Clyde & Co are expecting more legal disputes, plus pressure on insurers long term, as there is no sign of peace breaking out in Eastern Ukraine anytime soon. Although the conflict has been going on at a low level of deaths for a decade, it’s now just over one year since the large scale Russian invasion of Ukraine, Christopher Hill, Partner at Clyde & Co, comments on Russia-related sanctions:
There are a great many insurance disputes arising from the Russia-related sanctions imposed since February 2022. We anticipate the numbers rising further, with sanctions clauses likely being increasingly tested both in the UK and other jurisdictions.
Certain classes of business (such as those with an aviation touchpoint) have already seen large claims made by insureds, some of which are currently the subject of disputes in the UK courts. We anticipate that this trend will extend to a number of further classes of Russia-related business.
As the year progresses, we will likely see further restrictions imposed by the UK and the EU in response to the ongoing conflict in Ukraine. Indeed, the EU imminently intends to designate more entities and individuals involved in spreading misinformation and to extend export restrictions on further categories of goods. In addition, looking ahead, we anticipate that there will be an increasing focus from UK and EU authorities towards enforcement to further deter non-compliance.
The last 12 months have seen an unprecedented wave of sanctions imposed against Russia. This has created disruption for insurers with respect of their Russia related business. Moving from a period of intense introduction and implementation of sanctions to a more business as usual trading environment comes with its own challenges however, which will no doubt keep sanctions compliance at the forefront of insurers’ minds.
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