Clifford Chance

PI Clubs Pay to be paid versus direct action

30 August 2017

Globally, many jurisdictions have legislated to allow actions to be brought directly by third party claimants against an insurer without first having to sue the insured. 'Direct action suits' as they are called, can be problematic for P&I Clubs and their members as they often circumvent exclusive jurisdiction clauses in P&I Contracts, and undermine the 'pay to be paid rule'. These issues were brought to light in a recent decision of the European Court of Justice (ECJ) which has significant implications for P&I Clubs.

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