Significant Danish Supreme Court decision considers choice of law principles applicable to direct action claims

The Danish Supreme Court was recently tasked with deciding the law applicable to a direct action claim. In international direct action disputes against an insurer, courts must exercise a choice of law analysis to determine which country’s law applies to the question as to whether a direct action is permitted. The test may be subject to different approaches. The Supreme Court’s decision is noteworthy given that it made the choice of law analysis subject to a flexible approach, which considered several particular factors, including the insurance contract. In Danish law, this approach is termed the ‘individualising method’, which dictates that when deciding the law applicable to a direct action dispute, the court will consider the particulars of the case.