Fenchurch Law awarded “Gold” for client care experience
We’re delighted to announce that Fenchurch Law has achieved a ‘gold’ award from the independent Investor in Customers (IIC) assessment process for a fourth year running.
IIC is an independent client experience agency which conducts client experience assessments, helps develop insights into client satisfaction, and awards annual accreditations. IIC also compares the views of staff and senior management to identify how embedded the customer is within the company’s thinking.
Comments from Fenchurch Law clients included:
“They have always been a solid, consistently high-quality business, who add genuine value for policyholders”.
“I have been very impressed by Fenchurch Law in all my dealings with them. I particularly value the fact that, unlike the majority of the large law firms, they never act for insurers and accordingly there is no conflict of interest”.
“Fenchurch Law is clearly passionate about what it does. They have given invaluable advice to me and my clientele and I would recommend and have recommended them to many clients and contacts”.
“Great to have a customer facing law firm with the level of expertise Fenchurch Law has”.
“The service that they offer is a real value add to my clients so a great strategic partnership”.
Sandy Bryson, Director at IIC, commented: “Investor in Customers has been working with Fenchurch Law for 4 consecutive years. Every year, the firm has demonstrated that it provides its clients with an exceptional experience attaining IIC’s highest award for client experience, Gold, each time. There is, and always has been, a genuine passion and culture within the whole Fenchurch Law team to continue to improve its service to all its clients and to consistently deliver the highest quality outcomes for them. It is such a pleasure to work with the firm.”
David Pryce, Managing Director at Fenchurch Law added: “Providing an exceptional service is one of our key principles. Improving outcomes for our policyholder clients is number one priority and we are confident that the IIC process will help us improve every aspect of our service in the future”.
Webinar - Virtual Coverage Symposium
A series of short topical sessions on a variety of insurance coverage issues. This virtual event is aimed at providing brokers with information on common coverage issues and tips on how to avoid them arising.
Session 1: Excess layer insurance
Session 2: Key exclusions in Construction All Risks insurance
Session 3: Reinstatement: when is it the appropriate measure of indemnity?
Session 4: Cover for COVID-19 under BI & other policies
Fenchurch Law expands property coverage disputes team
Fenchurch Law, the leading UK firm working exclusively for policyholders and brokers on complex insurance disputes, has appointed Nicola Bowen as an associate in its Property Risks practice group.
Nicola has spent a number of years working in insurance litigation with a specific focus on property related matters. She has acted for leading insurers on first party and liability claims disputes and complex defendant matters. She has also acted jointly for insurers and their insureds in a number of large subrogated recovery actions.
Nicola joins Fenchurch Law from BLM, where she was a solicitor in their property damage team and was previously a property damage solicitor with DAC Beachcroft.
Joanna Grant, partner and head of the Property Risks group practice at Fenchurch Law, said: We are delighted to welcome Nicola whose dedicated property damage litigation experience expands the coverage disputes capabilities the team can offer our clients.”
Nicola Bowen is an associate at Fenchurch Law
Fenchurch Law celebrates a hat-trick!
Fenchurch Law, the leading UK firm working exclusively for policyholders and brokers on complex insurance disputes has received its third consecutive ‘gold’ award from customer experience experts, Investor in Customers (IIC).
There were many complimentary comments from their happy clients, some of which included:
• “Fenchurch provide myself, my team and my clients with an excellent service and give an honest and balanced response. I rate them as the best in the business.”
• “Service focused, excellent knowledge, great at communicating sometimes difficult points.”
• “I believe the firm offers a unique service in this market and hence is vital to a number of clients.”
• “The service we receive from Fenchurch Law is second to none so we would have no hesitation whatsoever in recommending them to any client - in fact we actively do recommend them.”
• “They offer offer a service that is quick, personable and professional. I would add that they know my industry back to front.”
IIC is an independent assessment organisation that conducts rigorous benchmarking exercises. These exercises determine the quality of client service and relationships across several dimensions, including how well a company understands its clients, how it meets their needs and how it engenders loyalty. IIC also compares the internal views of staff to identify how embedded the client is within the company’s thinking.
