The new president of the London Forum of Insurance Lawyers (London FOIL) has said the year ahead is likely to see more climate related litigation which will impact insurers and their clients.
Fleur Rochester was elected this week and will lead the organisation through next year. London FOIL is a division of the Forum of Insurance Lawyers (FOIL), which focusses on the challenges facing the global insurance and reinsurance markets operating in the United Kingdom’s capital.
Rochester succeeds Toby Vallance, who was a at the helm in a year which saw the insurance market face the impacts of the Russia-Ukraine war, just as many had been hoping the business world would finally begin recovering financially from the Covid-19 pandemic.
However the year ahead will bring with it new challenges Rochester explained.
The pressures on the London (re)insurance market today stem from an uncertain geo-political, financial and regulatory landscape, which is characterising the nature and volume of claims.
Rochester said she believes London Foil, and it members, will play a key role advising insurers in the London and specialty markets, in how best to support insurer clients with the continuing challenges they face: the ongoing local and global political and economic situation, digitisation (of the business world affecting cover and claims, and of the insurance industry itself), claims inflation, ESG issues including the transition to clean energy and promoting diversity, inclusion and wellbeing, as well as increased regulation of the industry, its stakeholders and its clients.
“With the entire insurance industry facing such an unprecedented level of challenge, FOIL and London FOIL members will continue to support insurers in navigating legal risks during these difficult times and help them to make the most of opportunities,” she added.
One area of particular interest in the growing trend of climate related litigation which has seen shareholders and other groups seek redress in the courts over companies’ green performance and alleged failures in meeting their stated ESG objectives.
While UK court have yet to see such a case heard the expectation is that the efforts to bring such cases will only increase.
“The recent surge in climate-related litigation signals a shift towards improved social responsibility and environmental accountability, combined with better transparency in corporate governance,” she explained. “As more companies commit to net-zero targets, greenwashing litigation, particularly against oil and gas companies, gathers pace. In the UK, environmental organisations were recently dealt a blow by the Court of Appeal’s decision to end ClientEarth’s attempt to hold Shell’s board of directors personally liable for allegedly failing to adopt a transition strategy which aligned with the Paris Agreement. Whilst derivative actions may be difficult, pressure on the ESG decisions of directors & officers’ will be maintained by any means possible, for example through challenges to investment policies.”
Rochester added: “There is a real risk of companies over-promising and under-delivering. Directors and officers are navigating an increasingly complex legal environment, where achieving ESG targets is not only a matter of social responsibility, but also necessary to avoid or mitigate potential liabilities and to hold customer interest. The insurance industry will continue to play a vital role in balancing the risks and helping companies to set realistic ambitions.”
She concluded: “I am thrilled to be appointed as London FOIL’s president. The London (re)insurance market has a challenging year ahead, which will be influenced by numerous external factors: geopolitical tensions, the general election, ESG initiatives, regulation and digitisation – all of these mean (re)insurers are under more pressure than ever before.
“As president, I will support London FOIL members in navigating this new territory and finding the best legal solutions to the issues they face.
Commenting on Rochester’s appointment, FOIL CEO Laurence Besemer added: “So much change has happened in the past year, and so quickly. London FOIL will, as always, use the combined knowledge of its members to inform its thinking and develop practical solutions to the pressures the industry is facing in 2024.”