It is often necessary to understand foreign language terms and legal concepts when advising clients in cross-border dealings. This requires special strategies for thorough and in-depth research.

LEARNING SYNOPSIS
This exercise uses clustering search engines to find out about foreign legal concepts.

EXERCISE
Your client is a large European reinsurance company. The client specialises in reinsuring policies issued for professional malpractice liability, e.g. medical malpractice insurance, consultancy liability, and attorney errors and omissions coverage. Over the years, your client has reinsured a large portfolio of professional liability policies underwritten by foreign insurers, particularly in Commonwealth countries and the US.

The client has just undertaken a large-scale audit of their reinsurance portfolio and wants to conduct a legal due diligence, particularly regarding punitive damages. The starting point for the audit will be policies issued in the United States.

The client is aware that punitive damages are a special feature of the American legal system and wishes to find out whether or not such damages can be awarded in non-US jurisdictions. In particular, the client wants to know whether ‘lost’ punitive damages can be awarded as compensation in legal malpractice actions. In addition, the client wants to know if it is possible to insure potential losses for punitive damages, especially in the US where such awards can have devastating financial effects.

In order to advise your client, use the Internet to research the following information:

1) Find out what punitive damages are.

2) Can ‘lost’ punitive damages be awarded as compensation in legal malpractice actions in US jurisdictions?

3) Is it possible to insure potential losses for punitive damages in the US?