Sandy Bryson, Director at Investor in Customers commented: “I am absolutely delighted for the whole Fenchurch Law team. They are rightly thrilled and proud to have achieved a third consecutive IIC Gold award, evidencing that they continue to provide their clients with an exceptional experience. The firm clearly cares deeply about its clients and its employees. The Fenchurch Law management team has embedded a culture of continuous improvement within the firm and they are passionate about making the marginal improvements identified within the IIC report to improve further still. They are a genuine pleasure to work with.”
David Pryce, Managing Partner of Fenchurch Law added: “Providing an exceptional level of client service is something that the whole team at Fenchurch Law cares deeply about. But we know we can always do better, and Investor in Customers give us the insights and the tools to help us keep improving our clients’ experience”.
Fenchurch Law expands coverage dispute team with Le Marquer appointment
Fenchurch Law, the leading UK firm working exclusively for policyholders and brokers on complex insurance disputes, has appointed Aaron Le Marquer as partner expanding its capabilities and international expertise.
Aaron specialises in insurance disputes for policyholders with a focus on product liability and recall and complex international losses. His experience extends to all commercial lines of business and he has handled many significant London market losses and represented manufacturers and insurers in high-profile cases in the tobacco, automotive, consumer electronics, pharmaceutical, and medical device sectors.
He joins Fenchurch Law from Tilleke & Gibbins, a leading Southeast Asian regional law firm, where he established a leading insurance practice and subsequently became a partner based in Thailand. Previously, he was assistant general counsel for Asia Pacific with AIG in Singapore. He originally trained and practised as an insurance and product liability lawyer with City and US firms based in London.
Managing Partner of Fenchurch Law, David Pryce said: “The start of 2020 marks a period of growth in our capabilities. Aaron is recognised for his insurance disputes work in Asia and now brings this substantial experience acting for policyholders and brokers on large scale and complex claims disputes together with strong insurance industry expertise and multi-jurisdictional experience. There is no doubt both Fenchurch Law and our clients will benefit significantly from his appointment. We will be making further announcements about the expansion of our team in the coming weeks.”
Fenchurch Law launches "The Associate Series"
Fenchurch Law’s new initiative, The Associate Series, is being launched with a view to sharing our knowledge and experience of coverage disputes with junior-mid level brokers. In doing so, we hope to enhance brokers’ ability to add value to their portfolios.
Fenchurch Law are specialists in coverage disputes. We act exclusively for policyholders and work shoulder-to-shoulder with (and never against) brokers.
The associates, whose specialisms span across a number of classes of insurance, are now sharing their expertise to assist junior-mid level brokers and claims handlers in their own careers. The associates are well-placed to do so as coverage specialists with prior experience as either brokers or insurer-side lawyers.
The Associate Series will enable us to share our knowledge and encourage you to cultivate relationships. Talks are being delivered to brokers across the UK between now and Christmas, with more seminars being planned for 2020.
The (free!) talks will be no more than 30 minutes each and focus on practical issues affecting the junior-mid tier. The fact that the talks are being delivered by your peers will, it is hoped, allow for relaxed interactive sessions.
The menu of talks will be regularly updated to reflect market developments but retain some core topics. The current menu is:
- Notification
- Coverage Disputes 101
- Damages for late payment
- A claims handler, broker and lawyer’s perspective
- Property Risks
- Third Party Rights against Insurers
- D&O
- Combustible cladding
- Contractors and traps for their brokers
Some of these talks will also be the subject of webinars, and there will be regular blogs looking at issues and trends in the market. Keep an eye out for our events and material!
If you have any queries about The Associate Series please contact James Breese on 020 3058 3075 or via james.breese@fenchurchlaw.co.uk.
Fenchurch Law adds Goodship to Construction Risks team
Fenchurch Law, the leading UK firm working exclusively for policyholders and brokers on complex insurance disputes, has appointed Rob Goodship as an associate further expanding its coverage dispute team capabilities.
