Fenchurch Law Grows its Expertise with Insurance Litigation Specialist Hire
Insurance coverage specialists, Fenchurch Law, have announced that John Curran has joined as a partner. John will concentrate on insurance disputes with a particular focus on Energy, Industrial, and Institutional risks.
John joined Fenchurch Law after 20 years at Clifford Chance, and more recently six years at DLA Piper, where he acted for insurers, brokers, and policyholders in disputes arising in the London market and internationally.
As well as acting in insurance disputes, John has extensive experience in advising on insurance wordings and the use of insurance in financial and corporate transactions. John is a qualified as a solicitor in Hong Kong as well as in England, and is a Solicitor Advocate.
"We are delighted that John has agreed to join Fenchurch Law. Adding his expertise and skill is part of a wider objective of improving outcomes for policyholders, and putting policyholders first in everything we do," said David Pryce Managing Partner.
Founded in 2010 Fenchurch Law is a specialist firm of City solicitors. They provide insurance advice, and handle insurance disputes. Based in the iconic Gherkin building in the heart of London Insurance Market, they represent policyholders with complex and high value coverage disputes with their insurers.
Fenchurch Law moves up Legal 500 Rankings
The new Legal 500 rankings have been published and we are pleased to announce that Fenchurch Law has moved up to Tier 2.
"We are very pleased to have improved our ranking in Legal 500. We really appreciate all the support that we’ve had from all our clients and their brokers, and we’re committed to repaying that support with an ever-improving level of service. Our mission is to put policyholders first in everything we do." said David Pryce, Managing Partner.
What the Legal 500 is saying about Fenchurch Law:
Fenchurch Law is a niche firm with ‘strong expertise in acting for policyholders’, providing ‘excellent service and a client-centred approach’. Co-founders David Pryce and Rob Fink head the team, and senior associate [now partner] Daniel Brooks joined the group in April 2014. Pryce ‘comes up with ideas that are intelligent but different; his thinking often delivers unexpectedly good results out of unpromising situations’.
Find our full Legal 500 2015 profile and rankings here:
http://www.legal500.com/c/london/insurance/insurance-litigation-for-policyholders
Founded in 2010 Fenchurch Law is a specialist firm of City solicitors. They provide insurance advice, and handle insurance disputes. Based in the iconic Gherkin building in the heart of London Insurance Market, they represent policyholders with complex and high value coverage disputes with their insurers.
AIG Europe Limited –v- OC320301 LLP and Others
While some in the market may regard the recent decision of AIG Europe Limited -v- OC320301 LLP [2015] EWHC 2398 (Comm) (14/08/2015) as a fairly dry analysis of a particular aggregation clause, others will see it as yet another example of the courts’ instinctive inclination to side with policyholders/claimants whenever that feels consistent with the overall “justice” of the case.
The dispute in AIG -v- OC320301 LLP was in substance between a large group of 214 claimants and AIG, the PI insurers of the firm of solicitors whom those claimants had retained.
The claimants had all become involved with a UK property developer, Midas International Property Development Plc (“Midas”), which planned to develop holiday homes at two sites, one in Turkey and one in Morocco. The claimants had either invested in one or other of those developments or had made payments in order to purchase a holiday home once the developments were complete.
Midas retained the Solicitors in respect of both developments. The claimants were told that they would be protected by security interests in the underlying assets (land, in the case of the Turkish development; shares in the company which owned the land, in the case of the Moroccan development) and that their funds were only to be released once the promised level of security was in place (“the cover test”).
In fact, and for different reasons in relation to each of the two developments, there was never adequate security. In both cases the Solicitors failed to apply the cover test properly, with the result that the claimants’ funds were released without their positions being protected.
Midas subsequently went into liquidation, so that the claimants’ only possible recovery was by claiming against the Solicitors. Crucially, the claimants’ claims totalled over £10m (albeit the average claim was for only about £46,000), whereas the limit of cover in the Solicitors’ PI policy was £3m. .
The aggregation clause was Clause 2.5 of the Minimum Terms & Conditions (“the MTCs”), which aggregated all claims, whether arising against one or more insured, arising from:
“(i) one act or omission;
(ii) one series of related acts or omissions;
(iii) the same act or omission in a series of related matters or transactions;
(iv) similar acts or omissions in a series of related matters or transactions…”
AIG argued that sub-clause (iv) applied, ie that the 214 separate claims arose from “similar acts or omission in a series of related matters or transactions”.
