When I was a very junior (probably first year) lawyer, one of the founding deans of the modern policyholder practice, Jerry Oshinsky, when he found out I was working on the concept of partial equitable subrogation in the context of insurance losses, laughed and said he considered the entire subject to be “black magic,” more driven by the projected outcome than by the case law. I have thought about that comment often in many contexts related to insurance law doctrines over the years, probably none so much as with regard to the follow the fortunes doctrine in reinsurance. A while back, I tried a reinsurance case in state court that involved a relatively recent environmental loss that triggered policies, with corresponding reinsurance, from decades ago, but the reinsurance contract had long since been lost, leading to a trial akin to one involving a lost policy. The court eventually simply used the follow the fortunes doctrine to resolve the entire matter, after a week long trial, under circumstances where it almost certainly should not have had that impact. The phrase “follow the fortunes,” though, was enough, almost as if it had the force of “black magic,” to render all of the evidence at trial, other than the testimony that the contract must have included such a clause, meaningless.

I mention this because I really enjoyed longtime reinsurance lawyer Robert Hall’s paper on whether follow the fortunes clauses should be implied into the language of reinsurance contracts, which you can find here. That’s effectively what the trial court did in my case a few years back, and then from there used the doctrine to decide the entire dispute. Black magic indeed.