue is ultimately prepare and agree upon
in the parties' search for a mutually
small. stipulations of fact. This avoids the
acceptable schedule. And if early motion
The parties could also designate a practice is necessary (e.g., motion for mindless repetition of duplicate
standing (and alternate) mediator. This pre-hearing security), a fully functioning information in future filings and makes
serves many important goals: first, once panel can help the parties set a pre-OM the parties focus and agree on certain
again, the mediator is easily selected at briefing schedule. If an in-person items in the record, further streamlining
the beginning of the business organizational meeting is unnecessary, future discovery and arguments to a
relationship when all is sweet. Second, the panel can rule on the papers; if more limited set of factual issues. If the
he or she is quickly available by email or needed, they are ready to hear oral parties can agree to the authenticity of
phone to help the parties address any argument and rule on the spot or soon
issue, large or small, before it festers and thereafter, saving the usual post-OM CONTINUED ON PAGE 4

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P A G E 4
CONTINUED FROM PAGE 3 • free up the panel and counsel to handle
The parties and their other, non-discovery matters, especially if
documents one of them produced, counsel can delegate non-dispositive
lawyers are smart, depositions solely to authenticate such discovery work to other lawyers in their
documents become unnecessary. firms;
analytical problem
• come down harder than the panel on "last-
solvers — if the Separate Discovery Master
word-email syndrome" abusers, giving
them a second chance to mend their ways
panel says "absent Arbitrator without aggravating the panel;
Either the panel or the parties can appoint • report to the panel, as necessary, on the
(really) good cause one Discovery Master Arbitrator to decide all progress and resolution of discovery issues
non-dispositive, discovery motions. and coordination of the remaining
shown, you're doing • A perennial harangue is that discovery in discovery schedule.
this in twelve arbitration is out of control. How many
times in how many conferences have we
months with three discussed this topic? Simultaneous Depositions and
• But wherever your case falls on the "out-of- Questioning of Experts
deps," they will fig- control" meter, simple non-dispositive Truncate and expedite the deposition
discovery motions often cause complex schedule by simultaneously deposing
ure out how to do it. problems: competing experts.
• Even though submissions must follow In addition to the occasional questionable
approved motion protocols, some counsel need for them, expert witnesses seriously
fall prey to the addictive "last word" email complicate and extend the discovery
syndrome, continuing to sur-surreply to the schedule, which must accommodate the
last surreply to the original reply — despite identification of affirmative experts, filing of
the fact that such exchanges require panel their initial reports, depositions, identification
From the beginning, approval; of rebuttal experts, filing of their rebuttal
reports, depositions, and testimony. Counsel
ask the parties to • If oral argument is required and the
potential evidence is critical and time
must prepare for, take, and defend separate
depositions for each of them — if you have
ultimately prepare sensitive, you now must undo the Gordian
knot of coordinating the schedules of three
more than one affirmative/rebuttal expert in
the case, good luck! At the hearing, the
and agree upon panelists, two lawyers, and possibly two (or
more) client representatives;
availability of experts often complicates the
hearing schedule. Who goes on when, who
stipulations of fact. • A complex motion (e.g., over e-discovery) has to wait until tomorrow, who has been
can redirect the panel and parties' hanging around all day in the hall, etc. Also,
This avoids the attention for weeks away from other items given the length of an expert's direct and
on the often tight discovery calendar; cross-examination and the occasional need
mindless repetition • Deliberations on motions involving
to take them out of order, the panel may
hear petitioner's expert on Monday and
of duplicate infor- arguably privileged and confidential,
sometimes prejudicial, documents could
respondent's on Thursday, making it harder
to compare the substance and credibility of
mation in future fil- poison the umpire and/or arbitrators' view
of the case, even if the documents are
their respective testimony.

ings and makes the ultimately excluded. One answer: allow the two opposing experts
to testify at the same time, whether in
An independent Discovery Master Arbiter
parties focus and can:
depositions or at the hearing. With counsels'
input, the panel can develop a protocol for
agree on certain • reduce the schedule coordination problem
by two arbitrators. In fact, if the parties
this procedure in advance. The process is
simple: place opposing experts on the stand
items in the record, agree, the one Discovery Master Arbiter can
be freely and informally available for on the
simultaneously, ask them the same
questions and have them respond to each
further streamlining spot conference calls to resolve minor
discovery-related issues;
other's answers (subject to either a
determined limit or the umpire's discretion),
future discovery… • shield the entire panel from the potential
followed up by panel questions similarly
handled.
prejudice of reviewing disputed privileged
documents; If this is properly controlled, you now have a

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5 P A G E
reasoned debate (monitored by the parties — knowing or not knowing • draft the mediation process into the
panel if done at the hearing stage) and before hearings that the three people to arbitration clause for new contracts or
a record of the experts' competing whom you will hand over your case amend the clause to include it in
arguments in one section of the recommend mediation? Isn't the existing contracts;
transcript. One major benefit is that the answer obvious?
panel can explore critical issues without
Protections can be built into the process
waiting days between opposing to avoid unfairness. For example: Conclusion
expert's testimonies. The consolidated
ARIAS's November 2011 meetings have
record reduces the time and cost of • parties can agree in advance to allow
set an excellent tone for improvements
finding and comparing the experts' discussion of the "M" word only if all
in the arbitration process. Collectively,
opinions. Simultaneous direct and cross panelists agree. A unanimous
arbitrators, counsel, and parties have the
of the experts avoids any actual or recommendation is a pretty strong,
opportunity to work together to address
perceived unfairness to the party very valuable hint to the parties (not
the rising tide of complaints — some
whose expert testifies first. Since the necessarily both of them) that a
unique, some long-standing — with all
parties had the benefit of analyzing mediated settlement offers better
phases of the process. The trick is not to
and reacting to their opponents' options for proper relief than an
hold on to the past for the past's sake,
experts' reports in advance, they don't arbitrated award;
but to keep what works and fix what's
need it again at the hearing. And finally, • following the panel's broken for the future.
though experienced counsel generally recommendation, the case can be
conduct effective cross-examinations, This article hopes to open a dialogue
referred to a third party mediator
this procedure affords the parties' with suggested changes to certain
selected either by the parties or the
experts — the true specialists — the elements of the process — but there are
panel in advance. This allows the
opportunity to ask the questions most more ideas and better suggestions out
parties to be more candid to the
important to them and the opinion there. Advance selection of umpires,
mediator and shields the panel from
they seek to defend. mediators, and the panel, making the
confidential disclosures made at the
case schedule fit the amount in dispute,
mediation, especially if it proves
using independent discovery arbiters,
unsuccessful and the disputants
conducting simultaneous expert
Permit the Panel to return.
testimony, and using mediation where
Suggest Mediation • in advance of the organizational appropriate — all of these have the
Since panels are dispute resolution meeting, parties and the panel can capacity to make arbitration more
experts with a seasoned sense for the insert dates into the schedule to efficient; it still is, and always will be,
good and bad case, allow either the discuss mediation, avoiding inferences arbitration.▼
umpire or the entire panel to suggest or fears of panel prejudgment when
mediation to the parties at any point in the topic is raised later in the case;
the case.
First and foremost, panelists are dispute
resolution experts. In some cases, they
have collectively participated in
hundreds of arbitrations, seen the rise
and fall of parties' cases, and judged the
probative/putative value of evidence
and solid/sinking credibility of dozens
of witnesses. They have a "gut" sense
for where a case may be heading. In DID YOU KNOW…?
fact, more and more arbiters are also …THAT SENDING A CHANGE OF ADDRESS TO ARIAS•U.S. FOR THE MEMBER
trained, experienced mediators who DATABASE AND QUARTERLY DOES NOT CHANGE AN ARBITRATOR’S PROFILE?
can see the right vs. wrong case for THE YELLOW BUTTON ON THE HOME PAGE LABELED “LOG IN TO
mediation a mile away, regardless of ARBITRATOR PROFILE DATA ENTRY SYSTEM” ALLOWS ARBITRATORS TO MAKE
any prediction of an ultimate winner or CHANGES TO ALL DATA IN THE PROFILE, INCLUDING CONTACT INFORMA-
loser at trial. TION. THE ARIAS WEBSITE IS AT WWW.ARIAS-US.ORG.

Why isn't it in the parties' best interests

to allow the very panel that may decide
their fate to open the discussion and
even recommend mediation? Judges do
it all the time. True, the settlement
judge is usually not the trial judge, but
not always. And what is better for the

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Friday, November 3, 2017

11:20 a.m. – 12:10 p.m.
GENERAL SESSION
The Bermuda Form: Can ARIAS Disrupt the
Traditional Model?
SESSION MATERIALS:
The Bermuda Form - Interpretation and Dispute Resolution of
Excess Liability Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 151

Bermuda Form Arbitration: A Policyholder Perspective . . . . . . . . . . . . . . . 158

The Bermuda Form Arbitration Process: A Glimpse Through

The Insurers’ Spectacles. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 161

PRESENTED BY:
John L. Jacobus, Steptoe & Johnson, LLP
Jonathan Goodman, General Electric
Leonard Romeo, Arch Bermuda
Mike Merlo, Aon (Bermuda) Ltd
Robin Saul, XL Bermuda Ltd/Insurance
Greg Hoffnagle, Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.

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Perkins Coie LLP BERMUDA FORM ARBITRATION

Bermuda Form arbitration: a policy-

holder perspective
Leon B Kellner and Vivek Chopra
Perkins Coie LLP

Introduction The abrogation of contra preferentem

With the globalisation of the world economy, private arbitration is The substantive law of almost every jurisdiction in the United States,
fast becoming the favoured forum to resolve international business including New York, provides that if a policy term is ambiguous
disputes, with London being a primary venue. While most decisions and subject to two reasonable interpretations, the one favouring
to arbitrate as well as the terms of the arbitration are negotiated the policyholder will be used. The Bermuda Form expressly abro-
by the parties, there is one contract that requires a party to arbi- gates New York’s contra proferentem rule – a major advantage for
trate and sets forth the terms without negotiation – that contract is the insurers who drafted the contract. Many ‘policyholder friendly’
a Bermuda Form excess insurance policy. court decisions in New York rely at least in part upon this doctrine;
In today’s insurance market, most multinational and US Fortune its abrogation provides a means for Bermuda insurers to distinguish
500 companies purchase high-level excess insurance in the Bermuda these cases.
market, primarily because the market has substantial capacity. The
purpose of this article is to comment briefly on several aspects of Payment of punitive damages
this arbitration process that by design favours the insurer, and how The threat of punitive damages is a useful lever to prevent an insurer
a policyholder can secure a more level playing field. from refusing to pay a claim even though there is no credible basis
There are a number of Bermuda forms covering different risks.1 to deny it. The Bermuda Form expressly prohibits the award of any
They all, however, have one feature in common – the dispute resolu- punitive damages. The result is that a Bermuda insurer has little or
tion provision.2 Briefly, that provision provides for an arbitration no incentive to resolve a large claim quickly – the longer the insurer
seated in London and procedurally governed by the (British) 1996 holds the money, the more it will earn, ultimately reducing the insur-
Arbitration Act. er’s net payout.
It is widely acknowledged that the Bermuda Form and its arbi-
tration provision resulted from the insurance industry’s dissatis- Confidentiality
faction with insurance coverage decisions in United States courts3 In the insurance context, confidentiality acts as a sword rather than
and, more broadly, with an American judicial system that insurers a shield. The purpose of confidentiality in most business arbitrations
believe favours policyholders. The Bermuda Form arbitration pro- is to protect sensitive business data from being publicly disclosed. In
vision somewhat alleviates the insurers’ perceived mistreatment at the insurance context, confidentiality (in tandem with the unavail-
the hands of the American judicial system by featuring several pro- ability of punitive damages) permits insurers to advance specious
insurer procedural mechanisms. defenses with no accountability. Arbitral decisions are not reported,
so there is no way for an insured to investigate an insurer’s position
London venue or to root out whether the same insurer has taken a contrary posi-
Seating the arbitrations in London presents several advantages to tion in a prior proceeding.
insurers. First, for most American companies it will greatly increase Confidentiality also allows insurers to work together while leav-
costs and complexity to bring company and third-party witnesses to ing the policyholder to fend for itself. Most insurance is purchased in
London. Second, many of the evidence-gathering tools available in layers, with no one insurer providing the totality of the limits. When
US court proceedings (eg, third-party document subpoenas, deposi- a coverage dispute occurs, separate arbitrations must be brought
tions de bene esse) are not available to litigants. Since the presenta- against each insurer.4 In a situation where, for example, a policy-
tion of factual evidence is almost the sole burden of policyholders in holder commences simultaneous arbitrations against two insurers,
coverage disputes, the absence of these tools adds further difficulties the insurers – even though they are in separate arbitrations – are
to the prosecution of the claim. permitted to work together under the guise of a joint defence agree-
ment, while the policyholder cannot seek assistance from other, simi-
English procedural rules larly situated, policyholders because such a request would violate
Particularly distressing and burdensome to the insurers is the the confidentiality of the arbitration.
American discovery process, especially when insurer underwriters Another way in which confidentiality tilts the playing field
are asked probing questions at depositions about the meaning of the against the policyholder is that insurers are repeat players in
policies the insurers are selling. While the Bermuda Form dictates Bermuda Form arbitrations. Hence, because the same issues arise in
the substantive law of New York should apply, British law governs multiple arbitrations over time, insurers are able to fine-tune their
procedural issues. Thus, the procedural rules governing a Bermuda arguments and, as discussed below, they know which arbitrators
Form arbitration do not allow depositions and restrict written dis- have ruled in their favour in the past and are disposed to be swayed
covery. Practically speaking, the policyholder has no means to test by such arguments in a pending arbitration. On the other hand, it is
the document productions of Bermuda insurers, nor is there any unusual for a policyholder to be a repeat player in insurance arbitra-
threat of sanctions or penalties to compel the complete and ethical tions in the same way that insurers are.
production of documents.

