Richard Harrison successful in Commercial Court claim regarding basis of reinsurance broker’s entitlement to commission.

Richard Harrison defended Mr Robert S Baillie, the former managing director of a Lloyd’s reinsurance broker, against allegations of negligence [ARB International Limited v Robert S Baillie [2013] EWHC 2060 (Comm)].  Mr Baillie was alleged to have agreed disadvantageous terms governing the payment of commission following a series of mid-term broker changes affecting business placed by the broker. The business included binding authorities, quota share reinsurance treaties and covers written on a declaration basis. The broker was seeking over £1 million which it alleged had been lost as a result of the terms agreed by Mr Baillie.

The broker’s claims were rejected in the Commercial Court. The Judge found that (subject to contrary agreement) a broker’s entitlement to commission arises when business is written under a binding authority, ceded to a quota share treaty or declared under a declaration-based cover. The Judge rejected the broker’s argument that its entitlement to commission arose on placement of a binding authority, quota share treaty or declaration based cover. The Judge found no shortfall in the care, skill and diligence exercised by Mr Baillie in agreeing terms following the mid-term broker changes.

Richard Harrison was instructed by Hextalls

The judgment may be viewed here.

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