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strengthening of the existing rules rather than a total overhaul. Concerns are already being raised within the industry that increased levels of scrutiny and monitoring will lead to delays in bringing new medical devices to the marketplace. It is essential to maintain the economic and commercial viability of products. Too much regulation can delay life-saving products coming to market and undermine research and development. The European Commission has acknowledged that the medical device and in vitro diagnostic medical devices sectors – which employ more than 500,000 people in about 25,000 companies – are key drivers when it comes to European economic growth. This is especially important given that 80 percent of European medical device manufacturers are small to medium-sized companies (SMEs) The changes are designed to promote innovation by not overburdening manufacturers with complex and unworkable rules. What happens next? The new proposals will be considered by the EU parliament and the European Council. At present, the target date for the legislation to be adopted is 2014, with the new regulations being brought into effect on a staged basis of possibly up to five years. Michael Goldberg Solicitor London m.goldberg@kennedys-law.com 8
A useful purpose English judges have recently had important things to say about jurisdiction and choice of law. When deciding whether it has jurisdiction to hear a dispute already subject to foreign proceedings, a key test for an English court is whether the English case would serve a useful purpose. In the recent case of Faraday Reinsurance Co Ltd v Howden North America Inc [2011] EWHC 2837 (Comm), Howden – the insured – argued that an order by the English High Court allowing Faraday – an excess insurer – to serve notice of proceedings out of the jurisdiction should be set aside. In those proceedings, Faraday was seeking a declaration that the key insurance contract between itself and Howden (which was already facing substantial insurance-related claims in Pennsylvania) was governed by English law and jurisdiction. In effect, Faraday wanted a declaration that it was not liable (or possibly only had very limited liability) for the Pennsylvanian claims. Since 1999, claims had been brought against Howden in the US, alleging personal injuries caused by exposure to asbestos. In front of the Court of Appeal, Howden argued that the English proceedings served no useful purpose and therefore should be set aside. The court, however, concluded that the first instance judge, Mr Justice Beatson, had clearly been aware of the need to show useful purpose, and (in the words of Lord Justice Longmore) “the court should be slow to interfere” with the judge’s exercise of discretion on this issue. Consequently, Howden’s appeal failed. Following the August 2010 notification, Faraday realised that it had to protect itself, especially as regards the 1998 policy which was silent on the issues of law and jurisdiction. Background Howden is an international engineering group. It had various primary and excess product liability policies that had mainly been written in the US by US insurers. These included three excess layer policies originally written by General Star International Indemnity Ltd and transferred to Faraday in November 2010. The three policies provided consecutive cover from 1998 to 2001. The second and third policies had English law and jurisdiction clauses but the 1998 policy was silent on these two key points. Since 1999, claims had been brought against Howden in the US, alleging personal injuries caused by exposure to asbestos. Howden started coverage proceedings against excess insurers (but not Faraday) in Pennsylvania in 2009. However, in August 2010, the engineering group gave precautionary notice to higher-level excess insurers, including Faraday. Four months later, Faraday issued proceedings in England, seeking a declaration that the three policies were governed by English law. In March 2011, it was given permission to serve the claim form outside the jurisdiction. In April 2011, Howden wrote to Faraday promising not to make a claim under the second and third excess policies. The English proceedings were served on the engineering group two months later. Howden then joined Faraday to the further coverage proceedings it had started in Pennsylvania in 2011, and applied to set aside the English court order allowing service outside the jurisdiction. Faraday’s position Following the August 2010 notification, Faraday realised that it had to protect itself, especially as regards the 1998 policy which was silent on the issues of law and jurisdiction. This was because Pennsylvanian and English courts take very different approaches to asbestos-related claims: • Under English law, exposure to hazardous substances is not in itself an injury. US courts, though, apply the theory of multiple triggers, under which all policies in force (from the initial exposure through to the manifestation of the injury) respond to the claim. • Under English law, the period of insurance is a fundamental provision of the policy as liability is limited to that period. The position is different under Pennsylvanian law. …the fact that an English court’s decision might be disregarded by a judge in Pennsylvania did not rob such proceedings of their useful purpose. Challenging the original order Howden tried to set aside the original order allowing Faraday to serve notice of the proceedings outside the jurisdiction by arguing two things: (1) The proceedings did not serve a useful purpose as Howden had already given an undertaking not to make a claim under the second and third policies and an English court’s judgment on the 1998 policy would not stop a Pennsylvanian court from reaching its own decision. 9
Page 1 and 2: The Key Winter 2012 Arbitrating in
Page 3 and 4: Managing risk in Denmark A look at
Page 5 and 6: Why D&O insurance matters Two recen
Page 7: Taking a consistent approach The EU
Page 11 and 12: Developments for the Dubai & Hong K

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