BG is an insurance broker which placed a motor insurance policy with its insurer for a driver who subsequently crashed and seriously injured a passenger whilst abroad. The insurer settled with the injured passenger for £1.7m and now seeks recovery from BG on the basis that the passenger did not fulfil its underwriting criteria and BG should never have placed the policy in the first place.

BG’s professional indemnity insurers have declined to provide cover for the claim on the basis that BG placed the policy under a ‘binder’ and that it had not disclosed that ‘binder’ to it. BG argues that the contract in question was not a ‘binder’, but rather a ‘terms of business agreement’.

The case involves not only issues around material non-disclosure and knowledge of circumstances (all reasonably common in disputes under PI policies) but also requires an understanding of the mechanics of how the insurance industry works and the relationship between brokers and insurers. Our deep understanding of, and involvement in, the insurance market makes us well placed to resolve this issue.

We ultimately negotiated a satisfactory commercial settlement between all parties.

Advising on the insurance position as regards a claim against a Guernsey based service company, in a piece of High Court litigation involving eleven parties and for a total of around USD100,000,000.

Allegations of material non-disclosure were levelled against the insured, as well as various other coverage issues within the context of the claim. The underlying litigation was subsequently compromised but we negotiated a withdrawal of the notification of the claim, as well as a complex mechanism whereby the obligations of the insurer were compromised without the policy being avoided, thereby meaning that Lancaster will not be prejudiced in future insurance negotiations.

We acted for an IFA which advised on ‘Keydata’, an investment vehicle which failed and was placed into administration by the FSA.

Subsequently, our client completed a proposal form for professional indemnity insurance but did not disclose that it had advised its clients to invest in Keydata because it did not consider the administration of Keydata to be a material fact.

Our client subsequently received a Letter of Claim alleging its Keydata advice was negligent.  It notified this to its insurers. Insurers refused an indemnity on the basis that the administration of Keydata was a material fact which should have been disclosed prior to inception of the policy.

We successfully argued that the administration of Keydata was not a material fact and cover was confirmed for all Keydata claims

Our client is one of the largest claimant solicitor firms in the UK. It had the benefit of a professional indemnity policy with an insurer.

One of its partners was made the subject of an inquiry by the Solicitors Disciplinary Tribunal (“SDT”) and our client made a claim under its policy for an indemnity in respect of its defence costs.

The insurer argued that there was no indemnity available for defence costs because, amongst other reasons:

  1. The inquiry did not arise from a “failure to perform legal services”, which was a requirement for an indemnity;
  2. No “claim” had been made against our client which could be the subject of an indemnity;
  3. No civil liability could arise from the inquiry;
  4. The policy only covered defence costs arising out of disciplinary proceedings which arose from a “recommendation” of a professional body that an investigation take place, and the inquiry had not arisen from a “recommendation”;

We argued that

  1. The inquiry did arise from a failure to provide legal services otherwise it would not be the subject of an SDT inquiry;
  2. There had been a claim by a third party;
  3. An award by the SDT could be enforced in the civil courts and therefore was a potential “civil liability”
  4. The policy wording was archaic insofar as the specific professional bodies named in the policy had been superseded and, as such, so had the reference to “recommendations”. Instead reference should be had to the legislation which provided for the new relevant professional bodies and which could be argued to allow the relevant professional bodies to make “recommendations”;

This case, had it progressed to trial, would have had far reaching implications for solicitors professional indemnity policies. The insurer clearly did not consider it was the intention of its own policy wording (which was based on the SRA’s minimum terms and conditions) to provide cover for defence costs in this situation. However, a judgement in our client’s favour would have meant significant increased exposure to it, and all other solicitors PI insurers in respect of these costs.

As such, we were able to exercise leverage and we obtained a satisfactory commercial settlement three days before trial.

In the last two years the FSA (now FCA) has intervened in two specific investments.

It placed Keydata Investment Services Limited into administration in June 2009. The FSCS compensated all investors and then brought proceedings against all IFAs which advised clients to invest in Keydata, originally for around £210m.

It has also ordered IFAs who advised clients to invest in a bundle of investments, commonly known as “Arch Cru”, to undertake a redress scheme which requires compensation to be paid to those investors who choose to opt in to the scheme.

The amount of each individual investor’s loss is relatively small and in the majority of cases falls within the IFAs’ policy excess, often around £10,000. As such, many insurers have sought to argue that a policy excess should be applied to each investor, thereby relieving them of all of, or most of, their liability. However, the impact on IFAs would be that many would be forced out of business if they are required to pay multiple excesses.

We have argued that, in fact, the Keydata claim by the FSCS should be understood to be one claim. Equally, we have argued that the Arch Cru compensation claims can be aggregated into one claim, both with the result that only one excess should be applied.

We have managed to negotiate various deals with insurers on a commercial basis allowing IFAs to continue trading.

Meet the Team

David Pryce Managing Partner

David is a partner specialising in insurance disputes, with a particular focus on Construction and Technology risks.

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Jonathan Corman Partner

Jonathan is a partner specialising in insurance disputes, with a particular focus on Professional and Financial risks.

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John Curran Partner

John is a partner specialising in insurance disputes with a particular focus on D&O, Energy, Industrial, and Institutional risks.

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Joanna Grant Partner

Joanna is a partner specialising in insurance disputes, with a particular focus on Property Risks.

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Amy Lacey Partner

Amy is a partner specialising in resolution of coverage disputes for policyholders with a particular focus on Construction risks.

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Aaron Le Marquer Partner

Aaron Le Marquer is a partner specialising in insurance disputes for policyholders with a particular focus on Products and Environmental risks.

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Alex Rosenfield Senior Associate

Alex has a solid grounding in coverage disputes. His experience includes professional indemnity claims, property damage and business interruption.

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Rob Goodship Senior Associate

Rob is an associate specialising in insurance disputes with considerable experience in property, construction and professional indemnity risks.

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Daniel Robin Senior Associate

Daniel is an associate specialising in insurance disputes with a particular focus on professional liability, property damage, commercial combined policies and financial lines.

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James Breese Associate

James has considerable litigation and regulatory experience to complement his knowledge of insurance disputes.

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Nicola Bowen Associate

Nicola is an associate specialising in Property risks.

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Phil Taylor ACII Insurance Consultant

Phil is a consultant specialising in EL, PL, Products and Professional Indemnity claims.

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Donna Baldwin Practice Director

Donna is Fenchurch Law’s Practice Director.

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Michael Hayes Business Development Manager

Michael is Fenchurch Law's Business Development Manager.

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Tracey Pryce BD & Operations Consultant

Tracey is a consultant to Fenchurch Law, providing support to the business development and operations team.

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Madison Shirt Operations Assistant

Madison provides administrative support to all fee earners and ensures the smooth running of the Fenchurch Law office.

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Our Approach

Underpinning everything we do is the belief that honest policyholders, with genuine claims, should be supported by their insurers through every step of the claims process, and should have their claims paid, in full.

Our Principles

All our efforts and energies are directed towards one purpose, which we call The Fenchurch Law: always act in the policyholder’s best interests.


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