The claimants sought to persuade the court (Mr Justice Teare) that, since solicitors are obliged to carry professional indemnity insurance so as to ensure that they are able to compensate their clients, the aggregation clause should be construed so as to give the public the greatest level of protection. The court held that this submission was “too simplistic”. It observed that the MTCs - including the aggregation clause - were the result of discussions between the SRA and the insurance industry: doubtless the aggregation clause could have been more narrowly expressed, but then the limit per claim might have been lower or the premium might have been greater. “Thus, when construing the MTCs, and in particular the aggregation clause, the court should do so in a neutral manner, neither predisposed to assist the public nor predisposed to assist the insurer.”
The court then went on to consider how the two limbs of sub-clause (iv) applied to the facts of this case.
“Similar acts or omissions”
The claims had to arise from “similar” acts or omissions, but what was meant by “similar” in this context? The court held that “the requisite degree of similarity must be a real or substantial degree of similarity as opposed to a fanciful or insubstantial degree of similarity”. It might be said that this is so obvious or trite as to deprive this supposed test of any utility.
Be that as it may, the court had little hesitation in concluding that, in relation to both the Turkish and Moroccan developments, all the claims arose from the Solicitors’ failure to ensure that there was effective security (albeit in the one case over land and in the other case over shares), so that the cover test was not properly applied and the claimants were exposed to loss in the event that, as occurred, the developments failed. The claims thus arose out of similar - if not identical - acts or omissions.
“In a series of related transactions”
The court concluded that this phrase has at least three possible meanings, which were variously supported by the claimants and AIG.
First, as submitted by AIG, the phrase could mean simply a number of transactions which, on the facts of the particular case, were sufficiently similar and/or connected. The court rejected that submission: “If it were correct, the scope of the unifying factor and hence of the aggregation clause would be very wide with no clear limit. Claims would be aggregated where they arose out of similar acts or omissions in … transactions which are sufficiently similar and/or connected… But such test is vague, uncertain and soft-edged. AIG offered no assistance as to how one judged whether transactions were “sufficiently” similar and/or connected…”
Secondly, the phrase “a series of related matters or transactions” could mean, in the context of this particular case, a number of independent transactions which nevertheless were related because they were investments in one particular development. That was the claimants’ fall-back position. It would at least have meant that they could recover £3m for the claims in respect of the Turkish development and a further £3m for the claims in respect of the Moroccan development.
Finally (and this was the claimants’ primary case), the phrase could mean a series of transactions which were related by reason of being dependent on each other. By dint of what can only be described as some very abbreviated reasoning, this was the construction favoured by the court, which held that this was the most natural meaning of the phrase in the context of a solicitors’ insurance policy, since it was “difficult to talk of transactions being related unless their terms are in some way inter-connected”.
That construction constituted an unambiguous triumph for the claimants, since it was not suggested that any of the 214 transactions was dependent on any of the others. Thus there was no aggregation, and AIG was left potentially liable to pay the entire £10m sought by the claimants.
However, it is far from clear why the court felt compelled to hold that transactions should only be described as “related” if “their terms were in some way inter-connected” or if the transactions were “dependent on each other”. Many might say that transactions can be “related” simply by virtue of having a near identical subject matter (in this case, the investment in one or other of the two developments) or involving the same central participant (in this case, Midas).
The court plainly appreciated that a different opinion on this issue might prevail, since it is understood that it gave AIG permission to appeal.
Insurance Coverage Partner joins Fenchurch Law
Insurance coverage specialists, Fenchurch Law, have today announced that Jonathan Corman has joined as a partner.
Jonathan has been an insurance specialist for over 20 years, concentrating primarily on professional indemnity claims, as well construction, EL/PL and D&O. He has fought numerous coverage disputes for London Market insurers over the years, his reported successes including Total Graphics Ltd -v- AGF Insurance Ltd [1997] 1 Lloyd's Rep. 599 and Burgess Wreford & Unsworth -v- Aegon Insurance Co (UK) Ltd LTL 20.7.99 as well as a number of confidential arbitrations.
"We are delighted that Jonathan has agreed to join Fenchurch Law. Recruiting someone with such experience fits perfectly with our objective of improving outcomes for policyholders, and putting policyholders first in everything we do," said David Pryce Managing Partner.
Founded in 2010 Fenchurch Law is a specialist firm of City solicitors. They provide insurance advice, and handle insurance disputes. Based in the iconic Gherkin building in the heart of London Insurance Market, they represent policyholders with complex and high value coverage disputes with their insurers.
Fenchurch Law promotes Daniel Brooks to Associate Partner
Fenchurch Law, the policyholder-focused coverage specialists, have promoted Daniel Brooks to Associate Partner.
Daniel joined Fenchurch Law in 2014 and his work is focused on contentious coverage disputes and uninsured defence work for a broad range of policyholders in the UK.
Daniel has a particular focus on insurance disputes for construction professionals, although Daniel is also instructed in many other sectors involving D&O, Professional Indemnity and Product Liability.
