Richards v. Lloyd’s of London
Citation and Court
135 F.3d 1289 (9th Cir. 1998)
Facts
American “Names” (investors who provided capital to Lloyd’s insurance syndicates) suffered catastrophic losses and sought to sue Lloyd’s in U.S. courts under U.S. securities and RICO laws. Their membership contracts contained choice-of-law and forum selection clauses designating English law and English courts.
Issue
Whether choice-of-law and forum selection clauses requiring application of English law and litigation in English courts are enforceable to bar American Names from asserting U.S. securities law claims in U.S. federal courts.
Holding
The choice-of-law and forum selection clauses are enforceable; the Names must litigate in England under English law, and the fact that U.S. securities laws would not apply does not render the clauses unenforceable.
Rule / Doctrine
Choice-of-law and forum selection clauses in commercial contracts are presumptively enforceable. To avoid enforcement, a party must show that the clause is unreasonable — such as where it would deprive the plaintiff of a remedy — and the mere unavailability of U.S. statutory claims in the chosen forum does not satisfy that high bar.
Significance
Richards illustrates the strong enforcement of forum selection and choice-of-law clauses even when they effectively deprive U.S. plaintiffs of access to U.S. securities law remedies, emphasizing the primacy of contractual forum selection in international commercial relationships.