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Selection of arbitrators is imperative that the chosen barrister has a ‘modern’ view of prac-
As explained above, Bermuda Form arbitrations create unique tice, and will engage with the client and the American lawyers as a
circumstances that set them apart from more traditional interna- full participant from the outset.
tional business arbitrations. In most business disputes, the players Many experienced practitioners believe that one of the most
have never been involved in prior arbitrations; namely, an arbitra- important decisions in an arbitration is the selection of the tribunal.
tion is a unique event for most businesses. Bermuda insurers, on the As discussed above, the policyholder has the right to choose an arbi-
other hand, may be involved in multiple arbitrations each year. This trator, and has input through that arbitrator in the selection of the
gives the Bermuda insurers an unparalleled advantage in choosing chair. Given that the chair will most probably be from the UK, an
an arbitrator. Because it arbitrates year in and year out, a Bermuda accessible and experienced barrister will be an invaluable resource
insurer can winnow its arbitrator choices to those few who share in the selection process.
its interpretation of the Bermuda Form in connection with similar
issues that have arisen in the past. The policyholder, on the other Prepare the case early and carefully
hand, does not have access to this same information because, more US practice permits American litigators to often sue first and develop
likely than not, the instant arbitration is the only one the policy- the facts and theories later. Most American jurisdictions permit notice
holder has experienced. Hence, it cannot determine the track record pleading, namely, describing generally what the dispute is about. The
of any potential arbitrator. Moreover, given the confidential nature specific facts and theories can be and are developed almost up to
of arbitrations, the policyholder cannot make a general inquiry to the first day of trial. The pleadings can be freely amended and the
uncover the experience of potential arbitrators. legal arguments can change daily. Your case is told through direct
Finally, the process for selecting arbitrators provides that each testimony of the witnesses during trial. Because they are governed
party selects an arbitrator and those two arbitrators, in turn, select by British procedural rules, the arbitrations have come to replicate
the third arbitrator. If the two arbitrators cannot agree on the selec- in large part British court trials and therefore this approach will not
tion of the third arbitrator, either party can petition the High Court work in a Bermuda Form arbitration.
of Justice of England and Wales to appoint the third arbitrator. This The first major difference compared with the American judicial
process means that, more often than not, the third arbitrator will be system is that pleadings take a central role in a Bermuda Form arbi-
a British barrister or former British jurist. Further, the third arbitra- tration. Rather than simply give notice in general of the dispute, the
tor, who is not appointed by either party unilaterally, is the chair of pleadings, which are exchanged shortly after the commencement of
the tribunal. the arbitration, set forth in detail each party’s legal and factual posi-
While this process does not appear to provide either side with an tion. If an argument is not laid out in these pleadings – which consist
advantage, the likely result is a majority British panel that will apply of a statement of claim by the claimant, a statement of defence by
New York law through an English law ‘prism’. On most insurance the respondent, and a reply by the claimant – the tribunal will be
issues, English law is more favourable to insurer positions than the reluctant to allow amendments as the date of hearing approaches.
law of most American jurisdictions, including New York. Insurers Additionally, a ‘directions order’ is negotiated among the tribunal
rely on this prism (and the abrogation of contra proferentem) to and the parties early in the proceedings. This order, similar to a case
advance aggressive, pro-insurer interpretations of New York law management order, sets forth the case calendar working backward
and arguments that can lack the commercial sense American courts from the hearing date, which is set in stone along with the length
require. of the hearing; a contrast to the often multiple changes in the trial
calendar one sees in American courts.
Levelling the playing field Another major difference between an American judicial pro-
While there is no doubt that the playing field is tilted toward the ceeding and a Bermuda Form arbitration that requires a party to
insurer at the outset of a Bermuda Form arbitration, there are steps prepare the case early and carefully is the manner in which witnesses
the policyholder can take that even the odds. In our experience are presented to the tribunal. The direct testimony of all witnesses is
the following steps can certainly assist in the successful outcome submitted to the tribunal and the opposing party months before the
described at the outset. hearing in the form of written witness statements or expert reports.5
Live testimony of both fact witnesses and experts is conducted only
Assemble the right team as cross-examination. This allows the insurer at the final hearing,
A Bermuda Form arbitration requires an international team of law- who will often have far fewer witnesses than the policyholder, the
yers. The events that are the subject of disputed coverage more than benefit of weeks of challenging the policyholder’s case before the
likely took place in the United States or, at the very least, did not take tribunal – without the benefits that accrue from presenting direct
place in the United Kingdom. In addition, New York is the govern- testimony.
ing law. Hence, American lawyers are needed to develop the facts Hence, the policyholder must make the tactical and strategic
and evidence under New York law. In our experience, however, it investment necessary to develop the legal theories and facts before
would be a mistake for an American lawyer to be the lead trial coun- invoking the arbitration provision in order to avoid being straitjack-
sel. George Bernard Shaw was reputed to have said that ‘England eted later by the contents of its early pleadings and direct testimony.
and America are two countries separated by a common language.’ Given the absence of direct testimony, the policyholder must also
That statement is amplified in how trials are conducted on either take great care in selecting which witnesses to present.
side of the Atlantic.
British counsel have a unique style that American attorneys can- Prepare and maintain a claim-cost analysis
not replicate, and, given that the chair of the arbitration tribunal is By prohibiting recovery for punitive damages against insurers in
invariably from the United Kingdom, the wise policyholder chooses their insurance policies, the insurers removed any financial incen-
a British barrister, who will speak the same language as the chair. tive to settle early or for a reasonable amount. If an insurer loses an
The search does not end there, however. While the UK is modern in arbitration, however, one recovery element remains for the policy-
almost all respects, legal representation remains determinedly less holder – attorneys’ fees, which can be significant. The losing party in
so. Barristers are the lead trial lawyers, who are ‘instructed’ by solici- a Bermuda Form arbitration is liable for the winning party’s costs,
tors. Traditionally, barristers seldom meet clients, do not interview which include legal fees and expenses, expert witness fees, the arbi-
witnesses, and become deeply involved in the case only in the last trators’ fees and expenses, and any other expenses associated with
few months before the hearing. Given today’s complex disputes, the conduct of the arbitration. The tribunal has almost unlimited
with key decisions made during the many months of preparation, it discretion to award costs as well as in the matter of the amount.

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In order to maximise an arbitration award, it is imperative 2 The Bermuda Form contains an arbitration provision, which
that meticulous records be kept of all expenditures, especially if replaces any underlying dispute resolution provision with a
the policyholder is engaged in multiple arbitrations with different lengthy provision specifying, among other things, that:
Bermuda insurers involving the same occurrence. In that situation,
Any dispute, controversy or claim arising out of or relat-
the policyholder can expect each insurer to attempt to pass its award
ing to this Policy or the breach, termination or invalidity
burden on to one of the other insurers or argue for an equal divi-
thereof shall be finally and fully determined in London,
sion of the award. To counter this argument and maximise the cost
England under the provisions of the Arbitration Act of
award, the policyholder should maintain separate expense records
1996 . . . by a Board composed of three arbitrators...
for each arbitration to the extent possible.
An additional provision specifies that ‘...any dispute, contro-
Conclusion versy or claim arising out of or relating to this Policy shall be
As should be obvious from the foregoing, Bermuda Form arbitra- governed by and construed in accordance with the internal laws
tions are very different from both American trials and arbitrations. of the State of New York.’ See, for example, FORM-AE02 Ed
Many of the differences are designed to give the insurer an advan- 9/08 (‘Excess Liability Insurance Policy Follow Form Claims
tage. What we have tried to do in this chapter is to provide some Made Policy Insuring Agreements’).
ideas about how policyholders can counter those inbuilt advantages. 3 Richard Jacobs, Lorelie Masters and Paul Stanley, Liability
These ideas are by no means the totality of steps a policyholder can Insurance in International Arbitration: the Bermuda Form
take to insure a fair hearing, but they should give policyholders an (Second edition, January 2011), paragraph 1 at 1-21; David
appreciation that they can vindicate their rights in spite of playing Scorey, Richard Geddes and Chris Harris, The Bermuda Form:
on the insurers’ custom-made playing field. Interpretation and Dispute Resolution of Excess Liability
Insurance (December 2011), paragraph 1 at 3-6.
Notes 4 Consolidation of the disputes is only by consent of the insurers,
1 For example, for most North American utilities the Bermuda which seldom happens.
policy purchased follows the form of the AEGIS primary policy, 5 For example, the authors submitted 21 fact witness statement
AEGIS being the industry mutual that provides much of the and seven expert reports in a current arbitration, as well as sub-
North American utility industry’s primary liability coverage. mitting supplemental statements in rebuttal of the respondent’s
witness statements and expert reports, several months before the
actual hearing.

Vivek Chopra vchopra@perkinscoie.com

Leon B Kellner lkellner@perkinscoie.com

700 13th Street NW No. 600 Tel: +1 202 654 6200

Washington, DC 20005 Fax: +1 202 654 6211
United States www.perkinscoie.com

www.gettingthedealthrough.com 9

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Financial institutions
Energy
Infrastructure, mining and commodities
Transport
Technology and innovation
Life sciences and healthcare

The Bermuda Form Arbitration

Process: A Glimpse Through The
Insurers’ Spectacles
By Mina Matin

Introduction proceedings. In particular, it takes a look at these issues

from the perspective of both insureds and insurers who
1. It is reported that, in recent years, there has been KDYHHDFKFRPHWRWKH%HUPXGD)RUPSOD\LQJʸHOGZLWK
a threefold increase in U.S. citizens giving up their LQHYLWDEO\GLʷHUHQWDQGFRPSHWLQJREMHFWLYHVEXW\HWPXVW
citizenship and becoming British, a process known in abide by the same set of rules.
U.S. tax circles as renunciation. The reason is principally
U.S. tax law and not any other. Otherwise, U.S. citizens Governing Law
are not enamoured of the U.K. Indeed, the climate in
England is notoriously atrocious, the English accent is A. Relevant Provisions
curious, and the humour is dubious. However, U.K. tax
is preferable to U.S. tax. Yet, despite their renunciation, 4. Condition O of the standard Bermuda Form Policy
these erstwhile citizens harbour a passion for U.S. laws provides insofar as material as follows:
and are really U.S. citizens with UK tax clothing.
“This Policy, and any dispute controversy or claim arising
2. The same might be said about Bermuda Form arbitrations, out of or relating to this Policy, shall be governed by and
where U.S. policyholders have embraced the idea of construed in accordance with the internal laws of the
(mainly) English arbitrations for U.S. disputes. English State of New York [Bermuda or England and Wales],
arbitration laws and practices can be preferable to U.S. except insofar as such laws:
arbitration laws and practices in certain respects even
though the policyholders are truly U.S. entities. For this (1) may prohibit payment in respect of punitive damages
reason, they have retained New York law to protect them hereunder;
whilst opting for English arbitration clothing with which
to cover them. In the same vein, it might be said that (2) pertain to regulation under the New York Insurance
Bermudian insurers have retained the cloak of protection Law or regulations issued by the Insurance Department
of English arbitration laws and practices whilst agreeing to of the State of New York pursuant thereto, applying
1HZ<RUNODZVXEMHFWWRFHUWDLQPRGLʸFDWLRQVLQDQHʷRUW to insurers doing business, or issuance, delivery or
to maintain an “even-handed” and “fair” level playing procurement of policies of insurance, within the State of
ʸHOGHYHQWKRXJKLQDOORWKHUUHVSHFWVWKHLUFXOWXUDO New York or as respects risks or insureds situated in the
DʺQLW\LVWRZDUGV(QJOLVKODZ State of New York; or

3. In this context, this Article explores some of the practical (3) are inconsistent with any provision of this Policy…”
issues that might arise in Bermuda Form arbitration (emphasis added).

