Insurers cannot pursue suits against Libya

[This is part of the headline over a report published yesterday on the Business Insurance website. It reads as follows:]

Insurers cannot pursue lawsuits against Libya in connection with two terrorism acts, including the 1988 bomb explosion of Pan Am Flight 103 over Lockerbie, Scotland, that killed all 243 passengers, says a federal appeals court in upholding a lower court ruling.

In November 1985, EgyptAir Flight 648 was hijacked, which resulted in the death of passengers and the aircraft hull’s destruction, according to Monday’s ruling by the United States Court of Appeals for the Federal Circuit in Washington, DC, in Aviation & General Insurance Co Ltd et al v. United States. The US State Department determined the terrorist group involved had received considerable support from the Libyan government.

Then in December 1988, explosives concealed in the luggage compartment of Pan Am Flight 103 as it crossed Scotland killed all 243 passengers, as well as 16 crew members and 11 bystanders, according to the ruling.

The terrorist responsible was acting as an agent of the Libyan government, according to the ruling.

Libya’s sovereign immunity was suspended following passage of the State Sponsors of Terrorism Exception to the Foreign Sovereign Immunity Act in 1996 and the National Defense Authoritative Act in 2008, according to the ruling.

A number of insurers, including Lloyd’s of London underwriters, who had paid a total of $97 million in claims in connection with the two terrorist acts, filed suit against Libya. But these lawsuits were terminated following Congress’ passage of the Libyan Claims Resolution Act in 2008, which restored Libya’s sovereign immunity. Libya then paid the government $1.5 billion, according to the ruling.

President George W Bush subsequently signed an executive order terminating any pending lawsuit in US court related to Libyan-sponsored terrorism. 

The insurers filed suit in the US District Court of Federal Claims in an effort to continue their litigation. The court ruling granted the federal government summary judgment in the case.

The ruling was upheld by the appeals court’s 2-1 opinion. “After considering Appellants’ arguments, we agree with the Court of Federal Claims that the government’s action in changing the status of Libya’s sovereign immunity was neither novel nor unexpected and thus could not have interfered with Appellants’ reasonable investment-backed expectations,” said the ruling.

“Appellants’ argument that they nonetheless held a reasonable expectation of compensation, following the Government’s termination of their claims based on historical examples, is of no moment,” said the ruling, in upholding the lower court’s ruling.

The dissenting opinion states the judge could have affirmed the lower court’s summary judgment on a different basis.

[RB: When this action was first raised in 2014 I commented as follows:]

I don't think the action has much hope of success.  Even if the US Presidential Order barred Equitas [the insurance consortium including Aviation & General and Lloyd's] from suing Libya in the United States, there was nothing to prevent it doing so in Scotland (as it already had done, of course, in relation to compensation paid by Pan Am to Lockerbie victims' families: see Pan Am insurer suing US Government over Lockerbie pay-out). And in any event there was nothing to prevent Equitas suing in the US courts before the Presidential Order in 2008.  That they were caught by that Order can be argued to be their own fault for delaying so long: after all, Pan Am 103 was destroyed in 1988 and Megrahi was convicted in 2001. The present action looks to me like a try-on, probably hoping for a "nuisance value" settlement from the US government.

Lockerbie insurance lawsuit against US Government is still on track

[This is the headline over a report published today on the AllGov website. It reads as follows:]

In a landmark case, the US government has for the first time been denied a dismissal in a foreign claims lawsuit. The ruling by a federal judge means that the government could still be on the hook for nearly $100 million stemming from two 1980s Libyan terrorist attacks.

Three insurance companies have been trying for years to get reimbursed for claims they paid out as a result of the two Libya-sponsored terrorist attacks against airliners: EgyptAir 648 in 1985 and Pan Am Flight 103 over Lockerbie, Scotland, in 1988. The insurers, Lloyd’s of London, New York Marine and General Insurance Co and Aviation & General Insurance Co, are seeking a combined $96 million for the two attacks ($55 million for Pam Am 103 and $41 million for EgyptAir 648).

The lawsuit is directed at the US government because Congress passed the Libyan Claims Resolution Act in 2008, which took the right to oversee suits against Libya away from federal courts’ jurisdiction. “Shortly afterward, the government stopped all suits pending against Libya,” according to Benjamin Lane at Insurance Business America.

