Gulf Ins. Co. v. Transatlantic Reinsurance Co.

Issue Discussed: Access to Records

Submitted by James D. Scrimgeour

Date Promulgated: December 28, 2004

Gulf Ins. Co. v. Transatlantic Reinsurance Co., 788 N.Y.S.2d 44 (N.Y.App.Div.2004)

Court: Supreme Court of New York, Appellate Division, First Department

Issue Decided: Whether the Access to Record provision in a standard reinsurance agreement constitute a per se waiver of the attorney-client privilege or attorney work-product doctrine.

Key Holding:

The cedant, Gulf Insurance Company, issued a policy to a non-party insured that was reinsured under a Quota Share Reinsurance Agreement with various reinsurers.  The access to records clause in the Reinsurance Agreement provided:  “the Reinsurers…will have the right to inspect…all records of the company that pertain in any way to this Agreement.”  After the cedant settled a matter with its insured, it sued reinsurers to contribute their share of the settlement.  The reinsurers argued that the access to records clause required production of various records subject to privilege, including the files of both in-house and outside counsel.   The New York Appellate Court held that access to records clause in the Reinsurance Agreement did not prevent the assertion of the attorney-client and attorney work-product privileges, and to hold otherwise would render theses privileges meaningless.

Key Takeaways:

A standard access to records clause, no matter how broadly phrased, is not intended to act as a per se waiver of the attorney-client or work-product doctrine.

*James D. Scrimgeour is an Executive Counsel at The Travelers Indemnity Company, where he specializes in reinsurance litigation and arbitration.