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The Bermuda Form Arbitration Process: A Glimpse Through The Insurers’ Spectacles

5. The standard Bermuda Form Policy will therefore engage England. I shall proceed on this basis for the purposes of
New York law, English law or Bermuda law, depending this Article.
on the selection of the parties. The normal selection is
New York law. It is rare for the parties to select English 9. There are two consequences of the juridical seat of the
or Bermuda law to be the governing law of the contract arbitration being that of London, England:
because of the perception of policyholders (who tend to be
North American) that English and Bermuda law tends to a. Firstly, the procedural law that is applicable to the
be more favourable to insurers than to policyholders. The arbitration will be that of the English Arbitration Act
Insurance Act 2015, which came into force in England in 1996.
August 2016, might change that perception to a degree so
far as English law is concerned but Bermuda has no such b. Secondly, the arbitration will be subject to the
law and there are no signs that it is considering enacting supervisory jurisdiction of the English High Court
any equivalent. under the Arbitration Act 1996.2

6. The arbitration provision in Condition N of the Policy B. Procedural Law Applicable to the Arbitration
provides, in relevant part, as follows:
10. The Arbitration Act 1996 confers expansive powers on
“Any dispute, controversy or claim arising out of or the parties and the Tribunal. The Tribunal is required to
relating to this Policy or the breach, termination or “act fairly and impartially as between the parties” and to
LQYDOLGLW\WKHUHRIVKDOOEHʸQDOO\DQGIXOO\GHWHUPLQHG “adopt procedures suitable to the circumstances of the
in London, England under the provisions of the particular case, avoiding unnecessary delay or expense, so
Arbitration Acts of 1950, 1975, 1979 and/or any as to provide a fair means for the resolution of the matters
VWDWXWRU\PRGLʸFDWLRQRUDPHQGPHQWVWKHUHWRIRU falling to be determined.”3
the time being in force, by a Board composed of three
arbitrators to be selected as follows…” 11. The Tribunal also has a broad discretion to determine “all
procedural and evidential matters, subject to the right of
7. This provision not only makes London, England the the parties to agree any matter.”4 This includes but is not
place where the arbitration will be held (although there limited to matters such as: (a) whether and if so, what
is a discretion in the arbitration tribunal exceptionally form of pleadings are to be used and when they should
to hold the arbitration elsewhere if the circumstances be served, (b) disclosure issues, (c) whether to apply strict
demand)1 but also makes England the juridical seat rules of evidence as to the admissibility, and relevance of
of the arbitration: in other words, the arbitration is an weight of materials.5
English arbitration and is subject to the supervision and
oversight of the English Courts in accordance with English 12. What this means is that a tribunal has the discretion to
OHJLVODWLRQ7KHJHQHUDOHʷHFWLVWKDWQRRWKHUFRXUWVLQDQ\ adopt procedures that are not generally applied in English
other jurisdiction may interfere with the tribunal or have Court (or any other country’s court) proceedings. For
jurisdiction in relation to the conduct of the arbitration example, a tribunal may determine that depositions,
and any challenges to its procedures or substance. which are not deployed in English proceedings, should be
deployed. That said, the tribunal would typically tend to
8. In general, therefore, the governing law of the substantive adopt English or international arbitration procedures for
rights and obligations of the parties will be New York the conduct of the arbitration.
law whilst the law of the arbitration will be English law
with the juridical seat of the arbitration being London,

2 See section 2(1) of the 1996 Act.

3 See section 33(1) of the 1996 Act.
4 See section 34(1) of the 1996 Act.
5 See section 34(2) of the 1996 Act which sets out a list of procedural and evidential
1 See section 34(2)(a) of the Arbitration Act 1996. matters which the tribunal has a discretion to determine.

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C. Supervisory Jurisdiction of the Arbitral Process with the lex fori, the law of the forum)10 would likely
conclude that New York law applies to all issues of
13. Issues that fall within the ambit of the English High Court’s substance between the parties, including therefore issues
powers include: (a) the removal or the appointment of misrepresentation and/or non-disclosure.
of arbitrators6 (see further section C(iii) below), (b) the
substantive jurisdiction of the tribunal,7 (c) challenges to 17. 7KHWZRH[SUHVVTXDOLʸFDWLRQVWRWKHDSSOLFDWLRQRI1HZ
an arbitral award on the basis that the tribunal did not York law are as follows:
have substantive jurisdiction or on the ground of serious
irregularity and appeals.8 a. Firstly, the application of New York’s regulatory
law is excluded. The reference to “regulation under
D. Applicable Substantive Law the New York Insurance law” is likely a reference to
regulatory statutes and not to New York’s Insurance
14. As noted above, the express law governing substantive Law that pertains to issues of misrepresentation and/
legal issues is that of the internal law of New York. As a or material non-disclosure. Indeed, as noted above,
result, it is unlikely that New York’s choice of law rules the general practice is that New York Insurance Law
would apply. applies to issues of misrepresentation and material
non-disclosure.
15. Disputes have sometimes arisen as to whether New York
law governs issues of misrepresentation and/or non- b. Secondly, punitive damages are not, as a matter
disclosure. Parties have purported to assert that New of public policy under New York law, insurable. It
York law applies solely to matters of construction and IROORZVWKDWWKHPRGLʸFDWLRQWRWKHDSSOLFDWLRQRI
interpretation, and that misrepresentation and/or non- New York law that relates to “punitive damages” is
disclosure issues are not disputes that arise out of or relate likely intended to provide for the recoverability of
to the policy. punitive damages under the Bermuda Form Policy so
that a tribunal may award an indemnity in respect of
16. Under English law, disputes regarding: (a) the contractual punitive damages.
interpretation of the contract, as well as (b) the validity
of the contract including issues of misrepresentation or ( ɢ0RGLʸHGɣ1HZ<RUN
material non-disclosure are governed by the law chosen
by the parties as applicable to the substance of the 18. Condition O of the Bermuda Form Policy also provides
dispute.9 If the policy provides for English arbitration insofar as is material as follows:
in London, a tribunal applying English law (as would
normally be the case in London arbitrations where choice “[T]he provisions, stipulations, exclusions and conditions
of law clauses are ordinarily interpreted in accordance of this Policy are to be construed in an evenhanded
fashion as between the Insured and the Company; without
limitation, where the language of this Policy is deemed
to be ambiguous or otherwise unclear, the issue shall be
resolved in the manner most consistent with the relevant
provisions, exclusions and conditions (without regard
to authorship of language, without any presumption or
arbitrary interpretation of construction in favor of either
6 See sections 18, 19 and 24 of the Arbitration Act 1996.
7 See section 32(1) of the 1996 Act which provides that the court may, on the
application of a party to arbitral proceedings (upon notice to the other parties),
determine any question as to the substantive jurisdiction of the Tribunal. Such
an application will not be considered, however, unless it is made with the 10 8QGHU(QJOLVKFRQʹLFWRIODZVSULQFLSOHVZKLFKDSSO\WRDQDUELWUDWLRQVHDWHG
agreement of all the parties to the arbitration or the permission of the Tribunal in London under an arbitration agreement governed by the English Arbitration
(see section 32(2) of the Arbitration Act 1996). $FWWKHHʷHFWRIDFKRLFHRIODZFODXVHLVDPDWWHUIRUWKHOH[IRULDQG
8 See sections 67 and 68 of the Arbitration Act 1996. is determined by applying the normal English rules of interpretation: see, for
9 See section 46(1)(a) of the 1996 Act; Evans Marshall & Co. Ltd. v. Bertola SA example, Compagnie d’Armement Maritime S.A. v. Compagnie Tunisienne de
[1973] 1 WLR 349. Navigation S.A. [1971] AC 572 at p.603 (per Lord Diplock).

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the Insured or the Company or reference to the “reasonable program of which the policy forms a part.12 Examples of
expectations” of either party or to contra proferentem and extrinsic evidence which may not be deployed include:
without reference to parol or other extrinsic evidence.” pre-contractual or contemporaneous or subsequent
declarations by the one of the parties as to the meaning
19. What this means is that the following are all outlawed, of the policy, pre-contractual or contemporaneous or
namely: (i) any presumptions in favour of the insured or, post-contractual conduct or correspondence of any one
in the same vein, any anti-insurer principles, (ii) any rule of the parties from which one might be able to infer their
that applies an interpretation of the policy in accordance subjective understandings of what the policy means, and
with the reasonable expectations of the parties, (iii) testimony of the parties’ subjective intentions.
any rule that states that any ambiguity must be resolved
in favour of the insured or against the insurer, (iv) any * $UHWKHUHDOWHUQDWLYHVWRɢPRGLʸHGɣ1HZ<RUNODZ
recourse to the rule of contra proferentem (i.e., applying that should be considered?
any ambiguity in favour of the insured), and (v) any
recourse to extrinsic evidence such as the subjective views 23. Of all the laws of the individual States of the Union, New
of the parties or negotiations. York law is probably regarded as the most even-handed
as between insured and insurer. There is no doubt that
F. The Role of Extrinsic Evidence English or Bermuda insurance laws are regarded as less
favourable to insureds than even New York law but, in
20. The rationale for excluding extrinsic evidence is to truth, that is probably as much a consequence of the
prohibit contractual interpretation based upon the applicable New York legal principles, themselves, as
subjective views of the parties as to the meaning of of the disposition of English arbitrators who tend to be
the policy terms. It does not follow, however, that English Queen’s Counsel and former English judges.
the Bermuda Form Policy should be construed in These arbitrators are in fact notoriously even-handed as
isolation without regard, for example, to the contextual between insureds and insurers but, from the perspective
circumstances in which it was entered into, the of North American insureds and their lawyers, who have
commercial purpose of the policy and its terms, and the come generally to expect tribunals to be pro-insured, they
knowledge of both parties of extraneous facts that might therefore seem to be more favourable to insurers. That is
KDYHLQʹXHQFHGWKHLUDJUHHPHQW simply the product, however, of their even-handedness.

21. This is not considered to be inconsistent with New 24. It would be rare (and possibly ill-advised) for a
York law which provides that the fundamental rule in policyholder to choose English or Bermuda governing
the construction of all contracts, including insurance law above New York law. Similarly, it would be rare (and
contracts, is to enforce the mutual intent of the parties at possibly ill-advised) for an insurer to choose arbitration
the time that the contract was formed as expressed in the other than in London, England, or Bermuda. The
unequivocal language employed in the contract.11 combination that has worked reasonably well until now is
WRKDYHPRGLʸHG1HZ<RUNJRYHUQLQJODZZLWK(QJOLVKRU
22. Examples of extrinsic evidence that might be deployed Bermuda arbitration. In that way, the competing interests
include: issues as to the custom and practice or known of the parties are reasonably well balanced.
purpose of a particular provision; or the structure of the

12 See e.g., Newmont Mines Limited v. Hanover Insurance Company 784 F.2d 127,
135 (2d Cir. 1986): “The cardinal principle for the construction and interpretation
of insurance contracts – as with all other contracts – is that the intentions of the
parties should control. See, e.g., 29 N.Y. Jur. Insurance §§ 593-594 (1963). Unless
otherwise indicated, words should be given the meanings ordinarily ascribed
to them and absurd results should be avoided. As we have stated before, the
11 See Breed v. Insurance Co. of North Am., 46 N.Y.2d 351, 355, 413 N.Y.S.2d 352, meaning of particular language found in insurance policies should be examined
355 (1978); United States Fidelity & Guaranty Co. v. Annuziata, 67 N.Y.2d 229, ‘in the light of the business purposes sought to be achieved by the parties and the
232, 501 N.Y.S.2d 790, 791 (1986) (“Where the provisions of the policy are clear SODLQPHDQLQJRIWKHZRUGVFKRVHQE\WKHPWRHʷHFWWKRVHSXUSRVHVɠ&KDPSLRQ
and unambiguous, they must be given their plain and ordinary meaning, and International Corp. v. Continental Cas. Co., 546 F.2d 502, 505 (2d Cir. 1976), cert.
courts should refrain from rewriting the agreement.”) denied, 434 U.S. 819 (1977).”

