Insurance Litigation

Insurance litigation is the legal process of resolving disputes between insurers and insureds (or between insurers and third parties) through the court system or through arbitration. In Kenya, insurance litigation is governed by the Insurance Act (Cap 407), the policy terms and conditions, the Arbitration Act (where the policy contains an arbitration clause), and the Civil Procedure Act and Rules. The Insurance Appeals Tribunal also has jurisdiction over certain appeals from decisions of the Insurance Regulatory Authority. Insurance disputes can involve significant sums of money, and the outcome often turns on the precise interpretation of policy wordings — making this a technically demanding area of litigation.

Advocates offering this service act for insurers, policyholders, and third-party claimants. Advocates handle the full range of insurance disputes: coverage disputes (where the insurer denies that the loss is covered by the policy); quantum disputes (where the insurer accepts coverage but disputes the amount claimed); subrogation disputes (where the insurer, having paid the insured, seeks to recover from the third party responsible for the loss); and contribution disputes (where multiple insurers are liable for the same loss and must share the cost).

Coverage disputes are the most common type of insurance litigation. Advocates act for policyholders whose claims have been declined — challenging the insurer's reliance on exclusions, conditions, and non-disclosure defences. Advocates interpret the policy wording, gather the evidence of the loss and the circumstances, and present the case for coverage. Advocates also act for insurers defending coverage claims — arguing that the loss falls within an exclusion, that the insured breached a condition, or that the insured failed to disclose a material fact at the proposal stage. Much of the work turns on the interpretation of policy wordings — an area where the precise meaning of a single word can determine whether a multi-million-shilling claim is covered.

Advocates handle motor insurance disputes — including own damage claims, third-party property damage claims, and personal injury claims under the Insurance (Motor Vehicle Third-Party Risks) Act. Advocates act for insurers in the recovery of sums paid under the Act from the responsible drivers, and they handle disputes over the settlement of total loss claims and the repair of damaged vehicles.

Advocates handle professional indemnity disputes — where a professional (a lawyer, accountant, architect, engineer, doctor, or other professional) is sued by a client for negligent advice or service, and the professional's insurer is called upon to defend the claim and pay any damages. Advocates act for the insurer in the management of the claim, the conduct of the defence, and the negotiation of settlement. Advocates also act for the professional in disputes with the insurer over coverage and settlement.

Advocates handle life and disability insurance disputes — including disputes over the payment of death benefits, the assessment of disability, the interpretation of medical evidence, and the application of policy exclusions (such as pre-existing condition exclusions and suicide exclusions). The work also covers the medical and actuarial issues that arise in these cases, and they work with medical experts and actuaries to present the technical evidence.

Advocates also handle reinsurance disputes — disputes between insurers and reinsurers over the interpretation of reinsurance contracts, the allocation of losses, and the payment of reinsurance recoveries. These disputes are often international in character, involving reinsurers in multiple jurisdictions, and advocates also handle the management of cross-border reinsurance disputes through arbitration and litigation.