That didn’t stop the three insurers from going to court to collect monies owed to their underwriters for paying for the Libyan-sponsored attacks 30 years ago. Lawyers for the plaintiffs convinced the US Court of Federal Claims to allow their lawsuit to proceed after Judge Thomas Wheeler denied a motion by government attorneys to dismiss the case. In its denial, the court said the companies have a legitimate property interest on which to base their claims and, more importantly, did something no federal court had done before.

“The case holds landmark status as the first time the government has been denied a dismissal in a foreign claims suit,” Lane wrote.

Wheeler said in his ruling: “Here, where plaintiffs were excluded from receiving any just compensation whatsoever, the court must decide whether the government violated the Fifth Amendment prohibition of takings without just compensation. Accordingly, the court finds that it is well within its jurisdiction to decide this takings claim against the United States.”

[RB: The history of this court action can be followed on this blog here.]

Insurers sue US Government for blocking Pan Am 103 payout claim

[What follows is excerpted from a report published yesterday on the Insurance Business America website:]

A $96 million lawsuit filed against the US government by Lloyd’s, New York Marine and General Insurance Co and Aviation & General Insurance Co went forward this week after the Court of Federal Claims failed to dismiss the suit as the government requested.

The plaintiffs are seeking remuneration from the government after it allegedly blocked certain underwriters from recovering $96 million from Libya for sponsoring two terrorist attacks in the 1980s – the Lockerbie bombings that affected EgyptAir 648 in 1985 and Pan Am Flight 103 in 1988. The insurers had filed suits against Libya before US officials stepped in and terminated the proceedings.

In denying the government’s motion to dismiss, the court held that Lloyd’s and the other plaintiffs had a legitimate property interest on which to base their claims. (...)

Lloyd’s originally sued Libya in 1988, looking for reimbursement for their coverage of the attacks, which cost more than $41 million for the EgyptAir flight and $55 million for the Pan Am flight. The other insurers filed a similar suit in 2006.

However, Congress passed the Libyan Claims Resolution Act in 2008, which took the right to oversee suits against Libya away from federal courts’ jurisdiction. Shortly afterward, the government stopped all suits pending against Libya.

After the plaintiffs filed suit against the US government, governmental officials sought a dismissal on the grounds that the insurers do not possess a valid property interest on which they can base their claims.

The court, however, ruled that plaintiffs demonstrated sufficient facts to establish a “property interest in the insurance contracts they sought to protect with a legal claim against Libya, which the United States subsequently extinguished.”

Lockerbie insurers to sue US government

[This is the headline over a report (tagged “Exclusive”) on page 27 of today’s Scottish Sunday Express. It picks up an item that I published on this blog on 12 August. Today’s Express article, which does not appear on the newspaper’s website, reads as follows:]

Insurers who paid compensation to the families of Lockerbie victims are suing the US government for almost £60million, the Sunday Express can reveal.

Equitas, linked to Lloyd’s of London, and Aviation & General Insurance, have launched a joint action after being blocked from seeking payment from Libya for its involvement in the bombing.

Lloyd’s and Aviation & General paid out £33million to families of those killed when Pan Am Flight 103 exploded over the Scottish town in December 1988.

They, along with New York Marine & General, also parted with £25million over claims related to another Libyan terror attack which destroyed an EgyptAir flight in 1985.

According to papers filed with the US Court of Federal Claims on July 31, the two insurers say Colonel Gaddafi’s Libyan regime supported both attacks by providing weapons, funds, airline tickets, fake passports and explosives.

However, in 2008, President George Bush blocked any further litigation over the incidents, preventing insurance firms recouping any losses from Libya.

Equitas, which holds all of Lloyd’s pre-1993 liabilities, and Aviation & General are now suing the US administration for £58million.

The court papers read: “Plaintiffs regret being forced to seek compensation from the United States, but they have no other means of redress.

“But for the intervention of the United States, Plaintiffs would have two judgements from the US Federal courts against Libya. Plaintiffs primary objective is to hold Libya accountable for the actions of its former government.”

Libyan spy Abdelbaset al-Megrahi was the only man to be convicted of the atrocity, which claimed 270 lives.

He was released from jail on compassionate grounds in 2009 and protested his innocence right up until he died of cancer in [2012].

Former lawyer Robert Black QC, who is a member of Justice For Megrahi - a campaign group which believes the Libyan was innocent - said he did not believe the law suit “had much hope of success”. [RB: I am still a lawyer. I have not (yet) been disbarred.]

