Lamb-Weston rule is a legal doctrine apportioning a liability between two insurers. The Lamb-Weston rule is developed from the case, Lamb-Weston, Inc. v. Oregon Auto. Ins. Co., 219 Ore. 129 (Or. 1959). The rule is applied where two insurance policies covering the same risk contains a clause which is repugnant to each other. The Lamb-Weston Rule is applied in order to disregard mutually repugnant clauses. Hence, the liability of the two insurers is thereupon prorated on the basis of the coverage of each policy.
The Lamb-Weston rule ignores the basic rule of contracts requiring consideration of policy language in order to determine meaning and intent of the insurance clause. Lamb-Weston rule is considered a better rule of law. It is applied in all cases where conflicting insurance clauses of the excess, pro rata or escape types are found.
The Lamb-Weston rule presents an appealingly simple and no-nonsense way to deal with the ambiguities of insurance policies. The Lamb-Weston rule also provides a mechanistic solution to conflicting insurance clauses, and it results in a pro ration of policy limits in resolving these claims. [St. Paul Mercury Ins. Co. v. Pennsylvania Casualty Co., 642 F. Supp. 180, 183 (D. Wyo. 1986)].