Are the courts adept at handling complex commercial claims?
Insurance & Reinsurance
There are no special courts for resolving commercial insurance disputes. Commercial insurance disputes are generally resolved in district courts or summary courts depending on the value of the dispute. In general, Japanese courts are adept at handling commercial claims even they are complex.
The Australian courts have well-developed case management processes for handling complex commercial claims in an efficient and expeditious manner, including those arising from insurance and reinsurance disputes in Australia.
In 2016, the Federal Court of Australia established an Insurance List within the commercial and corporations national practice area for short matters which concern policy interpretation or questions of law regarding the operation of insurance legislation.
Disputes adjudicated before the Danish Courts do to a significant extent include complex commercial claims. Consequently, the courts are generally adept at handling complex commercial claims, which is particularly true for the Maritime and Commercial Court, The High Courts and the Supreme Court.
The courts in Poland are generally well-equipped to handle complex commercial disputes, although this much depends on the individual profile of the judge and the case management technique he/she decides to adopt.
The parties involved should bear in mind that:
- all evidence should be filed together with the statement of claim/statement of defence; the judge may be unwilling to accept evidence filed at a later stage of the proceedings (unless it was not possible or necessary to file it earlier);
- there are no written witness statements - witnesses must testify orally;
- typically hearings are split into several sessions at intervals ranging from a few to several months;
- there are separate court divisions for commercial disputes; and
- in order to rule on any technical or non-legal aspects of a dispute, judges typically appoint an independent expert or experts.
It is not positively confirm that Turkish courts adept at handling complex disputes. Generally, the courts appoint experts and rely on their opinions. This makes the litigation process slower as one expert opinion generally does not seem to be satisfactory.
Yes. In Ireland, the jurisdiction in which court proceedings are brought depends on the monetary value of the claim. Claims with a monetary value in excess of €75,000 are heard by the High Court which has an unlimited monetary jurisdiction.
The High Court has a specialist court, the Commercial Court, which deals exclusively with commercial disputes. Proceedings are case-managed and tend to move at a much quicker pace than general High Court cases, time from entry into the list to full hearing varies between 1 week to 4 months depending on the time required for hearing. Entry to the list is at the discretion of the judge and may be refused if there has been any delay. Insurance and reinsurance disputes can be heard in the Commercial Court if:
- The value of the claim or counterclaim exceeds €1,000,000; and
- The court considers that the dispute is inherently commercial in nature.
The Commercial Court judges place a strong emphasis on mediation and the Commercial Court Rules provide for up to a four-week stay of proceedings to allow the parties to consider mediation.
The commercial court in the High Court of Justice has a long history of dealing with complex insurance claims; the experience and quality of the judiciary that will hear international insurance claims is unrivalled. The English judiciary are widely regarded as impartial and expert in commercial disputes – frequently dealing with international parties. The extensive guidance provided by judicial precedent provides parties with a degree of certainty as to the outcome of commercial disputes.
The courts are, generally speaking, adept at handling complex commercial claims. However, the bigger city courts are, quite naturally due to the larger volume of cases being decided and thereby the increased experience gained by the courts, better suited at handling larger complex commercial claims.
In broad terms, there are four courts in which civil disputes of a commercial nature may be heard. These are: the Local Courts (Amtsgerichte); the Regional Courts (Landgerichte); the Higher Regional Courts (Oberlandesgerichte) and the Federal Court of Justice (Bundesgerichtshof).
Each Regional Court in Germany also operates a Specialist Commercial Chamber. The Commercial Chambers allow for the appointment of lay judges alongside the presiding judge. These lay justices are not lawyers, but experienced merchants. For a case to be heard in the Commercial Chamber, the plaintiff must make a motion requesting this in his Statement of Claim. The defendant may also make such a motion later on and apply for the transfer of the action from the “ordinary” civil court to a Commercial Chamber.
Further, some Regional Courts (usually those situated in larger cities) have the option of setting up additional specialist chambers, which hear cases that may benefit from specific judicial expertise such as, for example, construction, banking, insurance or professional liability disputes of lawyers, tax advisors and certified public accountants.
German judges decide independently and irrespective of the parties’ backgrounds. Corruption of judges is unknown. Judges have a thorough legal education and a high standard of professionalism. Most cases are decided in a timely and cost efficient manner and only very complex cases may result in lengthy litigation proceedings.
Generally, Norwegian courts are considered adept at handling complex commercial claims. This may however vary based on geography and other factors. Most complex commercial disputes are handled by the district courts in Oslo, Bergen and Stavanger, which are all highly reputed courts. Choice of venue clauses are usually included in larger commercial contracts, entailing that a vast majority of such disputes are handled by the most reputable district courts (except the disputes which are handled through arbitration).
The parties are free to choose between arbitration or civil court proceedings, save of course that both parties must agree on arbitration (either when entering into the insurance agreement or after the insurance event took place). Arbitration clauses are frequently found in insurance of large risks (including marine insurance) and reinsurance. Arbitration clauses are not binding for consumer policyholders unless the arbitration clause itself is agreed after the insurance event took place.