Rob specialises in insurance disputes and has considerable experience in property damage, construction and professional indemnity coverage issues. He joins Fenchurch Law from Kennedys where he was an associate in their property, energy and construction team.
He has acted for several leading insurers in relation to coverage disputes across a broad range of first party and liability claims, as well as defending claims against professionals. He has also acted jointly for insurers and their insureds in a number of large subrogated recovery actions.
Managing Partner of Fenchurch Law, David Pryce said: “Rob is an experienced insurance litigator and his background in advising both insurers and insureds in coverage disputes in some of our core business areas, makes him an important addition to what is the UK’s largest team of policyholder–focused insurance disputes solicitors”.
Rob Goodship is an associate at Fenchurch Law
The Good, the Bad & the Ugly: 100 cases every policyholder needs to know. #7 (The Good). Woodford and Hillman -v- AIG
Welcome to the latest in the series of blogs from Fenchurch Law: 100 cases every policyholder needs to know. An opinionated and practical guide to the most important insurance decisions relating to the London / English insurance markets, all looked at from a pro-policyholder perspective.
Some cases are correctly decided and positive for policyholders. We celebrate those cases as The Good.
Some cases are, in our view, bad for policyholders, wrongly decided, and in need of being overturned. We highlight those decisions as The Bad.
Other cases are bad for policyholders but seem (even to our policyholder-tinted eyes) to be correctly decided. Those cases can trip up even the most honest policyholder with the most genuine claim. We put the hazard lights on those cases as The Ugly.
At Fenchurch Law we love the insurance market. But we love policyholders just a little bit more.
#7 (The Good)
Woodford and Hillman -v- AIG [2018] EWHC 358
There are few cases dealing with coverage issues under D&O policies. This isn’t necessarily because D&O policies are rarely the subject of dispute. It is more likely a reflection of the fact that if directors have to fund hefty legal costs in defending complex civil, criminal or regulatory actions because insurers are being difficult about costs or refusing outright to pay them, their personal finances are depleted to the point where suing the insurer is out of the question (and the Financial Ombudsman’s service is no help because that avenue of remedy is closed off to company directors). The consequence is that insurers’ obligations to fund defence costs are rarely scrutinised in court.
Occasionally, though, directors will take D&O insurers on, notwithstanding the power imbalance and the personal financial risk. Two such directors were Mr Woodford and Mr Hillman. They had been directors of the Olympus Corporation. They left in 2011 when Mr Woodford blew the whistle on a financial scandal.
In 2015 Olympus launched proceedings against them in the High Court in London for £50m, claiming that their involvement in an Executive Pension Scheme while at Olympus breached their duties as directors.
Olympus had D&O cover which covered past directors. Woodford and Hillman notified the claim to the D&O insurers, AIG, seeking an indemnity.
AIG’s resistance to Defence Costs
AIG refused to fund Woodford and Hillman’s defence costs (£4m and counting) claiming they were not reasonable. The policy was governed by German law but disputes fell to be determined in England.
The D&O policy made AIG liable for legal defence costs “provided these are reasonable with regard to the complexity and significance of the case”.
AIG argued that their liability for costs should be determined by a costs assessment. This is an assessment by a costs judge, normally undertaken when litigation ends, to determine how much of the winning party’s costs the loser should pay. The costs judge very critically examines the costs being claimed. The party whose costs are being assessed should expect to take a hair-cut on their recovery. A discount of 30% is not unusual and full recovery is very unlikely. On any view, therefore, a referral to costs assessment, as insisted on by AIG, would have involved Woodford and Hillman being left significantly out of pocket.
The Judge held that a costs assessment was not the right way to determine AIG’s liability for defence costs. Such an assessment was appropriate at the end of litigation as part of the court’s general discretion in relation to costs. An indemnity for defence costs under a D&O policy was “very different”. The Judge said that an insurance policy is intended to indemnify the directors for defence costs. Indemnity was a contractual right which meant that the court had no inherent discretion in relation to such costs. This meant that the (discretionary) costs assessment process had no application.
