Content area
Full Text
EDINBURGH, Scotland-Insurers' subrogation efforts to recover compensation payments made after the 1988 Piper Alpha oil rig disaster appear headed to the House of Lords.
Contractors whose employees died while working on the rig are appealing a December 1999 decision by a Scottish appellate court that could leave them liable for the compensation paid plus interest, according to Douglas Russell, a partner at the Edinburgh law firm of Simpson & Marwick who represents the contractors.
The North Sea oil rig exploded in July 1988, killing 167. With an insured loss of about $1.4 billion, the Piper Alpha disaster remains one of the largest insured man-made losses in history.
The 560-page Dec. 20 decision at the Court of Session in Edinburgh ruled that the insurers of the rig's operators, which had funded the original settlement with the disaster's survivors and victims' relatives, could seek reimbursement from the contractors who employed the victims, in the name of the operators.
In 1997, a lower court judge had ruled that the operators' insurers could not sue on behalf of policyholders, because the operators had already been indemnified for their loss.
The appellate ruling, if it stands, means that the rig operators' insurers can seek about 150 million ($239.4 million), including interest, said Michael Payton.
Mr. Payton, an attorney at the law firm of Clyde & Co. in London, represented the insurers in the litigation. The insurers include ACE Bermuda Insurance Ltd., Lloyd's of London reinsurer Equitas Ltd....