When does time begin to run when an insurer refuses indemnity under a third party liability policy?

William McIlroy Swindon Ltd, Rannoch Investments Ltd v Quinn Insurance Ltd
[2011] EWCA Civ 825

Quinn Insurance Limited (“the Insurer”) provided public liability insurance to one of the Claimants’ sub-contractors (“the Policyholder”). The Policyholder was sued by the Claimants in relation to a fire which occurred in 2006, and the Insurer refused indemnity under the public liability cover in February 2009 alleging that the Policyholder had been in breach of certain policy conditions.

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Court of Appeal decision on CFA success fees

Sousa v London Borough of Waltham Forest [2010] EWCA Civ 194

The Claimant suffered subsidence damage to his property caused by the roots of a tree which was owned by the Defendant. The Claimant claimed on his house insurance policy for the damage, and his insurer provided him with a full indemnity. The insurer then proceeded to exercise its right of subrogation and instructed a firm of solicitors who were to work under a collective conditional fee agreement.

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ECHR decision on Conditional Fee Agreements

In February 2001, the publisher of the Daily Mirror newspaper (‘MGN’) was sued by Naomi Campbell for breach of confidence and misuse of private information. At first instance, Ms Campbell was successful. The Court of Appeal overturned the decision in 2004 and subsequently, the House of Lords (as it then was) reinstated the first instance decision and Ms Campbell was awarded £3,500 in damages.

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FSA clarifies a policyholder's freedom to choose their own lawyer

Following the European Court of Justice’s decision in Erhard Eschig v UNIQA Sachversicherung AG (C-199/08), the director of the Financial Services Authority’s insurance sector has written to all legal expenses insurers to clarify the scope of s6 of the Insurance Companies (Legal Expenses Insurance) Regulations 1990, which deals with the freedom of a policyholder to choose their own lawyer.

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Quinn Insurance enters administration

Irish insurer Quinn Insurance, which has a substantial London Market presence, has gone into administration, leaving their policyholders in a potentially precarious position. Solicitors may be particularly at risk.

Quinn is reported to insure in the region of 2,000 firms of solicitors. However, if Quinn is removed from the Law Society's list of approved insurers (which only includes insurers which are able to meet certain criteria, including being solvent), those solicitors will be required to find alternative insurance elsewhere, or face being placed into the Assigned Risks Pool. In either case, policyholders are likely to find the cost of obtaining alternative insurance to be prohibitive.

Also under pressure as a result of Quinn entering administration are the insurance brokers who recommended that their clients buy policies from Quinn. So far as their clients incur additional costs as a result of having to find cover with alternative insurers or, in the worst case, if Quinn becomes unable to pay policyholders' claims, the brokers that placed insurance with Quinn are likely to face mis-selling claims from their clients.


Article from Post Magazine

For Post Magazine's comments on Fenchurch Law opening our doors, please click on the following link: http://www.postonline.co.uk/post/news/1593348/fenchurch-temple-tie


Our thoughts on the Jackson review

Lord Justice Jackson's review of litigation costs has two interrelated, but distinct strands. Firstly, he makes recommendations which are aimed at reducing the cost of the litigation process overall. Secondly, he makes recommendations which are aimed at shifting the burden of what costs remain from one place to another.

The first strand (reducing costs overall) is in the interests of both claimants and defendants, and Lord Justice Jackson's recommendations should be welcomed by everyone involved in the dispute resolution process.  However, Lord Justice Jackson's approach to the second strand (shifting the burden of what costs remain) is, in our view, of real concern.

At present, the cost of litigation is borne primarily by defendants whose actions have caused others (successful claimants) to suffer loss. Many of Lord Justice Jackson's recommendations will, if implemented in their current form, have the effect of shifting the costs burden from (unsuccessful) defendants to (successful) claimants.

The difficulty with this approach is that many defendants (employers, professional advisers, property owners etc) are able to spread the cost of any claims which they may face by insuring against them. In this respect, the defendants "stand together". Claimants, on the other hand, "stand alone", as we do not, in this country, have a viable market for allowing potential claimants (i.e. all members of the public) to insure against the risk of suffering a loss due to someone else's actions, and having to incur the cost of pursuing a claim.  As a result, whereas defendants are, in many cases, able to spread the cost of becoming involved in a dispute, claimants are unable to do so.

Unless commercially appropriate "before the event" insurance becomes widely available, the only way to spread the costs of the litigation process in a way that is financially manageable for those involved, is for those costs to be borne primarily by those who are able to stand together, as opposed to those who necessarily stand alone.

For these reasons, it is our view that the recommendations from the Jackson report which are aimed at shifting costs from one place to another are socially undesirable, and should be opposed.


Financial Services Bill progress

The Financial Services Bill is due to receive its second reading in the House of Lords (when all aspects of the bill will be debated) on 23.02.2010. In its current form the Government bill, which has so far remained intact throughout its progress through the House of Commons, proposes to allow consumers to join together to bring claims against FSA-regulated professionals (such as financial advisers and insurance brokers) in cases where there has been a mass failure of practice which has affected significant numbers of consumers. If the proposals become law, they will reduce the cost to consumers of making claims against financial services professionals which arise out of endemic (as opposed to "on-off") mistakes or bad advice.

We'll be tracking the progress of the bill until it receives Royal Assent on the Fenchurch Law twitter feed.


Fenchurch Law twitter feed

The Fenchurch Law twitter feed is now live!  From now on, we'll be tweeting daily, helping to keep you up to date on new developments in the law relating to professionals and insurance.  We'll be highlighting key cases and changes to the CPR, and we'll also be keeping tabs on ongoing processes such as the Law Commissions' review of insurance contract law, and the follow-ups to Lord Justice Jackson's report on costs.