Insurance and reinsurance disputes are regulated by the Code of Commerce. If one of the parties breaches a contract, the non-defaulting party can initiate ordinary commercial proceedings before federal or local courts. This judicial process has four basic stages: (i) the filing of the claim by the plaintiff and response from the defendant; (ii) the submission and presentation of evidence of any kind; (iii) the pleadings; and (iv) an award.
The parties can appeal any ruling to a higher tribunal, unless the aggregate amount is less than approximately $600,000 pesos.
Each party pays its own litigation costs and the losing party might be required to indemnify the winning party, including for attorneys’ fees, subject to certain established thresholds and the decision of the court.
As a general rule, federal courts are prepared to handle complex commercial claims; however, they lack experience in handling insurance and reinsurance cases. In the case of local courts, there is uncertainty on whether a local judge will have the resources and ability to handle complex commercial cases.
While this is a matter of some relative analysis, the UAE Courts are arguably not a favorable venue for the adjudication of complex commercial disputes. The Court procedures, relying on a civil law model, are conducted in Arabic, rely on mostly written submissions and referral to court appointed experts for analysis, and do not generally provide for disclosure or witness examination. Should the dispute at bar involve extensive non-Arabic language documents of a technical nature, a need for live witness testimony and rights to cross-examination, or any probing of the adversary’s records, the downside of the UAE court procedures is evident.
The DIFC has established its own Court, with rules modeled after those of England and Wales. To the extent that the DIFC Court permits a higher level of disclosure and live witness testimony, it can be said to present a more favorable venue, particularly if the dispute is based upon English language documents. However, the DIFC Court has only been in operation since the mid 2000’s, and thus may suffer from a lack of an extended track record.
Insurance coverage lawsuits may be brought in state or federal courts in the U.S. Federal courts, however, may preside over insurance disputes only in certain circumstances, including, for instance, where the amount in controversy is $75,000 or more and there is a complete diversity of citizenship between the parties to the lawsuit. Courts’ knowledge and experience in handling insurance coverage disputes varies by state and locality within a state. Courts in states with larger commercial centers, such as New York, California, and Illinois typically have numerous insurance coverage disputes pending on their dockets.
Some states have established courts to handle complex commercial cases, including insurance coverage cases that exceed various minimum amounts in dispute. The period of time it takes for coverage cases to be resolved depends on the jurisdiction in which a case is brought as well as the type and number of issues and parties involved. The length of time may also depend upon the individual judge assigned to preside over the case.
Austria has a very well-functioning and reliable judiciary and the courts are adept at dealing with complex factual and legal matters. The average length of court proceedings is reasonable and the quality of decisions is usually high.
In first instance, claims will either be handled by the district courts or the regional courts, depending on the amount in dispute. Whereas claims for less than EUR 15,000 are, as a general rule, dealt with by the district courts, claims above that threshold are dealt with by regional courts. Appeals are made either to higher regional courts, when appealing a judgment issued by the regional courts, or to the regional courts, when appealing a judgment issued by the district courts. The third and final instance is the Austrian Supreme Court.
In addition, Austria has specialised commercial courts. These commercial courts are particularly fit to handle complex commercial claims and inter alia competent to hear (re-)insurance disputes.
Insurance matters are generally subject to arbitration, which is regarded as more appropriate for complex insurance litigation.
If the dispute is for an amount lower than UF 20,000 (approximately USD 453,000) the insured party may choose to litigate in courts.
Commonly appeals are heard by the Appellate Court (unless the parties have renounced to appeal or have designated an arbitral court to hear the appeal). Superior courts, such as the appellate courts and particularly the Supreme Court, have a high level of legal analysis although they are not adept in reviewing complex matters, particularly if they have been heard by an arbitrator in the first instance.
The Swiss court system is both experienced and adept at handling even complex commercial claims.
The courts in Peru are in a process of innovation that includes the training of all its agents. In this sense, we consider that the courts in Peru will obtain greater specialization as long as this process continues.
Notwithstanding the foregoing, in Peru there are alternative mechanisms for conflict resolution that allow the settlement of complex commercial claims to be made by agents outside the local courts. For example, arbitration. Arbitration is highly developed in our jurisdiction and its level of sophistication allows submitting complex controversies to the decision of a specialized Arbitral Tribunal.
Indian litigation is slow and time consuming. This is attributed to the number of reported pending cases in courts across in India, which is presently close to 31 million. In fact, the Supreme Court and Parliament have begun the process of clearing this huge backlog. The Supreme Court has issued directions to all courts across India to conclude trials within 5 years as a starting point.
In addition, the Commercial Courts, Commercial Division & Commercial Appellate Division of High Courts Act 2015 (‘Commercial Courts Act’), has been introduced which carves out special benches in all existing civil courts which will adjudicate commercial matters exclusively. There are fixed schedules that all commercial civil disputes need to follow and the legislation is meant to speed up the adjudication process. The Commercial Courts have jurisdiction over disputes having a value of circa US$153,400. There is a proposal to reduce this figure to circa US$4,600. Commercial Courts hear complex matters including insurance and reinsurance disputes on a routine basis.
