In commercial disputes, the choice of law applied to the policy or contract is often dispositive — a point that has been proven in a recent PA decision. In the case of Ario v. Underwriting Members of Lloyd’s Of London Syndicates 33, 205 and 506, a Pennsylvania court was faced with the question of which law to apply in the context of a reinsurance dispute involving a Pennsylvania company and Lloyd’s syndicates. The choice of law issue was important in that depending on which law applied the cause of action may have been time barred. The PA court ruled that Pennsylvania law should apply because the case involved a Pennsylvania resident — a decision which allowed the lawsuit to proceed. The opinion cites to many deep legal principles in respect of why this is just and appropriate, but it seems to us that the case once again proves the merit of having a home court advantage when litigation results. We query whether the result would have been different if the reinsurance treaty had been clearer in respect of the choice of law that applied to disputes under its terms.
If you have any questions about this post, please contact Bob Cosgrove at firstname.lastname@example.org.