He added: “The action looks to me like a try-on, probably hoping for a ‘nuisance value’ settlement from the US Government.”

A spokesman for Lloyd’s said that the company is no longer linked with Equitas and said that they have “no dealings” with the law suit.

Equitas is now controlled by Nebraska-based Berkshire Hathaway, while Aviation and General is owned by Ruxley, in London.

The US government, Equitas and Aviation & General Insurance all refused to comment.

[Here’s the full text of what I said in an e-mail to the journalist: “I don't think the action has much hope of success.  Even if the US Presidential Order barred Equitas from suing Libya in the United States, there was nothing to prevent it doing so in Scotland (as it already had done, of course, in relation to compensation paid by Pan Am to Lockerbie victims' families: see http://lockerbiecase.blogspot.co.uk/2014/08/pan-am-insurer-suing-us-government-over.html). And in any event there was nothing to prevent Equitas suing in the US courts before the Presidential Order in 2008.  That they were caught by that Order can be argued to be their own fault for delaying so long: after all, Pan Am 103 was destroyed in 1988 and Megrahi was convicted in 2001. The present action looks to me like a try-on, probably hoping for a "nuisance value" settlement from the US government.”]

Pan Am insurer suing US Government over Lockerbie pay-out

[What follows is a part of a brief report published yesterday on the website of The Insurance Insider:]

Lloyd's run-off vehicle Equitas is suing the US government for $97mn after it prevented insurers from pursuing the Libyan government for its involvement in terrorism attacks, including the Lockerbie bombing.

Lloyd's insurers, alongside US legacy carrier Aviation & General, paid out $55mn in 1988 after the Pan Am plane exploded over the small town in southern Scotland, killing 270 people.

[Part of the background to this story can be found in a 2003 report in the Scottish Daily Record newspaper:]

The Lockerbie bomber is being sued for £400 million by Pan Am's insurers. 

A record civil action will be raised at the Court of Session this week in Edinburgh against ex-Libyan secret agent Abdel Baset Al-Megrahi. 

Insurers acting on behalf of the now-defunct airline want compensation for the money they paid out to the victims of the disaster. 

The case is the biggest single damages action ever lodged in a Scottish court. 

Megrahi's former co-accused Al Amin Khalifa Fhimah, who was acquitted, the Libyan government and Libyan Airlines have also been named in the lawsuit. 

Last week, Megrahi, 51, was told at the High Court in Glasgow he must serve at least 27 years before he can be considered for parole. 

The action at the Court of Session has been tabled by Equitas of London, a subsidiary of Lloyd's of London. 

The legal move comes 15 years after Pan Am Flight 103 was blown to pieces by a bomb, killing 270 people. 

Equitas want to claw back some of the £600 million paid to their families. 

They are also trying to recover money on behalf of creditors of Pan Am, who went bust in 1991. Pan Am were sued by the families of the victims, including the 11 residents killed in Lockerbie. 

Claims were also made by residents whose homes were damaged. 

After the airline folded, power of attorney was transferred to Equitas. 

Equitas who have been pursuing Libya and the bombers since the 1990s have hired Edinburgh legal firm [Shepherd and Wedderburn] to represent them. 

A spokesman for Equitas said: “We are continuing to try and pursue our recoveries and the action in the Court of Session is part of that.'' 

Libyan leader Colonel Gaddafi has agreed to pay £1.7 billion compensation to the victims' families after taking responsibility. [RB: The sum was $2.7 billion. The contingency fees of the lawyers representing the families swallowed up around one third of this.]

Equitas hope a win will put pressure on Libya to pay on behalf of the other parties, including Megrahi. 

Yesterday, Dr Iain Scobbie, a lecturer in international law at Glasgow University, said it would be difficult for Equitas to get compensation, even if they win. 

He said: “Under international law, a sovereign state is immune from any action of this kind.'' 

Megrahi's lawyer, Eddie McKechnie, said he could not comment, as he only represents his client on the criminal charge. 

[Another report, from June 2004, can be read here on the website of The Herald. The Court of Session action was settled on 18 February 2005: see Jonathan B Schwartz Dealing with a "rogue state": the Libya precedent, pages 568-69, footnote 92. It appears from an Associated Press news agency report on the website of The Washington Post that the settlement involved a payment in excess of US$31 million.

Given the various successful legal actions taken by Pan Am's insurers against Libya that the above sources specify, it is not immediately clear to me what their present action against the US Government relates to.]