DENMARK Law and Practice Contributed by: Josefine Movin Østergaard and Johannes Hedegaard, Bruun & Hjejle
The Danish Institute of Arbitration (DIA) operates under its own set of rules of arbitration procedure (the Rules of Arbitration adopted by the Board of the Dan- ish Institute of Arbitration) in addition to the Danish Arbitration Act. Arbitration in Insurance Disputes According to Section 7 (2) of the Danish Arbitration Act, an arbitration agreement entered into before a dispute arises is not binding on the consumer. Instead, disputes regarding consumer insurance are typically resolved either through the Danish Insurance Com- plaints Board or through the ordinary courts. When it comes to commercial insurance, it is also not customary to agree on arbitration clauses in many standard business insurance policies. Consequent- ly, disputes originating from insurance contracts are generally adjudicated by the ordinary courts. How- ever, there is a greater tendency to include arbitration agreements in larger insurance programmes, particu- larly those involving significant liability insurance. Confidentiality in Arbitration The Danish Arbitration Act does not address confi- dentiality, but there is an implied duty of confidential- ity in arbitration. If there is no agreement, the arbitral tribunal can decide on confidentiality after hearing the parties, according to Section 19 (2) of the Danish Arbitration Act. Appeals Against Arbitration Awards In Denmark, arbitral awards cannot be challenged through ordinary legal remedies. Awards of the arbitral tribunal are not subject to appeal or general review by the Danish courts. At the request of a party or upon the court’s own assessment of the arbitral award, the court may set aside the award on grounds of invalidity in accordance with Section 37 of the Danish Arbitra- tion Act. Any legal action to set aside an arbitral award must be brought within three months of the date on which the party requesting the setting aside received the award. According to Section 37 (2), an arbitral award may only be set aside if:
• The requesting party proves that: A party lacked legal capacity under its domicile’s law, or the arbi- tration agreement is invalid under the chosen law (or, absent a choice, Danish law); (a) the requesting party was not properly notified of the arbitrator appointment or proceedings, or was otherwise unable to present its case; (b) the arbitral award addresses disputes outside the scope of the arbitration agreement or de- cides matters beyond it; or (c) the tribunal’s composition or procedure did not comply with the parties’ agreement or the Act. • The court finds that: (a) the dispute is not arbitrable under Danish law; or (b) the award is manifestly incompatible with the public policy of the country. 4. Coverage Disputes 4.1 Evolving Trends in Coverage Disputes Several key trends are shaping insurer and insured positions. • Complex liability claims – D&O, professional Iin- demnity and W&I disputes have grown in complex- ity and value. Litigation funding has enabled large group actions against major Danish corporations. Natural disasters, cyber risks, geopolitical instabil- ity and digitalisation contribute to this trend. • Consumer protection – recent amendments to the Danish Consumer Contracts Act ( forbrugeraftalel- oven ) and the Danish Insurance Contracts Act ( forsikringsaftaleloven ) reflect stronger policyholder protection, particularly for distance selling of finan- cial services. • Insurer insolvencies – Alpha Insurance (2018) and Gefion Insurance (2021) insolvencies have raised questions about policyholder protection through the Danish Guarantee Fund for Non-life Insurance Companies ( Garantifonden for skadesforsikrings- selskaber ). • Workers’ compensation subrogation – Danish courts are testing whether a workers’ compensa- tion insurer may pursue a manufacturer where an employee’s injury was caused by a defective prod- uct. Given the substantial sums involved, viable
91 I NSURANCE L I T IGATI O N 2026
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