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Selection of Arbitrators 29. As a general practice, insurers in a Bermuda Form

arbitration tend to appoint English Queen’s Counsel or
A. The Selection Process retired English Commercial Court Judges as their party
appointed arbitrator and/or put forward their names
25. 2QHRIWKHFULWLFDOʸUVWVWHSVDQGRIWHQWKHNH\WRVXFFHVV as the chairperson. This practice has arisen in part for
in the arbitral process is the selection of arbitrators. As cultural reasons (see above) but also because of their
Alexander Graham Bell said, “[b]efore anything else, analytical approach to contractual interpretation which is
preparation is the key to success.” A poor selection of an often key to an insurer’s defences. Whilst insureds also
arbitral tribunal can lead to devastating results. appoint English Queen’s Counsel, they also often seek to
appoint U.S. arbitrators who, they think, might be more
26. In a Bermuda Form arbitration, there will generally inclined to be understanding of, and more favourable, to
be three (impartial) arbitrators: two party appointed policyholders.
arbitrators together with a chairperson.
30. Unlike the more adversarial systems in other parts of
27. The decision to appoint an arbitrator often involves the world, all three arbitrators must be “impartial” and
detailed investigations into proposed arbitrators having “independent.” Impartiality and independence extend to
UHJDUGWRWKHLUH[SHULHQFHDQGTXDOLʸFDWLRQVDQGWKH those instances where an arbitrator has already expressed
merits of the case. That said, unlike U.S. proceedings, a view adverse to a party in the same or a related case.
detailed interviews with prospective candidates are not Thus, it has been held by the English Court of Appeal that,
commonplace.” “[t]he mere fact that a judge earlier in the same case or in
a previous case, had commented adversely on a party or
28. A good guide to those communications that are a witness, or found the evidence of a party or a witness to
appropriate are set out in the Chartered Institute of be unreliable, would not without more found a sustainable
Arbitrators International Arbitration Practice Guideline objection.” It should, therefore, be noted that the fact
on “Interviews for Prospective Arbitrators” (“CIA that an arbitrator has been appointed for one party in a
Guidelines on Interviews”). The CIA Guidelines on prior arbitration and/or has determined certain issues
Interviews provide that it is permissible to have initial which may well arise in a subsequent arbitration, does
contact with a prospective arbitrator and to interview the not preclude that arbitrator from acting in a subsequent
arbitrator but only to the extent of ascertaining: (i) his related arbitration (see further paragraphs 32 to 37
past experience in international arbitration, (ii) expertise below). Quite often in these situations, a party might
in the subject matter of the dispute, (iii) his availability, make noises of unhappiness without, however, formally
including the expected timetable of the proceedings objecting. The arbitrator might then decide to resign or
and estimated timings and length of hearing and/or (iv) not to accept the appointment - but that will be in order to
the arbitrator’s fees and other terms of appointment.13 avoid any sense of grievance rather than because of any
Matters that should not be discussed include: (i) the legal imperative.
VSHFLʸFIDFWVRUFLUFXPVWDQFHVJLYLQJULVHWRWKHGLVSXWH
(ii) the positions or arguments of the parties, (iii) the B. Frequent Flyer appointments
merits of the case, and (iv) the prospective arbitrator’s
views on the merits, parties’ arguments and/or claims.14 31. A recurrent criticism levied by policyholders against
Moreover, ex parte communications between an arbitrator LQVXUHUVLVZKDWKDVEHHQGHVFULEHGDVɢIUHTXHQWʹ\HUɣ
and those appointing him are generally forbidden. appointments i.e., repeated and frequent appointment
of the same arbitrator as the gateway to a favourable
outcome. Such criticisms are usually entirely baseless
ZLWKWKHVSHFLʸFH[FHSWLRQRIWKHFLUFXPVWDQFHVWKDW
DUHLGHQWLʸHGEHORZLQVHFWLRQ(LLL,QGHHGWKHVDPH
could be said of insureds in their selection of arbitrators.
13 See Article 2 (Matters to discuss at an interview prior to appointment) of the
Chartered Institute of Arbitrators International Arbitration Practice Guideline on In light of the select pool of truly expert and appropriate
“Interviews for Prospective Arbitrators.” arbitrators for a Bermuda Form dispute, it is inevitable
14 See Article 3 (Matters that should not be discussed) of the Chartered Institute
of Arbitrators International Arbitration Practice Guideline on “Interviews for
that the same arbitrator may be appointed in multiple
Prospective Arbitrators.”

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arbitrations. successful before one tribunal, may then be tempted

to appoint one of its members…as arbitrator in a
32. In a recent decision in the Commercial Court, England, subsequent arbitration. Similarly, if insurer A has
Mr. Justice Popplewell held that the appointment of an EHHQVXFFHVVIXOLQWKHʸUVWDUELWUDWLRQLQVXUHU%PD\
DUELWUDWRULQUHODWHGDUELWUDWLRQVZDVLQVXʺFLHQWWRFUHDWH in practice learn of this success and the identity of the
an appearance of bias per se to justify his or her removal DUELWUDWRUVZKRKDYHXSKHOGLQVXUHU$ɠVDUJXPHQWV
under section 24(1) of the Arbitration Act 1996.15 It follows from Locabail and Amec that an objection
to the appointment of a member of a previous panel
33. Section 33 of the Arbitration Act 1996 requires the would not be sustained simply on the basis that the
tribunal to act fairly and impartially between the parties. arbitrator had decided a particular issue in favour of
The question whether circumstances exist which give one or other party. It equally follows that an arbitrator
ULVHWRMXVWLʸDEOHGRXEWVDVWRDQDUELWUDWRUɠVLPSDUWLDOLW\ can properly be appointed at the outset in respect of a
is to be determined by applying the common law test for number of layers of coverage, even though he may then
apparent bias,16 namely, whether the fair-minded and decide the dispute under one layer before the hearing
informed observer, having considered the facts, would on another layer.”18
conclude that there was a real possibility that the tribunal
was biased.17 The test is an objective one. 36. Mr. Justice Popplewell’s ruling might be considered a
little naïve and unworldly by some, especially any who
34. Mr. Justice Popplewell relied upon the case of Amec have had an unsettling experience of serial appointments
Capital Projects Ltd. v. Whitefriars City Estates Ltd. [2004] and serial appointees. However, extrapolating from
EWCA Civ. 1418 in support of the proposition that, “the the fundamental principle that the English arbitral
mere fact that the tribunal has previously decided the issues process requires “impartiality,” the relevance of an
>LQDVHSDUDWHDGMXGLFDWLRQ@LVQRWRILWVHOIVXʺFLHQWWR arbitrator having acted in related arbitrations is, at least
justify a conclusion of apparent bias. Judges are assumed conceptually, diminished.
to be trustworthy and to understand that they should
approach every case with an open mind. The same applies 37. Moreover, the decision did not address the frequency
to adjudicators, who are almost always professional with which an arbitrator may act in related proceedings
persons.” and repeated appointments on behalf of a party. To this
end, in my experience, most parties to the Bermuda Form
35. He went on to say that these comments apply with as DUELWUDOSURFHVVDELGHE\WKH,%$*XLGHOLQHVRQ&RQʹLFW
much force to arbitrators in international reinsurance of Interest. The IBA Guidelines provide, among other
DUELWUDWLRQV+HVSHFLʸFDOO\FRPPHQWHGWKDWLQUHODWLRQ things, that doubts as to an arbitrator’s impartiality or
to Bermuda Form arbitrations, independence may arise if the arbitrator has, within the
past three years, been appointed as arbitrator on two or
“[a] number of arbitrations may be commenced PRUHRFFDVLRQVE\RQHRIWKHSDUWLHVRUDQDʺOLDWHRIRQH
around the same time, and the same arbitrator of the parties.19
may be appointed at the outset in respect of all
these arbitrations. Another possibility is that there C. Methods of agreeing the Third Arbitrator
are successive arbitrations, for example because
the policyholder wishes to see the outcome of an 38. Typically, the chairperson or third arbitrator is selected
DUELWUDWLRQRQWKHʸUVWOD\HUEHIRUHHPEDUNLQJRQ by the two party appointed arbitrators. A list of names
further proceedings. A policyholder, who has been might be given by each side to the two party appointed
arbitrators with view to those arbitrators selecting a third
who is common to both lists. In some arbitrations, where

15 See H v L & Ors. [2017] EWHC 137 (Comm.)

16 6HH/RFDEDLO8./WGY%D\ʸHOG3URSHUWLHV/WG[2000] QB 451 at 17; A v. B
[2011] 2 Lloyd’s Rep. 591 at 22 and Sierra Fishing Co. v. Farran [2015] EWHC 18 Id at para. 28 (citing with approval an extract from “Liability Insurance in
140 at 51. International Arbitration,” 2nd Edn at 14.32).
17 See Porter v. Magill [2002] AC 357 per Lord Hope at 103. 19 6HHSDUDJUDSKRIWKH,%$*XLGHOLQHVRQ&RQʹLFWVRI,QWHUHVW

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the parties cannot come together, and where even the two such appointments (or any one or more of them)
appointed arbitrators cannot agree, the third arbitrator is as have been made;
selected by a drawing of lots. In the event, however, that
both parties are unable to select a common arbitrator as 3. To revoke any appointments already made;
the chairperson, the dispute can be referred to the English
%HUPXGD+LJK&RXUWZKLFKZLOOPDNHWKHʸQDOFKRLFH 4. To make any necessary appointments itself.
(Emphasis added).
D. Default Selection by the English High Court
41. Section 27 of the Act further provides:
39. Section 16 of the Arbitration Act 1996 provides as follows:
a. :KHUHDQDUELWUDWRUFHDVHVWRKROGRʺFHWKHSDUWLHV
a. The parties are free to agree on a procedure for are free to agree-
appointing the arbitrator or arbitrators, including the
procedure for appointing any chairman or umpire. 1. Whether and if so how the vacancy is to be
ʸOOHGɨ
b. If or to the extent there is no such agreement, the
following provisions apply. b. If or to the extent that there is no such agreement, the
following provisions apply.
… (Emphasis added).
c. The provisions of section 16 (procedure for
(5) If the tribunal is to consist of two arbitrators and an appointment of arbitrators) and 18 (failure of
umpire- appointment procedure) apply in relation to the
ʸOOLQJRIWKHYDFDQF\DVLQUHODWLRQWRDQRULJLQDO
(a) each party shall appoint one arbitrator not later appointment. (Emphasis added).
than 14 days after service of a request in writing by
either party to do so. 42. In order to invoke these provisions, a party must satisfy
the court that there is no agreement as to the procedure for
(7) In any other case (in particular, if there are more the appointment of a third arbitrator or that the procedure
than two parties) section 18 applies as in the case has failed.
of a failure of the agreed appointment procedure.
(Emphasis added). 43. It is rare for the Court to have to intervene. Normally, the
SDUWLHVDQGRUWKHWZRDSSRLQWHGDUELWUDWRUVʸQGVRPH
40. Section 18 of the Act provides as follows: means for the appointment of the third arbitrator even if
WKHʸQDOUHVXOWVDWLVʸHVQRERG\YHU\PXFKRUHQWLUHO\
a. The parties are free to agree what is to happen
in the event of a failure of the procedure for the Choice of Counsel
appointment of the arbitral tribunal.
A. Is English Counsel desirable?
b. If or to the extent that there is no such agreement any
party to the arbitration agreement may (upon notice 44. “Unless otherwise agreed by the parties,” either party may
to the other parties) apply to the court to exercise its be represented in the arbitration proceedings by “a lawyer
powers under this section. or other person chosen by him.”20

c. Those powers are- 45. Given that the juridical seat of the arbitration is in London
and the applicable procedural law of the arbitration will
1. To give directions as to the making of any
necessary appointments;

