Reinsurance Trials Set Back by Pandemic

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One year into the pandemic I thought it might be a good time to reflect on how the shutdowns have affected reinsurance trials. What, you say? A reinsurance trial? Aren’t they all arbitrated? Well, yes, most are, but not every reinsurance contract has an arbitration clause and, moreover, not every case brought against a reinsurer is a breach of contract case.

In Vantage Commodities Financial Services I, LLC v. Assured Risk Transfer PCC, LLC, No. 1:17-cv-01451 (D. D.C. Feb. 18, 2021), a policyholder under a credit insurance policy sued its insurer and its reinsurers and brokers for breach of contract, etc. The district court dismissed the breach of contract claims against the reinsurers for lack of contractual privity, but allowed the policyholder to amend its complaint to assert various tort claims against the reinsurers and brokers (the insurer had settled out). While privity would still be a hurdle for the policyholder, the court found that the amended pleadings were sufficient to move forward.

Just recently, the policyholder asked the court to put the case on the trial calendar (it’s and 2017 case after all). In a minute order, here’s how the court responded:

The Court’s trial schedule this spring remains uncertain given the ongoing COVID-19 pandemic and the need to prioritize criminal trials in accordance with the Chief Judge’s Standing Order 20-93.

Accordingly, the unopposed motion to set a trial date was denied.

This issue is repeating itself across the country in both state and federal courts. Cases ready for trial have been postponed and, as you can see, federal courts are unable to schedule the civil cases ready for trial because the criminal cases take priority under the Constitution. This issue, obviously, is not just about reinsurance trials, but all civil trials. Some courts have been moving forward virtually, but many have not scheduled trials. The pent up trial docket will explode soon, as courts reopen safely and as we call get vaccinated. Then, this reinsurance trial will go forward (unless the parties get smart and mediate the case and settle).

Published by Larry P. Schiffer, Schiffer Law & Consulting PLLC

After 38-years with boutique and global law firms, Larry P. Schiffer launched an independent legal and consulting practice, Schiffer Law & Consulting PLLC, where he provides services as a lawyer, counselor, consultant, mediator, arbitrator and expert witness. He practices commercial, insurance, and reinsurance litigation, arbitration, and mediation. He provides advice on a wide variety of insurance and reinsurance issues, including claims and disputes, policy wording analysis and drafting, insurance insolvency issues, due diligence for transactions and have insurance or reinsurance components, insurance and reinsurance education and other advice. He is available to appear for clients outside of NY at mediations and conferences as needed on a per diem basis. He is active in legal and trade associations where he has held various leadership positions. He has lectured and has been widely published on reinsurance and other insurance topics. He serves as an Expert Commentator on reinsurance for IRMI.com and co-authored the chapter on reinsurance in the New York State Bar Association’s Insurance Law Practice treatise. He is the editor of the ARIAS•U.S. Quarterly. Mr. Schiffer received his J.D. from Albany Law School, where he graduated cum laude, was a member of the Albany Law Review and a member of the Justinian Society, and received his B.A. magna cum laude from Brooklyn College of the City University of New York. He was admitted to practice in New York in 1980.

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