The government has, in recent times, proposed an amendment to the Commercial Courts Act which provides for constitution of commercial courts at the District level and Commercial Appellate Division at the District level to hear appeals from disputes decided by commercial courts below the District level. This mechanism is proposed to ensure that complex commercial claims of a low pecuniary value can be heard and expeditiously decided at the District level itself.
The Civil Courts have a three-tier hierarchy. The hierarchy structure of the Courts is usually as follows (in ascending order): District, State, and National which comprises circa 600 District Courts, 24 High Courts and the Supreme Court of India (the highest court in India). Among the 24 High Courts, four are termed charter High Courts (i.e. Delhi, Bombay, Madras and Calcutta High Court) which have original jurisdiction to accept and hear matters which fall above certain pecuniary thresholds, exempting the District Courts from hearing these matters due to higher pecuniary limits. The rest of the District Courts have unlimited pecuniary jurisdiction, so do the competent courts of first instance to hear any insurance dispute falling under the territorial jurisdiction.
Singapore Courts have substantial expertise handling and managing complex international commercial claims. The Supreme Court of Singapore also include an International Commercial Court division which offers litigants the option of having their disputes adjudicated by specialist commercial from Singapore and international judges from both civil law and common law jurisdictions.
Courts have improved in recent years regarding the interpretation of complex insurance contract. Some major disputes occur today and the referral given by the Judiciary has been quite technical and adequate. The Superior Court of Justice ever more defines precedents in its most varied areas of insurance law. An important example is the recent Court ruling on D&O insurance, published on February 14th, 2017, which deals with the policyholder's obligation to declare risk, also denying insurance coverage in case of intentional action by the insured (Special Appeal 1.601.555/SP). It is important to note that several relevant judicial and arbitration cases will be litigated in 2017, mainly in the D&O, engineering and surety areas.
Moreover, commercial insurance disputes are decided by the court of the insured’s domicile. Small claims courts are available for matters involving up to 40 times the minimum wage (i.e. up to approximately £10,000).
Regarding the procedural timeline, in the State Court of São Paulo, for example, a case takes on average a total of 3.3 years to be judged by a civil court and a court of appeal. If the case then goes to the Superior Court of Justice or to the Federal Supreme Court, this timeframe can increase by another 1.1 years. In the State Court of São Paulo there are 25,366,780 cases – commercial and others – pending before 2,607 judges, which gives a ratio of one judge to 9,730 cases. One of the main initiatives of the new Brazilian Civil Procedure Code, enacted on 2015, was to speed up the trial timeline with the introduction of a more flexible system whereby the parties are allowed to enter into procedural agreements to define the number of submissions/pleadings, the deadlines and the type of evidence to be produced.
The courts frequently handle complex commercial claims.
The answer to this question is mainly negative. This is due to the fact that (1) Belgian judges do not always have the required professional knowledge of (complex) insurance law and insurance contracts, and (2) when bringing proceedings before a Belgian Court, one must take into account the fact that most judgments will not be rendered within a short period of time and might be subject to delays. This is probably why in most property, casualty, PI and D&O policies, arbitration is preferred above jurisdiction of the courts.
French courts are adept at handling complex commercial matters.
Depending on a number of variables (such as the identity of the parties or possible jurisdiction clauses), commercial disputes can either be heard before commercial courts, which are staffed by non-professional judges who are usually weathered business people, or before civil courts, which are staffed with professional judges. Both types of courts are familiar with complex commercial cases.
French courts have an important degree of specialization and sophistication as a result of the way jurisdictions are organised. Indeed, the civil courts of major cities have specialized sections that concentrate on particular types of disputes and areas of the law (i.e. insurance, construction, finance etc.).
French jurisdictions are used to handling complex international matters (whether French law or foreign laws apply) and French courts increasingly have specialized international sections (where evidence and testimonies can be given in foreign languages and certain aspects of common law procedure may be introduced), such as the international section of the Paris commercial Court, or the international section of the Paris Court of appeal, which was recently created on 7 February 2018. France’s ability to deal with complex international matters is not, moreover, limited to state courts, as Paris has long been one of the world’s preeminent centres for international arbitration.
Canada has a modern court system and routinely deals with complex commercial claims.
Insurance coverage disputes are heard by civil courts. Civil courts hear a wide range of disputes
and are not particularly experience in insurance commercial issues.
Assuming that the jurisdiction of the Portuguese courts applies, insurance related disputes fall under the competence of common judicial courts, which have reasonable experience in dealing with complex commercial claims, including insurance-related claims. The main criticism on the Portuguese judicial system is the average duration of the proceedings.
Yes, all Italian court, being made by professional judges, are able to handle complex commercial claims, including the most complicated reinsurance litigations.