2. To direct that the tribunal shall be constituted by

20 See section 36 of the 1996 Act.

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be that of English law pursuant to the provisions of the coverage that are placed with one or more insurers usually
Arbitration Act 1996, the general trend is towards the in the Bermudian market. For example, a basic program
choice of English Counsel, usually a Queen’s Counsel, as might be as follows:
the lead advocate. This is also partly for cultural reasons
as well as the fact that the tribunal will commonly have 49. Let us assume that the insured faces multiple claims
two English lawyers on the panel. Counsel will likely amounting to over $200 million in losses which it seeks
have appeared before the arbitrators in other Bermuda to recover from its insurers. All insurers A, B, C, D and
Form disputes and will therefore have some familiarity E deny coverage. The insured therefore commences
with the workings of the Form and with Bermuda Form arbitration proceedings against all of the insurers to
arbitrations. There is, of course, nothing to prevent the recover $175 million.
use of U.S. Counsel as the lead advocate on the matter.
%RWK(QJOLVKDQGRU86&RXQVHODUHHTXDOO\HʷHFWLYH % +RZZRXOGLWZRUN"

$100 M xs $100 M Insurers A & C 50. In this scenario, the insured may well desire to consolidate
the proceedings in order to minimize its costs. In certain
cases, consolidation may be desirable and more cost
$50 M xs $50 M Insurers B, C, D & E HʷHFWLYHIRUERWKSDUWLHV)RUH[DPSOHWKHGLVSXWH
between the insured and insurers B, C, D and E in respect
Insurer A of the layer $50 million excess of $50 million.
$25 M xs $25 M
51. From an insurer’s perspective, however, consolidation of
Insured all the disputes may be not be desirable for the following
reasons:

B. Can English Counsel be from the same chambers as (a) The Bermuda Form Policy is a standalone Policy
an arbitrator? such that the terms and conditions pertaining to each
Policy are separate and unique.
46. The short answer is, yes. Instinctively, this might
appear unjust especially to those accustomed to the U.S. (b) It is possible that the issues pertaining to each layer of
DGYHUVDULDOV\VWHP,WLVDOVRQRWXQFRPPRQWRʸQGWKDW FRYHUDJHZLOOEHGLʷHUHQWHVSHFLDOO\LQFLUFXPVWDQFHV
Counsel from the same set of chambers are on opposite where a defence of misrepresentation and/or non-
sides. In the latter instances, these arbitrations sometimes disclosure is raised which is contingent upon the
are the most bitterly fought. subjective expectation and belief of the underwriter
for each insurer.
Consolidation of Related Proceedings Among
Insurers In the Same Tower or Layer (c) It is possible that one insurer does not wish to be
associated with another for commercial and other
A. Is Consolidation Desirable? reasons. It is possible that one insurer will wish
to take certain points but not others while another
47. Section 35 of the Arbitration Act 1996 provides that the LQVXUHUZLVKHVWRWDNHDGLʷHUHQWOLQH2QHLQVXUHU
parties may agree that: (a) arbitral proceedings shall be might be more inclined to compromise with the
consolidated with other arbitral proceedings, or (b) that insured than another insurer and might wish,
concurrent hearings shall be held, on such terms that are therefore, to have separate lines of communication.
agreed between them. The tribunal has no independent There are a myriad of reasons why insurers might not
power to order the consolidation of proceedings or want to be joined with others in a common defence.
concurrent hearings.
(d) Even if the issues pertaining to each dispute are the
48. Insurance coverage to an insured under the Bermuda same, it does not follow as a matter of course that
Policy generally consists of several layers of excess of loss a consolidated arbitration will be less costly. Each

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insurer might want, despite likely discouragement court will apply is that of a “fair-minded and informed
from the insured and the tribunal, its own counsel to objective observer” and whether there is, based upon
present its case. the facts of the case, a reasonable possibility that the
arbitrator is biased.21
52. These are just some of the factors that might bear upon
an insurer’s decision whether to seek agreement for &RQʸGHQWLDOLW\RI3URFHHGLQJV
consolidation or not. Each arbitration must, of course,
EHYLHZHGXSRQWKHIDFWVVSHFLʸFWRWKDWDUELWUDWLRQDQG $ $UHWKHSURFHHGLQJVLQKHUHQWO\FRQʸGHQWLDO"
insurers may well be willing to consolidate proceedings
with other insurers in the tower under the appropriate 57. 7KHJHQHVLVRIWKHFRQʸGHQWLDOLW\RIDUELWUDWLRQ
circumstances. proceedings arose under English common law as an
adjunct to the implied obligation and/or an implied
C. Implications of the policyholder choosing the same term of the arbitration agreement in relation to the
DUELWUDWRULQGLʷHUHQWDUELWUDWLRQVLQWKHVDPHWRZHU discoverability of documents.22 The Court of Appeal has
held that:
53. A policyholder may well desire to choose the same
DUELWUDWRULQGLʷHUHQWDUELWUDWLRQVDJDLQVWGLʷHUHQW “…there is an obligation, implied by law and arising
insurers but in the same tower. The logical reason being out of the nature of arbitration, on both parties not
that the particular arbitrator selected will be well versed to disclose or use for any purpose any documents
in the factual matrix and the issues (which are likely to be prepared for and used in arbitration, or disclosed or
similar) in each of the respective arbitrations. produced in the course of arbitration, or transcripts or
notes of the evidence in the arbitration or the award.”23
54. From the perspective of each respective insurer in the
tower of insurance, selection of the same arbitrator is 58. The Court of Appeal recognized, however, an overriding
wholly undesirable. Even though the arbitrator is required public interest favouring the disclosure of documents
to act impartially and independently, that arbitrator will in circumstances where: (a) the parties expressly or
inevitably glean and be privy to facts and information impliedly consent to disclosure, (b) where it is reasonably
(including factual and/or expert evidence) from some necessary for the protection of the legitimate interests of
of the arbitration proceedings that are absent in other an arbitrating party, and (c) where the interests of justice
proceedings and which will most likely colour his views require disclosure.
even if not always consciously).
59. 7KH(QJOLVKFRXUWVFRQVLGHUWKHSULYDWHDQGFRQʸGHQWLDO
55. 55. As noted above, the mere fact that an arbitrator takes nature of arbitration under English procedure as
a view in one proceeding does not per se preclude him being paramount unless the interests of justice dictate
from acting in another proceeding involving the same RWKHUZLVH7KLVH[WHQGVWRFRQʸGHQWLDOLW\LQHYHU\DVSHFW
issue. To this end, the recent U.K. Commercial Court of the arbitration, not just documents. It extends to
decision of H v L (see paragraphs 32 to 37 above) might be evidence, arguments, pleadings and the award.
VDLGWRLQXUHWRWKHEHQHʸWRIWKHSROLF\KROGHURYHUWKDW
of insurers) in its ability to appoint the same arbitrator % ,VFRQʸGHQWLDOLW\GHVLUDEOH"
in multiple arbitrations against other insurers who
participate in higher layers in the Bermuda Form Tower. 60. &RQʸGHQWLDOLW\RIWKHDUELWUDOSURFHHGLQJVDQGRIWKH
documents produced in those proceedings may be
56. That said, if and insofar as it can be shown that the desirable from the perspective of both the insured and the
repeated appointment of a particular arbitrator gives
ULVHWRɢMXVWLʸDEOHGRXEWVDVWRKLVLPSDUWLDOLW\ɣZKLFKLV
the ground for challenging an arbitrator’s appointment
pursuant to section 24 of the Arbitration Act 1996,
proceedings may be brought before the UK High Court for 21 See Laker Airways v. FLS Aerospace [1999] 2 Lloyd’s Rep. 45 at 48 (per Rix J).
22 See Dolling-Baker v. Merrett [1990] 1 W.L.R. 1205; Ali Shipping Corp. v. Shipyard
his or her removal. As highlighted above, the test that the Trogir [1991] 1 W.L.R. 314.
23 See Emmott v. Michael Wilson & Partners Ltd. [2008] EWCA Civ. 184.

Norton Rose Fulbright – October 2017 09

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 Session Materials ARIAS•U.S. 2017 Fall Conference

The Bermuda Form Arbitration Process: A Glimpse Through The Insurers’ Spectacles

insurer: LLDGYHUVHO\DʷHFWDQRWKHUSDUW\ɠVFDVHRULLLVXSSRUW

another party’s case.24
a. In the case of the insured who may still be litigating
the underlying claims throughout the U.S., the 63. Many Bermuda Form arbitrations will adopt “standard
insured may wish to preserve privilege in respect disclosure” as the springboard for disclosure with
of documents produced in the arbitration to IXUWKHUDQGVSHFLʸFSURYLVLRQJHQHUDOO\LQWKH2UGHU
avoid disclosure in the underlying proceedings, IRU'LUHFWLRQVIRUWKHIXUWKHUGLVFORVXUHRIVSHFLʸF
or alternatively to conceal arguments that were GRFXPHQWV8VXDOO\UHTXHVWVIRUIXUWKHUDQGVSHFLʸF
ultimately successful in the arbitration. This might disclosure are presented in the form of a “Redfern
also be especially so in circumstances where the 6FKHGXOHɣZLWKHDFKSDUW\LGHQWLI\LQJDWKHVSHFLʸF
LQVXUHGLVʸJKWLQJPXOWLSOHFRQFXUUHQWDQGVHSDUDWH categories of documents sought, (b) the basis for their
arbitrations with each of the insurers in the tower of relevance, and (c) any objections to the requests for
insurance. Knowledge of key arguments deployed, disclosure. Insofar as there are objections to requests
documents produced and so forth might have a (which is often the case), the dispute will be heard and
GHWULPHQWDOHʷHFWXSRQWKHUHVXOWRIWKHDUELWUDWLRQVLQ dealt with by the tribunal which has the jurisdiction
each of the proceedings. (pursuant to its broad powers to determine evidential
and procedural matters) to make any such orders for the
b. In the same vein, insurers may wish to prevent production and/or withholding of documents. Generally,
arguments that have been successfully maintained a procedure for the resolution of disclosure disputes is
against them from being adopted by other insureds provided for in the Initial Order for Directions to prevent
and/or documents (in particular the arbitration award any disclosure disputes from derailing the timetable of the
itself) from being produced in other and/or similar arbitration proceeding itself.
arbitration proceedings involving similar claims
against the insurer. Insurers are also motivated by 64. The parties, however, may agree to adopt an alternative
a desire to avoid any publicity that would likely be procedure for the production of documents. A common
generated by an arbitral process that was not private approach is that taken pursuant to the IBA Rules on
DQGFRQʸGHQWLDO the Taking of Evidence in International Commercial
Arbitration (“IBA Rules”). The starting point is Article 3
& ,VFRQʸGHQWLDOLW\DFWXDOO\REVHUYHGLQSUDFWLFH" of the IBA Rules, which places the onus upon each party
to produce to the other party the documents upon which
61. &ULWLFLVPVKDYHEHHQUDLVHGWKDWFRQʸGHQWLDOLW\LVPRRW it relies. Either party may, in response, serve a “Request
since it is not observed in practice. In my view, such to Produce” to additional documents. The IBA Rules
criticisms lack merit. Those who are involved in the encourage the parties to resolve any disputes regarding
Bermuda Form arbitral process generally abide by its rules disclosure and only failing which the tribunal will
and if they do not, they ought to. consider the Requests to Produce and whether additional
GLVFORVXUHVKRXOGEHSURYLGHG$IXQGDPHQWDOGLʷHUHQFH
Document Disclosure Issues between the IBA Rules and the English CPR Rules is that
only those documents upon which a party “relies” are
A. What is the appropriate process for requests, UHTXLUHGWREHSURGXFHGLQWKHʸUVWLQVWDQFH%\FRQWUDVW
REMHFWLRQVDQGVHDUFKHʷRUWV" the CPR Rules require a party to disclose those documents
not only upon which it relies, but which are also adverse
62. Pursuant to the English Civil Procedure Rules (“CPR”) to its case.
which apply to court proceedings, “standard disclosure”
requires a party to disclose and make a reasonable search B. Should there be reasonable limits on electronic
for those documents: (a) upon which he relies, and (b) discovery?
WKHGRFXPHQWVZKLFKLDGYHUVHO\DʷHFWKLVRZQFDVH

