Interpretation is simultaneously one of the most important and most peculiar areas of contract law and insurance law. Important, because it is hugely important in commercial litigation in general and insurance litigation in particular. Peculiar, because there are well-developed but conflicting approaches to interpretation that courts often state clearly but apply inconsistently.
Ronald Gilson, Charles Sabel, and Robert Scott’s most recent article on the subject presents “a typology of transactional settings” based on the level of uncertainty in the underlying transaction type, the number of players in the relevant market, and the sophistication of the contracting parties. The authors suggest that different interpretive principles may apply in different elements of the typology.
The Restatement of the Law of Liability Insurance takes a step in the direction of formally distinguishing settings in which different interpretive approaches are appropriate by formalizing the concept of “large commercial policyholder.” In several respects, the Restatement suggests that policies of large commercial policyholders should be treated differently than those of consumers or small businesses. The idea of distinguishing commercial and consumer policies is hardly new, but enshrining the distinction in a Restatement is an intriguing development.
Some of the speakers at the RCRR conference on the Restatement will address this issue and therefore provide a further test for Gilson, Sabel, and Scott’s project. Jeffrey Pollock of Fox Rothschild will critique the Restatement’s novel distinction and Heather Steinmiller of Conner Strong & Buckelew will speak from the experience of a major insurance broker. Also, Mark Geistfeld, Michelle Boardman, and Erik Knutsen comprise a panel on interpretation in general, including comparative perspectives. No doubt the other experienced practitioners participating, policyholder-side and insurer-side, will have something to say as well. This should provide an exciting mix of different theories and different practice perspectives.