Prestige pollution damage claims “progressing slowly” says London Club

The pollution damage claims arising from the Prestige oil spill in November 2002 (2002/03 policy year) continue to progress slowly, said London Club in its report on policy year 2017/18. London Club was the insurer for the 81,000 dwt Aframax tanker.

The Club said that this was a consequence of the civil claims being determined at the end of the criminal proceedings. After a long trial in Spain, the Master was acquitted, but was then found guilty after a short appeal process.

“Controversially, the Association was found directly liable for pollution damage claims up to the policy limit of US$1bn, even though the limit under the CLC Convention, lodged in cash in court in 2003, was materially less”, London Club said. In November 2017 the Spanish Court provided a judgement on the amount of liability. The Spanish and French States’ claims were essentially upheld as presented, at €1.65bn, while the third-party claims were substantially reduced.

London Club observed that the sums awarded to the States were multiples of the level at which they were assessed by experts retained by the IOPC Fund, and that the quantum judgement was under appeal.

London Club anticipated the case now moving towards the enforcement phase.

The third-party claimants could be fully satisfied from the CLC limitation fund if the State claimants agree their request to stand at the back of the queue.

To enforce the judgement against London Club (up to the $1bn limit), the State claimants would have to overcome the earlier judgements obtained by the Club in London against the Spanish and French States, which submitted to the jurisdiction of the English courts, determining that any claim against London Club beyond the CLC limit had to be brought by way of arbitration in London and was subject to the “pay to be paid” rule.

London Club said that the Spanish judgement was considered irreconcilable with those obtained by the Association in England and as such was unenforceable under the Brussels I Regulation. “The Prestige case is being followed closely by industry and the International Group’s reinsurers”, London Club concluded.