24 See Part 31 of the CPR and the supplemental Practice Direction.

10 Norton Rose Fulbright – October 2017

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 Session Materials

The Bermuda Form Arbitration Process: A Glimpse Through The Insurers’ Spectacles

65. The intrinsic nature of Bermuda Form disputes is such determined by the Arbitration Act 1996.
that the claims often arise out of extensive underlying
OLWLJDWLRQEHWZHHQWKHLQVXUHGDQGSODLQWLʷVFRPPRQO\ 68. Generally, therefore, an arbitral tribunal in a London
in multiple class action lawsuits) throughout the United arbitration with its juridical seat in England will apply
States in a number of jurisdictions. Consequently a English law to the question of privilege on the basis that
vast number of documents is produced including fact English law is the law of the forum where the arbitration is
and expert deposition transcripts and exhibits, experts’ taking place.25 Indeed, it has been commented that, “[t]he
reports and so forth. Insureds are sometimes reluctant cases demonstrate that the English courts apply the simple
to produce voluminous and irrelevant documentation UXOHXQGHU(QJOLVK&RQʹLFWRI/DZUXOHVWKDWLWLVWKHOH[
ZKLOVWLQVXUHUVVLPLODUO\ʸQGWKHYROXPLQRXVSURGXFWLRQ fori that applies to determine whether a communication is
of largely irrelevant material to be burdensome. Moreover, privileged.”26 It is therefore irrelevant whether (in the case
the general trend in U.S. proceedings is for attorneys to of disclosure issues) a document would be a privileged
provide disclosure of documents as they appear in their communication under a foreign (i.e. non-English) law, not
FOLHQWVɠʸOHVRUDOWHUQDWLYHO\LQUHVSRQVHWRGRFXPHQW privileged under a foreign law or whether privilege has
requests. Notoriously, in the former case, the documents been waived as a matter of foreign law.
that are produced are not organized in any or any orderly
fashion much to the dissatisfaction of insurers. By 69. It has been suggested that section 34 of the Arbitration
contrast, disclosure in English proceedings is by reference Act 1996 which provides that the tribunal shall determine
to relevant categories of documents that are often ordered all procedural and evidential matters including whether
chronologically. any documents should be disclosed, extends to privilege
such that a tribunal may decline to apply English laws
66. This begs the question as to the appropriate limits of pertaining to privilege. It has been commented, however,
electronic discovery especially in circumstances where that “[p]rivilege is not a matter of discretion: it is a
there will undoubtedly be enormous quantities of fundamental rule of law”27:
documentation and the parties will be required to have
made a reasonable search for documents. In this regard, “Legal professional privilege is…much more than an
the advantage of an English arbitration is that the tribunal ordinary rule of evidence, limited in its application
will only order disclosure insofar as it is: (a) relevant to the to the facts of the particular case. It is a fundamental
issues in dispute, and (b) is necessary and proportionate condition on which the administration of justice as a
having regard to the issues and complexities of the case. whole rests.”28
It follows that a tribunal may consider it appropriate
for a reasonable search of electronic documents to have 70. It follows that, in an English arbitration that is subject to
been made and to be produced by reference to pertinent English curial and procedural law, the tribunal would be
keyword searches and also having regard to the cost and very unlikely to order the disclosure of those documents
ease with which particular electronic documents may be that are, under English law, privileged in the absence
retrieved. Guidance may be obtained from the Practice of an agreement between the parties otherwise. As to
Directions that supplement Part 31 of the CPR Rules. those documents that are not privileged under English
law but are privileged under some other, relevant law, it
C. What privilege law applies? always lies in the discretion of the tribunal not to order
disclosure: not necessarily on the basis of non-English
67. During the course of the disclosure process questions privilege but on the basis of the tribunal’s discretion
and/or disputes sometime arise as to the applicable law
insofar as privilege is concerned i.e., whether English law,
New York law or the law of another U.S. state applies. The
choice of law rules that are applicable to any dispute are
25 See Bourns v. Raychem [1993] 3 All ER 154; British American Tobacco
generally governed by the lex fori (i.e., the law of forum) Investments Ltd. v. United States of America [2004] EWCA Civ. 1064.
which, in a Bermuda Form dispute, will typically be that 26 See Thanki, The Law of Privilege (2006) at § 4.79
RI(QJODQGRU%HUPXGD3XUVXDQWWR(QJOLVKFRQʹLFWVRI 27 See “Liability Insurance in International Arbitration: The Bermuda Form” (Second
Edition) by Jacobs QC, Masters and Stanley QC at §16.20, p. 317.
law rules, procedural issues are governed by English law as 28 See R v. Derby Magistrates’ Court ex parte B [1996] 1 AC 487, 507; See also R
(Morgan Grenfell Ltd.) v. Special Commissioner [2003] 1 AC 563.

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 Session Materials ARIAS•U.S. 2017 Fall Conference

nortonrosefulbright.com

Contacts
If you would like further information please contact:

New York
Mina Matin
Senior Counsel
+1 212 408 5150
mina.matin@nortonrosefulbright.com

0V0DWLQLVGXDOO\TXDOLʸHGDVDVROLFLWRUDQGEDUULVWHULQ(QJODQGDQG:DOHVDVZHOODVDPHPEHURIWKH%HUPXGD
California and New York Bars. She is ranked as a recognised practitioner in insurance, New York, Chambers &
Partners USA 2017.

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Norton Rose Fulbright is a global law firm. We provide the world’s preeminent corporations and financial institutions with a full business law
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SRVVLEOHVWDQGDUGRIOHJDOVHUYLFHLQHDFKRIRXURIILFHVDQGWRPDLQWDLQWKDWOHYHORITXDOLW\DWHYHU\SRLQWRIFRQWDFW

1RUWRQ5RVH)XOEULJKW9HUHLQD6ZLVVYHUHLQKHOSVFRRUGLQDWHWKHDFWLYLWLHVRI1RUWRQ5RVH)XOEULJKWPHPEHUVEXWGRHVQRWLWVHOISURYLGHOHJDOVHUYLFHVWRFOLHQWV1RUWRQ5RVH)XOEULJKWKDVRʺ
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contact at Norton Rose Fulbright.

© Norton Rose Fulbright US LLP BDD9033 10/17 Extracts may be copied provided their source is acknowledged.

172
 Session Materials

THE ARIAS•U.S. 2017 FALL CONFERENCE AND ANNUAL MEETING WILL BE CONDUCTED UNDER
THE ARIAS•U.S. ANTITRUST POLICY

ARIAS•U.S. POLICY STATEMENT AND

GUIDELINES CONCERNING ANTITRUST COMPLIANCE

ARIAS•U.S. is a not-for-profit corporation that promotes improvement of the insurance and reinsurance
arbitration process for the international and domestic markets. ARIAS•U.S. provides initial training, continuing in-
depth conferences and workshops in the skills necessary to serve effectively on an insurance/reinsurance arbitration
panel. In addition, ARIAS•U.S. certifies a pool of qualified arbitrators and serves as a resource for parties involved in
a dispute to find the appropriate persons to resolve the matter in a professional, knowledgeable and cost-effective
manner.

ARIAS•U.S. members include representatives of insurance companies, reinsurance companies, law firms and
independent contractors with experience in the field. Some of the participants in ARIAS•U.S. meetings may be in
competition with one another. For this reason, ARIAS•U.S. wishes to state unequivocal support for the policy of
competition served by the antitrust laws.

The Policy of ARIAS•U.S. Requires Full Compliance with the Antitrust Laws

ARIAS•U.S. is firmly committed to free competition. In particular, ARIAS•U.S. stresses that members have
and retain full and exclusive authority for making their own decisions in arbitrations or litigations in which they are
involved, as well as in all of their business activities. ARIAS•U.S. does not in any way serve to facilitate agreements
among competitors to coordinate their activities with respect to billing practices, collections, underwriting, or any
other competitively sensitive activity of insurers or reinsurers. Rather, ARIAS•U.S. exists solely in order to provide
educational and informational assistance in connection with the dispute-resolution process of arbitration or litigation.

Although the activities of ARIAS•U.S. are not intended to restrain competition in any manner, it is always
possible that meetings involving competitors could be seen by some as an opportunity to engage in anti-competitive
conduct. Good business judgment requires making substantial efforts to safeguard against any appearance of an
antitrust violation -- both because ARIAS•U.S. has a firm commitment to the principle of free competition, and
because the penalties for antitrust violations are severe. Certain violations of the Sherman Act, such as price fixing,
are felony crimes for which individuals may be imprisoned or fined. In recent years, corporations have paid hundreds
of millions of dollars in fines for these antitrust offenses. In addition, class actions and other treble damage claims by
private parties are very expensive to litigate and can result in large judgments. Penalties might be imposed upon
ARIAS•U.S., its individual and corporate members, and their individual representatives if they were adjudged to have
violated the antitrust laws in connection with their ARIAS•U.S. activities. Members should not count on an antitrust
immunity simply because insurance is a highly regulated industry.

It is the responsibility of every member of ARIAS•U.S. fully to comply with the antitrust laws in all
ARIAS•U.S. activities. In order to assist members in recognizing situations that may raise the appearance of an
antitrust problem, the meeting chair shall furnish at each meeting a copy of this Policy Statement and the following
Guidelines.

Guidelines to Ensure Antitrust Compliance

Many ARIAS•U.S. members are skilled in the legal process and may be expected to understand their
responsibility under the antitrust laws. Nonetheless, it is useful to state, as a reminder, some basic guidelines that will
minimize potential antitrust risk.

1. ARIAS•U.S. members may freely discuss matters that are not competitively sensitive, such as legal
developments, ethical principles, procedures, laws that affect the industry, ways to make proceedings more efficient,
and technical problems involved in arbitration or litigation. It is permissible, for example, to draft sample arbitration
clauses that parties may select on a voluntary basis.

2. ARIAS•U.S. meetings and activities shall not be used as an occasion to reach or attempt to reach any
understanding or agreement among competitors -- whether written or oral, formal or informal, express or implied -- to
coordinate their activities with regard to billing, collections, premiums, terms or conditions of contracts, territories or
customers. Thus, for example, competing cedents (or competing reinsurers) should not agree with one another that
they will require use of a particular arbitration clause, and especially should not agree that they will boycott parties
that reject the clause.

173
 Session Materials ARIAS•U.S. 2017 Fall Conference

3. The best way to guard against the appearance of such an agreement is to avoid any discussion of
subjects that might raise concern as a restraint on competition. Accordingly, ARIAS•U.S. meetings and activities
shall not be used as the occasion for competitors to exchange information on any competitively sensitive subjects,
including the following:

(a) ARIAS•U.S. activities and communications shall not include discussion among competitors
to coordinate their activities with respect to billing practices, collection activities, premium
setting, reserves, costs, or allocation of territories or customers.

(b) ARIAS•U.S. members shall not use the occasion of any ARIAS•U.S. activities to discuss
coordinated actions involving other competitors, suppliers or customers. Such discussions
could be misconstrued as an agreement to boycott third-parties. For example, if a member
decides it will decline to pay certain types of billings from a customer, the member should not
discuss this decision with a competitor, because a common plan on such a subject could be
considered an unlawful conspiracy or boycott. Accordingly, ARIAS•U.S. members should
not discuss any proposal: to coordinate policies or practices in, billings or collections; to
prevent any person or business entity from gaining access to any market or customer; to
prevent any business entity from obtaining insurance or reinsurance services or legal or
consulting services freely in the market; or to influence the availability, terms, provisions,
premiums or other aspects of any reinsurance policy or line of insurance.

