December 20, 2012 Articles

The Brussels I Regulation's Rules on Choice of Court Clauses

Given that application or consideration of the Brussels I Regulation could lead to results different from those under U.S. law, it is prudent for U.S. insurance practitioners, particularly those that deal with policies issued out of Europe, to at least be aware of the regulation and its rules concerning choice of court agreements in insurance policies

by Jeffrey A. Kiburtz

Judging by the number of reported insurance cases in the United States addressing the Brussels I Regulation, it might be reasonable to conclude that the regulation is of marginal importance to U.S. insurance lawyers. I am aware of two cases involving insurance coverage in which a U.S. court has addressed the Brussels I Regulation: Baxter International Inc. v. AXA Versicherung AG, No. 11 C 9131 (N.D. Ill. Nov. 7, 2012) and TH Agriculture & Nutrition, L.L.C. v. Ace European Group Ltd., 416 F.Supp.2d 1054 (D. Kan. 2006).

Across the pond, however, the view is naturally quite different, as the Brussels I Regulation represents the applicable law governing jurisdiction in most international insurance disputes brought in the courts of the 27 countries that currently comprise the European Union. Further, while it might be reasonable to think that a European procedural law can have no application or effect in U.S. courts, there is support in more than one U.S. jurisdiction for the notion that foreign law, like the Brussels I Regulation, might be important or dispositive of whether a forum selection clause—or, more precisely, a choice of court clause in an insurance policy—requires dismissal of U.S. litigation, even if that clause would be considered permissive under established U.S. law. Or, conversely, to the extent that the Brussels I Regulation is found to have application or effect in a particular dispute, it could render invalid and unenforceable a choice of court clause that would be considered mandatory under U.S. law.

Given that application or consideration of the Brussels I Regulation could lead to results different from those under U.S. law, it would appear prudent for U.S. insurance practitioners, particularly those that deal with policies issued out of Europe, to at least be aware of the Brussels I Regulation and its rules concerning choice of court agreements in insurance policies.

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