Fenchurch Law opens new office in Leeds
Fenchurch Law, the UK’s leading firm of solicitors specialising exclusively in representing policyholders in insurance coverage disputes, is delighted to announce its further expansion with the opening of a new office in Leeds from 1 September 2020, which will provide improved access to policyholders in the North of England, and their insurance brokers.
Founded in 2010, Fenchurch Law was created to allow policyholders access to specialist and high quality insurance advice that insurers have received for decades.
Fenchurch Law is now the largest specialist team of solicitors in the UK dedicated to serving the needs of policyholders. We focus exclusively on representing policyholders in insurance coverage disputes, specialising in high value and complex disputes.
The firm comprises five main practice areas, each of them partner-led by lawyers with a reputation for innovation and excellent client care:
· Professional Risks
· Financial & Commercial Risks
· Construction Risks
· Property Risks, and
· Products & Environmental Risks
Whilst Fenchurch Law has always acted for policyholders across the UK, as well as internationally, we have recognised an increasing demand among policyholders based in the North of England to have access to solicitors who are based closer to them. Our Leeds office has been launched in response to that demand.
David Pryce, Fenchurch Law’s Managing Partner is excited about the next stage of the firm’s expansion:
“For some time we’ve recognised not only that policyholders outside London often like to be able to instruct solicitors who are based closer to them, but also that there is a great pool of talented insurance disputes solicitors who are based outside the City. The launch of our Leeds office is the first step in helping to connect policyholders in the regions with solicitors who are not only based near them, but are genuine insurance disputes specialists with deep insurance market knowledge and experience”.
The Leeds Office will be headed up by Senior Associate, Daniel Robin. Dan has wide ranging experience of the insurance market, having previously worked as a panel solicitor for insurers, as a broker, and as a claims handler for insurers. He now uses his knowledge of how insurers operate to help policyholders to achieve the best outcomes from their insurance disputes. Dan has a particular focus on professional liability, property and financial lines risks.
Working alongside Dan is Phil Taylor, Insurance Consultant. Phil joined Fenchurch Law after 15 years in Broking as Regional Claims Director dealing with a wide portfolio of Clients, major and complex losses, and coverage disputes on first and third party claims. Prior to Broking, Phil’s background was Liability Loss Adjusting specialising in EL, PL, Products and Professional Indemnity claims. Phil has 35 years of experience in the insurance industry, is ACII qualified, and holds Chartered Status with the CII.
Consumer Insurance - A reminder of your rights and why you should not “avoid” fighting back
Consumer insurance accounts for a large percentage of insurance purchased in the United Kingdom. It is therefore unsurprising that many insurance disputes involve consumers, and the implications for an individual who has a claim declined can be catastrophic.
A recurring issue is an insurer avoiding a policy for an alleged non-disclosure or misrepresentation. Our experience is that, in a worryingly large number of cases, insurers appear to rely on a consumer’s lack of knowledge and resources to properly challenge the avoidance. In other words, Insurers raise with a consumer what appears to be an unanswerable case and present a declinature/avoidance as a fait acompli. However, in reality, the matter is very rarely as clear cut as the Insurer seeks to present.
The Financial Ombudsman Service (which is available to all consumers) has recently increased the size of the awards it can make from £150,000 to £350,000. It is, therefore, now even more important for consumers to be familiar with their obligations and rights in relation to their insurance policies given the wider scope of cost-free redress.
The Law
The Consumer Insurance (Disclosure and Representation) Act 2012 (CIDRA) came into force on 6 April 2013, and applies to all insurance policies which began or were renewed after that date. CIDRA applies to all types of insurance where the policyholder is acting in a personal (as opposed to commercial) capacity.
CIDRA governs the duties of consumers prior to inception of an insurance policy. It was introduced to address the vulnerability of consumers based on outdated law which imposed an unfair disclosure burden on them.
While CIDRA has been in force for a number of years, the more recent Insurance Act 2015 (“the Insurance Act”) has increased awareness both within and outside of the insurance market of the obligations of policyholders before entering into an insurance policy. As a result, CIDRA and the Insurance Act are often confused (by both policyholders and insurers). While there are similarities between them, particularly in relation to the remedies available to an insurer for non-disclosure disclosure, it is important for consumers to have an understanding of CIDRA because it is even more favourable to them than the Insurance Act.
CIDRA: Duty of Disclosure
Prior to CIDRA, if a consumer had either given incorrect information or failed to disclose something important to an insurer when applying for insurance, the insurer could “avoid” the policy (effectively cancelling the policy and treating it as if it had never existed). A heavy burden rested on the consumer (who had a duty of “utmost good faith” towards the Insurer) to disclose to an insurer all material facts. This duty was particularly onerous for unadvised individuals who purchased insurance directly from an insurer or through, for example, price comparison websites without the assistance of a broker.
CIDRA replaced this onerous burden with a new “duty to take reasonable care not to make a misrepresentation”. The effect was that a consumer was no longer obliged to volunteer information to an insurer, but rather to take care not to answer any of the insurer’s questions incorrectly.
The bottom line for individuals who have had a claim declined is that it is not enough for an insurer to establish that an incorrect answer was given to it when the policy was simplywritten - under CIDRA, that is only the first hurdle the insurer needs to overcome.
The insurer must also prove that the consumer failed to take “reasonable care” when making the misrepresentation and that, if the correct information had been given, the insurer would either not have written the policy on any terms at all, or would have written it on different terms or with a different premium. A misrepresentation which would have caused the insurer to act differently is referred to in CIDRA as a “qualifying misrepresentation”.
Alternatively, In order to avoid the policy and retain the premium, the insurer will need to show that the consumer acted deliberately or dishonestly in making a misrepresentation.
If the insurer cannot show that, but can show that there was a qualifying misrepresentation, the insurer will be entitled to a proportionate remedy. If it can show that it would not have written the policy at all, it can avoid the policy but must return the premium. If it would have written the policy on different terms, the policy may be amended to reflect those terms. If it would have charged a higher premium, the insurer is entitled to proportionately reduce the amount it pays on a claim by reference to any such hypothetical premium.
The bottom line for consumers
The overarching point for consumers to remember is that the burden is on the insurer to prove:
1. The consumer failed to take “reasonable care” not to make a misrepresentation;
2. If he/she did, that the misrepresentation is a “qualifying misrepresentation”; and
3. That the Insurer is entitled to the appropriate remedy.
Given the heavy burden on the insurer under CIDRA, consumers faced with the avoidance of their policies should not avoid fighting back, particularly now that the Financial Ombudsman Service has a much wider remit to consider larger disputes. In fighting back, and availing themselves of the Ombudsman’s enlarged jurisdiction, consumers may find that an insurer’s confidence in its position is, when properly scrutinised, rather misplaced.
Daniel Robin is an associate at Fenchurch Law