4. A written agenda shall be prepared in advance for every formal ARIAS•U.S. meeting. Where
practical, the agenda shall be reviewed in advance by counsel. The written agenda shall be followed throughout the
meeting. Where minutes are kept, the minutes of all meetings shall be reviewed by counsel (if possible) and, after
such review, shall be distributed to all members of the body holding the meeting. Approval of the minutes shall be
obtained after review at the next meeting.

5. Members are expected to observe the standards of conduct stated above in all informal discussions
that take place at the site of ARIAS•U.S. meetings, and in all communications concerning ARIAS•U.S. business.

6. If a member suspects that any unlawful agreements are being discussed, the member should leave the
discussion immediately and should consult counsel.

7. Questions concerning these Guidelines may be directed to the Chairman of the Law Committee of
ARIAS•U.S.

174
 ARIAS•U.S. 2017 Fall Conference

Conference Registration List

(as of October 16, 2017)
Marc Abrams Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. New York, NY
Steve Agosta XL Catlin Stamford, CT
Syed Ahmad Hunton & Williams Washington, DC
Walter Andrews Hunton & Williams Miami, FL
John Andrews Jr. Andrews Consulting Califon, NJ
Christopher Ash Robertson and Ash LLC Boulder, CO
Christopher Assise Sidley Austin LLP Chicago, IL
David Attisani Choate, Hall & Stewart LLP Boston, MA
Rod Attride-Stirling ASW Law Limited Hamilton, Bermuda
Jonathan Bank Locke Lord LLP Los Angeles, CA
Christopher Barnes Zurich North America Cherry Hill, NJ
Charley Barr CBarrADR Danbury, CT
Karen Baswell Chaffetz Lindsey LLP New York, NY
Paul Bates Bates Barristers Toronto, ON
Robert Bates BatesCarey LLP Glencoe, IL
Alan Bialeck Alan R. Bialeck LLC New York, NY
Adam Bialek Wollmuth Maher & Deutsch LLP New York, NY
Katherine Billingham KB ReSolutions, Inc. Charlotte, NC
Scott Birrell The Travelers Insurance Company, Inc. Hartford, CT
Hannah Ruehlman Blase Zurich North America Schaumburg, IL
Andrew Boris American Agricultural Insurance Company Schaumburg, IL
Bill Bouvier Riverstone Resources LLC Manchester, NH
David Bowers Arbitrator & Consultant Winnetka, IL
David Bradford Zurich North America Saint Charles, IL
Paul Braithwaite FTI Consulting, Inc. New York, NY
Jenna Buda Allstate Insurance Company Northbrook, IL
Rob Buechel Trisura International Sausalito, CA
Jeffrey Burman AIG - American International Group, Inc. New York, NY
Thomas Bush Freeborn & Peters LLP Chicago, IL
Cecil Bykerk CDBykerk Consulting Omaha, NE
Matthew Byrne XL Catlin Stamford, CT
Joe Carney JEC Consultants, Inc. Cranford, NJ
Michael Carolan Crowell & Moring LLP Washington, DC
Nina Caroselli Riverstone Resources LLC Manchester, NH
Greg Caruso Munich RE Princeton, NJ
John Cashin Law Office of John R. Cashin New York, NY
Lauren Cavanaugh FTI Consulting, Inc. New York, NY
Peter Chaffetz Chaffetz Lindsey LLP New York, NY
Suman Chakraborty Squire Patton Boggs (US) LLP New York, NY
Gil Chandler Arrowpoint Capital Corp Charlotte, NC
John Chaplin Compass Reinsurance Consulting, LLC Grantham , NH
Pierre Charles AMS Paris, France
Kathryn Christ Swiss Re Management (US) Corporation Armonk, NY
Mark Chudleigh Kennedys LLP Hamilton, Bermuda
Martin Cillick Allstate Insurance Company Northbrook, IL

176
 Expanding Our Reach: Exploring the Role of ARIAS in Non-Reinsurance Disputes

Conference Registration List

(as of October 16, 2017)
Beth Clark Stroock & Stroock & Lavan LLP New York, NY
Mitchell Cohen Wechsler & Cohen New York, NY
Royce Cohen Tressler LLP New York, NY
John Cole Wiley Rein LLP Baldwin, MD
Key Coleman Marcum LLP Philadelphia, PA
Tatiana Connolly W. R. Berkley Corporation Greenwich , CT
James Corcoran James P. Corcoran LLC New York, NY
Nick Cramb Mintz Levin Boston, MA
Glenn Cunningham Cunningham Advisory LLC Charlotte, NC
Thomas Cunningham Sidley Austin LLP Chicago, IL
Tim Curley Allianz Resolution Management Washington, DC
Everett Cygal Schiff Hardin LLP Chicago, IL
David D'Aloia Saiber LLC Florham Park, NJ
Thomas Daly Horseshoe Insurance Advisors US LLC Danbury, CT
Mary Ann D'Amato Mendes & Mount, LLP New York, NY
Paul Dassenko Azure Advisors, Inc. New York, NY
John DeLascio Hinshaw & Culbertson LLP Chicago, IL
Frank DeMento Transatlantic Reinsurance Co. New York, NY
Anthony Dempster Herbert Smith Freehills LLP London, London
Howard D. Denbin HDDRe Strategies LLC Bala Cynwyd, PA
Deidre Derrig Barrington, IL
Nick DiGiovanni Locke Lord LLP Chicago, IL
Rob DiUbaldo Carlton Fields New York, NY
Adam Doherty Prince, Lobel & Tye LLP Boston, MA
James Dolan Enstar US New York, NY
Michell Dolin Covington & Burling LLP Washington, DC
Joe Donley Clark Hill PLC Philadelphia, PA
John Dore Sheridan Ridge Advisers LLC Northfield, IL
Andrew Douglass Morrison Mahoney LLP Boston, MA
Peter Dunlop ASW Law Limited Hamilton, Bermuda
Jodi Ebersole Travelers Hartford, CT
David Edwards QC Queen's Counsel London, NA
Charles Ehrlich Arbitrator Menlo Park, CA
Randi Ellias Butler Rubin Saltarelli & Boyd LLP Chicago, IL
Bruce Engel Freeborn & Peters LLP Chicago, IL
Chuck Ernst XL Catlin New York, NY
Matthew Ferlazzo Hinshaw & Culbertson LLP New York, NY
Suzanne Fetter AIG - American International Group, Inc. Chester, CT
Will Fiske The Hartford Financial Services Group, Inc. Hartford, CT
Dan FitzMaurice Day Pitney LLP Hartford, CT
Mary Beth Forshaw Simpson Thacher & Bartlett LLP New York, NY
Tom Forsyth Partner Reinsurance Company of the U.S. Greenwich, CT
Justin Fortescue White and Williams LLP Philadelphia, PA
Charles Fortune Chubb East Haddam, CT
Christopher Foster HFW London, London

177
 ARIAS•U.S. 2017 Fall Conference

Conference Registration List

(as of October 16, 2017)
Patricia Taylor Fox AIG - American International Group, Inc. New York, NY
Ana Francisco Foley & Lardner LLP Boston, MA
Costas Frangeskides HFW London, UK
Glenn Frankel The Hartford Financial Services Group, Inc. Hartford, CT
Richard Franklin RC Franklin Consulting LLC Glenmoore , PA
Michael Frantz Munich RE Princeton, NJ
Donald Frechette Locke Lord LLP Hartford, CT
Dale Frediani RMG Consulting LLC Parsippany, NJ
Bruce Friedman Rubin, Fiorella & Friedman LLP New York, NY
Bryce Friedman Simpson Thacher & Bartlett LLP New York, NY
Cia Froelich Moss Chaffetz Lindsey LLP New York, NY
Alex Furth Resolute Management Inc. Boston, MA
Matt Furton Locke Lord LLP Chicago, IL
Anthony Gambardella Rivkin Radler Uniondale, NY
Ron Gass The Gass Company, Inc. Redding, CT
Peter Gentile Certified Arbitrator West Palm Beach, FL
Michelle George Norton Rose Fulbright London, UK
Andrea Giannetta Enstar US Basking Ridge, NJ
Andrew Gifford General Re Corporation Stamford, CT
Steven Gilford Proskauer Rose LLP Chicago, IL
James Gkonos Saul Ewing LLP Philadelphia, PA
Joe Goldberg Arbitrator Edina, MN
Sarah Gordon Steptoe & Johnson LLP Washington, DC
Kenneth Gorenberg Barnes & Thornburg LLP Chicago, IL
Perry Granof Granof International Group LLC Glencoe, IL
Elspeth Gray Argo Group Pembroke, Bermuda
Susan Grondine-Dauwer SEG-D Consulting, LLC Scituate, MA
Lloyd Gura Mound Cotton Wollan & Greengrass New York, NY
Mark Gurevitz MG Re Arbitrator and Mediator Services LLC Trumbull, CT
Bob Hall Hall Arbitrations Rockport, ME
Debra Hall Hall Arbitrations Rockport, ME
Daniel Hargraves Freeborn & Peters LLP New York, NY
Judy Harnadek Resolute Management Philadelphia, PA
Carl Harris Insurance Strategies Consulting, LLC West Des Moines, IA
Mitch Harris Day Pitney LLP Hartford, CT
Aimee Hoben The Hartford Hartford, CT
Gregory Hoffnagle Mintz Levin New York, NY
Kim Hogrefe Kim Dean Hogrefe, LLC Washington Township, NJ
Michael Holmes 7 King's Bench Walk London, UK
Paul Huck ADR Solutions New York, NY
Paul Hummer Saul Ewing Arnstein & Lehr LLP Philadelphia, PA
Joe Hynes XL Catlin Stamford , CT
David Ichel Dispute Resolution LLC New York , NY
Debbie Irving Riverstone Resources LLC Manchester, NH
Catherine Isely Butler Rubin Saltarelli & Boyd LLP Chicago, IL

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Conference Registration List

(as of October 16, 2017)
John Jacobus Steptoe & Johnson LLP Washington, DC
Ivan Jaffa RiverstoneResources LLC Manchester, NH
J.P. Jaillet Choate, Hall & Stewart LLP Boston, MA
Deirdre Johnson Crowell & Moring LLP Washington, DC
Paul Kalish Crowell & Moring LLP Washington, DC
Amy Kallal Mound Cotton Wollan & Greengrass New York, NY
Lydia Kam Lyew REnamics LLC San Diego, CA
Sylvia Kaminsky Sylvia Kaminsky Upper Montclair, NJ
Keith Kaplan Anselma Capital, LLC Chester Springs, PA
G. Kathleen Karnell Transatlantic Reinsurance Co. Stamford, CT
Jeffery Kayl Everest Reinsurance Company Liberty Corner, NJ
Sean Keely Freeborn & Peters LLP New York, NY
Lisa Keenan Odyssey Reinsurance Company Stamford, CT
Shawn Kelly Dentons US LLP Short Hills, NJ
Stephen Kennedy Clyde & Co US LLP Bronxville, NY
Mitchell King Prince, Lobel & Tye LLP Boston, MA
Tyler King Willis Re Dallas, TX
Kyley Knoerzer Clyde & Co US LLP New York, NY
Eric Kobrick AIG - American International Group, Inc. New York, NY
Marcelline Kochan Arrowpoint Capital Corp Charlotte, NC
Jeanne Kohler Carlton Fields Jorden Burt New York, NY
Robert Kole Choate, Hall & Stewart LLP Boston, MA
Mark Kreger Tressler LLP Chicago, IL
Michael Kuehn Riverstone Resources LLC Manchester, NH
Klaus Kunze Consulting Cincinnati, OH
Mike Kurtis Maiden Re Mt. Laurel, NJ
Cindy Lamar Self-employed Springfield, IL
Joy Langfod Norton Rose Fulbright US LLP Washington, DC
Nancy Braddock Laughlin Braddock & Associates Dallas, TX
Jim Leatzow Leatzow & Associates, Inc. Three Lakes, WI
Michael Ledley Wollmuth Maher & Deutsch LLP New York, NY
Y. John Lee CPCU Arbitrator Charlotte, NC
Jeffrey Leonard Budd Larner, P.C. Short Hills, NJ
James Liell SCOR Global Life Americas Charlotte, NC
Bill Littel Allstate Insurance Company Cary, IL
Joseph Loggia Buxbaum, Loggia & Associates Fullerton, CA
Denis Loring RGA Worldwide Reinsurance Company Palm Beach Gardens, FL
Peter Lovell Odyssey Reinsurance Company Stamford, CT
Christian Luthi Conyers Dill & Pearman Hamilton, Bermuda
Jim Macdonald JW Macdonald Associates LLC Philadelphia, PA
Susan Mack Adams and Reese LLP Jacksonville, FL
Maryanne Maier Chubb Philadelphia, PA
Scott Maier Penn National Insurance Harrisburg, PA
Richard Mancino Willkie Farr & Gallagher LLP New York, NY
Jane Mandigo Swiss Re Management (US) Corporation Overland Park, KS