Instead, the court should assess the right to defence costs in the same way it would assess any issue of quantum. The criteria set out in the policy was that the costs were payable if “reasonable with regard to the complexity and significance of the case”.
The basis for the assessment of the “complexity and significance” of the case faced by the insureds was that it:
- would involve a three-week High Court trial;
- dealt with complex issues in a specialist area of law (pensions);
- was for a significant sum (£50m);
- had reputational significance for insureds because of the seriousness of the allegations.
AIG’s particular objection was to the charge-out rates of the insureds’ city lawyers: £508 for partners and senior lawyers; £389 for mid–level lawyers and £275 for junior lawyers. The Judge held that the complexity and significance of the matter meant it was reasonable to use a City firm at the rates charged. The Judge rejected AIG’s suggestion that the Guideline Hourly rates published by the Court Service for use in a costs assessment (rates significantly lower than City lawyers charge) had no application.
AIG’s determined resistance to paying the fees did not stop there. They complained of duplicated work, excessive billing, failure to delegate appropriately, churning of costs (an allegation that AIG dropped) and engagement of two QC’s. The Judge found that the QC appointments were reasonable in the context, the fees were reasonable and AIG’s other complaints were unsubstantiated.
Woodford and Hillman were awarded all their defence costs: they had been incurred reasonably in view of the complexity and significance of the case against them.
Implications
It is standard for a D&O insurer’s liability for costs to be qualified on grounds of reasonableness. It is now clear that an insurer’s attempts to call in aid the cost assessment process with a view to chipping away ultra-critically at the defence costs claimed by insureds should not work and there are better prospects of the directors’ outlay on defence costs being matched by insurance cover. Insureds now have a case to use when firing back at insurers’ attempts to lowball them, giving them some hope of prising the insurer’s purse open that little bit wider.
Enterprise Act Angle
Woodford and Hillman had to fund their defence costs from their pension funds because the D&O insurer was not responding. They incurred significant tax consequences as a result. Had the policy been governed by English law (and had it been taken out after May 2017) they may also have had a claim against AIG for damages for breach of the obligation to pay claims within a reasonable time (an obligation introduced by the Enterprise Act 2016) equal to the tax charge they suffered as a result of accessing their pension funds. Application of the Enterprise Act might have had an impact on the insurer’s approach to the case.
John Curran is a partner at Fenchurch Law
The Good, the Bad & the Ugly: 100 cases every policyholder needs to know. #6 (The Bad). Orient-Express Hotels v Generali
Welcome to the latest in the series of blogs from Fenchurch Law: 100 cases every policyholder needs to know. An opinionated and practical guide to the most important insurance decisions relating to the London / English insurance markets, all looked at from a pro-policyholder perspective.
Some cases are correctly decided and positive for policyholders. We celebrate those cases as The Good.
Some cases are, in our view, bad for policyholders, wrongly decided, and in need of being overturned. We highlight those decisions as The Bad.
Other cases are bad for policyholders but seem (even to our policyholder-tinted eyes) to be correctly decided. Those cases can trip up even the most honest policyholder with the most genuine claim. We put the hazard lights on those cases as The Ugly.
At Fenchurch Law we love the insurance market. But we love policyholders just a little bit more.
#6 (The Bad)
Orient-Express Hotels v Generali
Business interruption (BI) policies in the UK ordinarily provide for recovery of loss caused by physical damage to property at the insured premises, subject to adjustment to reflect other factors that would have affected the business in any event.
In Orient Express Hotels Ltd v Assicurazioni Generali SPA t/a Generali Global Risk [2010] EWHC 1186 (Comm), the Commercial Court held that the ‘but for’ causation test applies under standard BI policy wordings where there are two concurrent independent causes of loss, and there could be no indemnity for financial loss concurrently caused by: (1) damage to the insured premises - a luxury hotel in New Orleans, and (2) evacuation of the city as a result of Hurricanes Katrina and Rita.
Orient Express Hotels Ltd (OEH) was owner of the Windsor Court Hotel (the Hotel), which suffered significant hurricane damage in August and September 2005 leading to its closure for a period of two months. The surrounding area was also devastated by the storms, with the entire city shut down for several weeks following the declaration of a state of emergency, and the imposition of a curfew and mandatory evacuation order.