"I would like to congratulate Dan. His promotion is part of a wider plan for our firm and developing our own talented lawyers is critical to achieving our goals," said David Pryce Managing Partner.
Founded in 2010 Fenchurch Law is a specialist firm of City solicitors. They provide insurance advice, and handle insurance disputes. Based in the iconic Gherkin building in the heart of London Insurance Market, they represent policyholders with complex and high value coverage disputes with their insurers.
Fenchurch Law Ltd shortlisted for Insurance Law Firm of the Year Award.
Fenchurch Law Ltd has been shortlisted for the Insurance Law Firm of the Year in the prestigious Claims Awards 2015, which celebrate excellence and innovation in the general insurance claims sector.
The Insurance Law Firm of the Year Award recognises technical ability and the application of innovative ideas and customer service within legal services.
Managing Partner David Pryce commented: “We are very pleased to have been shortlisted for this award. Since founding Fenchurch Law in 2010, our aim has not only been to lead the market for complex policyholder coverage disputes in the UK but also to innovate in the interests of the policyholder and broker. Over the last 12 months we have put in place a number of unique funding arrangements for policyholders across the UK and secured over £9million in payments from insurers.”
Final winners will be announced at The Claims Awards evening at the Royal Garden Hotel in London on the 4th June.
Privy Council finds that a policyholder’s alteration of invoices submitted in support of an insurance claim did not constitute a “fraudulent device”
The case of Beacon Insurance Company Ltd v Maharaj Bookstore Ltd [2014] UKPC21 concerned an insurance claim arising from a fire and the insurance company’s rejection of that claim on the ground that part of it had involved fraudulent devices.
A fire at Marahaj’s premises had destroyed stock worth in the region of $750,000.00 Insurers refused indemnity on the basis that some of the invoices submitted in support of the insurance claim had been altered by the policyholder (the policy included an express condition that all benefit under the policy would be forfeit if any fraudulent means or device was used by the policyholder).
The trial judge accepted that the policyholder had altered certain invoices, but that the alterations had not been made for any fraudulent purpose or with any fraudulent intention. Rather that the stock in question had genuinely been purchased by the insured. The Court of Appeal allowed an appeal by the insurers, and the Privy Council has now overturned the Court of Appeal’s decision and reinstated the first instance decision in the policyholder’s favour.
In reaching its decision the Court emphasised that in the leading case on fraudulent devices (Agapitos v Agnew [2003] QB 556) it was made clear that a fraudulent device requires not only an intention that an action will improve the policyholder’s position in relation to the processing of a claim, but also that the policyholder’s intention is dishonest. As quoted by the Privy Council from the judgment of Mance LJ in Agapitos:
“a fraudulent device is used if the insured believes that he has suffered the loss claimed but seeks to improve or embellish the facts surrounding the claim by some lie (the Board’s emphasis).”
The Privy Council found that the Judge at first instance had been entitled to decide that the policyholder’s alteration of invoices submitted to the insurer was free of any dishonest intent. In the words of the Privy Council:
“while foolish, such tampering was far from conclusive evidence of dishonesty on [the policyholder’s] part”.
David Pryce comments on the case:
'Insurance law is technical and often counter intuitive. However, underpinning it is the basic principle that insurers should pay, promptly and in full, genuine claims made by honest policyholders. It is sometimes easy to forget that the technicalities and complexities of insurance law are all designed to meet that simple principle. This decision is another in an increasingly long line which show the Courts taking a pragmatic and flexible approach in order to keep that principle in the foreground where it belongs.'
Blanket Notifications and Declaratory relief: European Risk Insurance Company v McManus
Summary
The recent decision of the Court of Appeal of European Risk Insurance Company v McManus [2013] EWCA Civ 1545 upheld the first instance decision which refused to grant declaratory relief in relation to a firm of solicitors' blanket notification of claims to their professional indemnity insurer. The first instance decision also reinforces the position that blanket notifications will be construed in favour of the policyholder (which was not subject of the appeal).Read more
Clark v In Focus: There is only one cherry, and no second bite at it
Summary
Financial advisers across the country will be breathing a sigh of relief as they digest the Court of Appeal’s decision in Clark v In Focus, meanwhile consumers which have suffered losses in excess of the statutory limit of the Financial Ombudsman Service’s scheme have been given a stark warning: by all means accept the Ombudsman’s award, but the Courts will give you no second bite at the same cherry.Read more
Coles v Hetherton: implications for recovery actions
Just before Christmas, the Court of Appeal delivered the long-awaited judgment in the case of Coles v Hetherton [2013] EWCA Civ 1704. As anticipated, its conclusions are likely to have wide-reaching implications for the insurance industry and may impact on every level of case, from the modest county court claims that were the subject matter of Coles itself, to multi-million pound property damage disputes.