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(as of October 16, 2017)
Andrew Maneval Chesham Consulting Harrisville , NH
Derek Manison Chubb Philadelphia , PA
Dominic Marinari Chubb Philadelphia, PA
Fred Marziano CIM Sea Girt, NJ
Ray Mastrangelo Mound Cotton Wollan & Greengrass New York, NY
Joe McCullough Freeborn & Peters LLP Chicago, IL
Patrick McDermott Hunton & Williams Washington, DC
Bill McGrath Smith Stratton LLP Princeton, NJ
John McKenna Finance & Risk Services, Ltd. Hamilton, BM
Edward McKinnon Claims Resource Management, Inc. Acton, CA
Peter McNamara Rivkin Radler Uniondale, NY
Brendan McQuiggan Brandywine Group of Insurance and Reinsurance Companies Philadelphia, PA
Adrian Mecz Norton Rose Fulbright LLP London, UK
Kyle Medley Hinshaw & Culbertson LLP New York, NY
Jim Meehan Arrowpoint Capital Corp Nantucket, MA
Mark Megaw Earlysville, VA
Michael Menapace Wiggin and Dana LLP Hartford, CT
Mike Merlo AON Chicago, IL
Samantha Miller Norton Rose Fulbright LLP Washington , DC
Seema Misra AIG New York, NY
Roger Moak Roger Moak New York, NY
Crystal Monahan Rubin, Fiorella & Friedman LLP New York, NY
Tim Morris Hanover Stone Solutions Charleston, SC
Sanjoy Mukherjee Everest Reinsurance Company Liberty Corner, NJ
Mike Mullins Day Pitney LLP Boston, MA
Melissa Mulloy Larson - King, LLP St. Paul, MN
Andrew Nadolna JAMS New York, NY
Diane Nergaard Eriksen Enterprise, LLC Stamford, CT
Kelly Nickerson FTI Consulting New York, NY
Neal Novak Novak Law Offices Chicago, IL
Ann O'Connor White General Reinsurance Corporation Stamford, CT
Thomas O'Kane Munich RE Princeton, NJ
Michael Olsan White and Williams LLP Philadelphia, PA
Connie O'Mara O'Mara Consulting, LLC Haddonfield, NJ
Bill O'Neill Crowell & Moring LLP Washington, DC
Elliot Orol Church Pension Group New Y ork, NY
Scott Ostericher Vocke Law Group LLP Chicago, IL
Jason Otto Swiss Re Armonk, NY
Steve Parisi R&Q USA Philadelphia, PA
Jane Parker W. R. Berkley Corporation Greenwich, CT
John Parker Silvercreek Reinsurance Arbitration Services Riverside , IL
George Pavarini Riverstone Resources LLC Manchester, NH
Joel Pelz Jenner & Block LLP Chicago, IL
Kate Perlman Berkley Re America Stamford, CT
Tom Perry Hutt & Shimanowitz, P.C. Woodbridge, NJ

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Conference Registration List

(as of October 16, 2017)
David Pi Schiff Hardin LLP Chicago, IL
Kim Piersol Huggins Actuarial Services, Inc. Media, PA
Joe Pingatore St. Paul, MN
Lawrence Pollack JAMS New York, NY
Andrew Poplinger Chaffetz Lindsey LLP New York, NY
Ray Prosser Arbitrator Waxhaw, NC
Vinnie Proto Budd Larner, P.C. Short Hills, NJ
Leah Quadrino Steptoe & Johnson LLP Washington, DC
Anne Quinn Berkley Custom Stamford, CT
Richard Ranieri Weber Gallagher Bedminster, NJ
Erik Rasmussen Rasmussen Advisory Services Shoreview, MN
Robert Redpath Enstar US New York, NY
Richard Regan Broderick, Stirn & Regan Washington, DC
David Reston Herbert Smith Freehills LLP London, UK
Krystal Riebesell Saiber LLC Florham Park, NJ
Randy Rinicella HCC Insurance Holdings, Inc. Houston, TX
Debra Roberts Debra Roberts & Associates, Inc. New York, NY
John Rodewald BatesCarey LLP La Grange Park, IL
Peter Rogan Ince & Co. LLP London, Uni
Steve Rogers Stephen M Rogers, LLC Bloomfield, CT
Eve Rosen Attorney Cincinnati, OH
Jonathan Rosen Arbitration, Mediation and Expert Witness Services New York, NY
Peter Rosen Latham & Watkins LLP Los Angeles, CA
Linsey Routledge Clyde & Co US LLP New York, NY
Melanie Rouvray-Kampe Hannover Re Hanover, Lower Saxony, DE
Jeff Rubin Odyssey Reinsurance Company Stamford, CT
Jim Rubin Butler Rubin Saltarelli & Boyd LLP Chicago, IL
Daryn Rush White and Williams LLP Philadelphia, PA
Christine Russell Brandywine Group of Insurance & Reinsurance Companies Philadelphia, PA
Jonathan Sacher Berwin Leighton Paisner London, UK
Stephanie Sado Chaffetz Lindsey LLP New York, NY
Robin Saul XL Bermuda Hamilton, Bermuda
Joseph Schiavone Budd Larner, P.C. Short Hills, NJ
Larry Schiffer Squire Patton Boggs (US) LLP New York, NY
Dan Schmidt, IV Dispute Resolution Services Int'l. Scottsdale, AZ
Joan Schwab Saiber LLC Florham Park, NJ
Stephen Schwab DLA Piper LLP (US) Chicago, IL
Josh Schwartz Chubb Philadelphia, PA
Stacey Schwartz Swiss Re Management (US) Corporation Armonk, NY
Steve Schwartz Chaffetz Lindsey LLP New York, NY
Charlie Scibetta Jr. Chaffetz Lindsey LLP New York, NY
Thomas Segalla Goldberg Segalla LLP Buffalo, NY
Sylvia Semerdjian Everest Reinsurance Company West Orange, NJ
Wendy Shapss FTI Consulting, Inc. New York, NY

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Conference Registration List

(as of October 16, 2017)

Dan Sheehan Everest Reinsurance Company Liberty Corner, NJ

Regan Shulman Arch Insurance Group Inc. Jersey City, NJ
Dick Shusterman Shusterman Arbitration & Mediation Services Berwyn, PA
Alex Simkin Kasowitz Benson Torres LLP New York, NY
William Sneed Sidley Austin LLP Chicago, IL
Teresa Snider Butler Rubin Saltarelli & Boyd LLP Chicago, IL
Kiran Soar INCE & Co. LLP London, UK
Bill Sofsky W. A. Sofsky Consulting and Advisory Services, LLC Charlotte, NC
Eileen Sorabella Arch Capital Services Inc. Morristown, NJ
David Spector Schiff Hardin LLP Chicago, IL
Timothy Stalker Weber Gallagher Philadelphia, PA
Jeremy Starr Jeremy Starr Consulting, LLC New York, NY
Aaron Stern Stern A. B. Inc. Briarcliff Manor, NY
Tom Stillman Tom Stillman Arbitrations Chicago, IL
James Stirn Broderick, Stirn & Regan Washington, DC
John Sullivan Mass Re Advisors Brewster, MA
Peter Suranyi LZG Insurance Consulting Port Chester, NY
Bob Sweeney CNA Insurance Chicago, IL
Akos Swierkiewicz IRCOS, LLC Morrisville, PA
David Thirkill The Thirkill Group, Inc. Bedford , NH
Mike Thompson Wiggin and Dana LLP Stamford, CT
Kevin Tierney Kevin J. Tierney, Esq. Sarasota, FL
John Tiller Butterfly Financial Punta Gorda, FL
TOM Tobin Law Office of T.M.Tobin Mystic, CT
Robert Tomilson Clark Hill Philadelphia, PA
Kim Trimble RSUI Group Atlanta, GA
Jack Vales Dentons US LLP New Jersey , NJ
Matthew Vinciguerra Arch Insurance Group Jersey City, NJ
Damon Vocke Vocke Law Group LLP Chicago, IL
Jerry Wallis Wallis Resolutions Basking Ridge, NJ
Andy Walsh Legion Insurance Company (In Liquidation) Philadelphia, PA
Mike Walsh Michael Walsh ADR New York, NY
Tom Wamser Chubb Philadelphia, PA
Ciaran Way White and Williams LLP Philadelphia, PA
Richard White Integrity Insurance Company Cedar Knolls, NJ
Rob Whitney Neighborhood Health Plan Boston, MA
Kay Wilde Allstate Insurance Company Northbrook , IL
Michael Wilder West Hartford, CT
Larry Zelle L Zelle LLC Minneapolis, MN
Paul Zevnik Morgan, Lewis & Bockius LLP Washington, DC
Edward Zulkey Baker & McKenzie Chicago, IL
Tom Zurek Zurek OneAmerica Financial Partners Indianapolis, IN

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5th Floor
G ROOMS
ON BALCONY REGISTRATION
CE
TE
BREAKFAST
GENERAL SESSIONS
BREAKOUT SESSIONS
COMMITTEE MEETINGS

8th Floor
LUNCHEON
COCKTAIL RECEPTION

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 ARIAS•U.S. 2017 Fall Conference

AIDA Reinsurance & Insurance Arbitration Society

7918 Jones Branch Dr., Suite 300 ○ McLean, VA 22102
Phone: 703-506-3260 ○ Fax: 703-506-3266
Email: info@arias-us.org

BOARD OF DIRECTORS
CHAIRMAN Scott Birrell CHAIRMAN EMERITUS
James I. Rubin Travelers T. Richard Kennedy
Butler Rubin Saltarelli & Boyd LLP 1 Tower Square, 4 MS
321 North Clark Street, Suite 400 DIRECTORS EMERITI
Hartford, CT 06183
Chicago, IL 60654 Charles M. Foss
860-277-5391
312-696-4443
sbirrell@travelers.com Mark S. Gurevitz
jrubin@butlerrubin.com
Charles W. Havens, III
Deidre Derrig Ronald A. Jacks*
PRESIDENT
Allstate Insurance Company
Ann L. Field Susan E. Mack
Field Law and Arbitrations 2775 Sanders Road, Suite A2E
Robert M. Mangino
523 S. Cook Street Northbrook, IL 60062
Edmond F. Rondepierre*
Barrington, IL 60010 847-402-9013
847-207-9318 dderrig@allstate.com Daniel E. Schmidt, IV
Ann3372@gmail.com *deceased
Michael A. Frantz
VICE PRESIDENT Munich Re America
Brian Snover 555 College Road East
Berkshire Hathaway Group Princeton, NJ 08543
100 First Stamford Place 609-243-4443
Stamford, CT 06902
mfrantz@munichreamerica.com
203-363-5200
bsnover@berkre.com
Sylvia Kaminsky
405 Park Street ADMINISTRATION
VICE PRESIDENT
Deirdre G. Johnson Upper Montclair, NJ 07043
Crowell & Moring LLP 973-202-8897 Sara Meier
1001 Pennsylvania Avenue, NW syl193@aol.com Executive Director
Washington, DC 20004 7918 Jones Branch Dr., Suite 300
202-624-2980 Elizabeth A. Mullins McLean, VA 22102
djohnson@crowell.com Swiss Re Management (U.S.) Corporation 703-574-4087
175 King Street smeier@arias-us.org
TREASURER Armonk, NY 10504
Peter A. Gentile 914-828-8760
7976 Cranes Pointe Way Elizabeth_mullins@swissre.com
West Palm Beach, FL 33412
203-246-6091 John M. Nonna
pagentile@optonline.net Squire Patton Boggs (U.S.) LLP
30 Rockefeller Plaza, 23rd Floor
New York, NY 10112
646-557-5172
john.nonna@squirepb.com

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