A dispute arose concerning the interpretation of OEH’s BI policy (subject to English law and an arbitration provision), which provided cover for BI loss “directly arising from Damage”, defined as “direct physical loss destruction or damage to the Hotel”. The trends clause provided for variations or special circumstances that would have affected the business had the Damage not occurred to be taken into account, “so that the figures thus adjusted shall represent as nearly as may be reasonably practicable the results which but for the Damage would have been obtained during [the indemnity period]”.
The arbitral Tribunal held that OEH could only recover in respect of loss which would not have arisen had the damage to the Hotel not occurred, and this meant that OEH was to be put in the position of an owner of an undamaged hotel in an otherwise damaged city. Since New Orleans itself was effectively closed for several weeks due to widespread flooding, with no-one able to visit the area or stay at the Hotel even if it had (theoretically) been undamaged, OEH could not recover under the primary insuring provisions for BI loss suffered during this period. A limited award of damages was made under separate Loss of Attraction and Prevention of Access extensions to the policy.
OEH appealed to the Commercial Court, arguing that the Tribunal’s approach was inappropriate given the wide area damage to the Hotel and the vicinity caused by the same hurricanes. OEH sought to rely upon principles established in: Miss Jay Jay [1987] and IF P&C Insurance v Silversea Cruises [2004], that, where there are two proximate causes of a loss, the insured can recover if one of the causes is insured, provided the other cause is not excluded; and Kuwait Airways Corpn. v Iraqi Airways Co. [2002], that, where a loss has been caused by two or more tortfeasors and the claimant is unable to prove which caused the loss, the Courts will occasionally relax the ‘but for’ test and conclude that both tortfeasors caused the damage, to avoid an over-exclusionary approach.
Mr Justice Hamblen dismissed the appeal, concluding that no error of law had been established in relation to the Tribunal’s application of a ‘but for’ causation test under the policy on the facts as found at the arbitration hearing, whilst recognising “as a matter of principle there is considerable force in much of OEH’s argument”. The insurance authorities mentioned above were distinguished as involving interdependent concurrent causes, in which case the ‘but for’ test would be satisfied. The Court did appear to accept that there may be insurance cases where principles of fairness and reasonableness meant that the ‘but for’ causation test is not applicable, but OEH was unable to establish an error of law by the Tribunal where this argument had not been raised at the arbitration hearing. Given these evidential constraints on an appeal limited to questions of law, OEH was unsuccessful in the Commercial Court.
Permission to appeal was granted, indicating that the Court considered OEH’s grounds for further challenge had a real prospect of success. Settlement on commercial terms was agreed between the parties prior to the Court of Appeal hearing.
The decision in this case has been criticised by commentators as unfair, giving rise to the surprising result that the more widespread the impact of a natural peril, the less cover is afforded under the policy. Leading textbooks (including Riley on Business Interruption Insurance and Hickmott’s Interruption Insurance: Proximate Loss Issues) express concern at this unsatisfactory outcome, noting that the ‘windfall loss’ applied by Generali under the trends clause during the period when OEH itself was affected by its own damage did not reflect the approach adopted by insurers following, for example, the earlier London bombings, or severe flooding in Cumbria in 2009. We consider that that the true intention of the London market was that, in the event of wide area damage, claims would be met up to the level that would have applied had the damage been restricted solely to the insured’s own property at the premises.
In our view, the approach taken by the Tribunal and upheld by the Commercial Court in this case is wrong in principle. It is hoped that an opportunity will arise for the English Courts to revisit this issue and adopt a fairer approach to indemnity under standard UK wordings, to remedy the potential injustice for policyholders. In the meantime, those taking out BI policies should seek amendment of the trends clause to provide for the policyholder to be put in the position they would have been “but for the event(s) causing the damage” (instead of “but for the damage to insured premises”), and to agree sufficient limits of indemnity under extensions for Loss of Attraction and Prevention of Access.