REINSURANCE: number of experienced professional falling


Solicitors should be allowed to act as arbitrators in reinsurance cases to alleviate the serious shortage of market arbitrators, a City litigator said this week.



The call came as national firm Addleshaw Goddard launched a campaign to increase the number of quality reinsurance arbitrators, which will include a free training programme for those involved in the industry.

Solicitors warned that there is a decreasing pool of arbitrators with enough experience to act in reinsurance proceedings, which is already leading to higher costs and greater delay. If the number of reinsurance arbitrations goes up - as seems ?likely - the problem will become even more serious, they said.





Nicholas Munday, head of litigation at magic circle firm Clifford Chance, told the Gazette the problem could be reduced if reinsurance solicitors were able to act as arbitrators. However, most arbitration clauses specify that the arbitrator must be drawn from the underwriting industry itself, which excludes legal practitioners.



He said: 'In the US there are thousands of reinsurance arbitrators, which is too many, but in the UK there are only about 40 individuals.... It would be helped by there being more legal practitioners who are very experienced in reinsurance being prepared to accept appointments as arbitrators. Lawyers would be very good on issues such as the construction of the terms of the contract. But many arbitration clauses provide for the arbitrator to be drawn from industry.'



Simon Twigden, head of the contentious division at Addleshaw Goddard, said: 'There is a genuine lack of choice and availability [of arbitrators] which is leading to potential conflicts of interest and delay. The situation will only get worse and delays inevitably mean extra cost.'



The current pool of arbitrators comprises many former Lloyds underwriters who retired in the 1990s, making it difficult to find professionals with more recent experience.



Addleshaw Goddards's reinsurance arbitration training course will provide practical help for active or retired industry professionals with an interest in becoming market arbitrators.



Rachel Rothwell