Tort liability and reinsurance contracts

Abstract

Many reinsurers resist paying mass tort and environmental claims. One of their key arguments is to urge that developments in American tort law took them (and everyone else) by surprise and hence that it is unfair for them to pay. This argument is wrong for three reasons. First, the common law develops and changes. Everyone knows that this change is a risk that (reinsurers assume. Second, the rise of enterprise and strict liability in the United States was a well‐foreshadowed, forecastable trend. Third, if a reinsurer did not see (or, atleast, sense) this development coming, then it received obtuse legal advice. This article focuses on the second of these three reasons.