Archive for the ‘Professional Indemnity’ Category
Thursday, February 9th, 2012
The Ministry of Justice has finally announced its proposals following its County Court consultation last year.
The Small Claims limit goes up to £10,000. There will be mandatory mediation sessions in the Small Claims Court. The portal limit for RTA claims will be extended to £25,000 with possible extension to EL and PL claims following further consultation. The fast track limit will remain the same. The government has abandoned mandatory mediation information sessions and pre actions directions – this is good news as the proposals would only have introduced a further layer of costs!
The government says it wishes to consult further on the question of fixed costs so that they can be extended and in particular to higher value personal injury claims. It will also look at pre-action protocols to see if these can be improved. So two years on, we are still debating the issues. What we need most is certainty and clarity. The sooner this debate comes to an end the better!
Posted by Nichola Evans, who specialises in professional indemnity work, directors and officers, legal expenses insurance, conditional fee agreements and after the event insurance and commercial litigation.
Nichola Evans
020 7337 1019
nevans@brownejacobson.com
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Rating: 0.0/10 (0 votes cast)
Tags: county court consultations, EL Claims, insurance claims, mediation, Ministry of Justice, personal injury, PL Claims, pre-action protocol, RTA Claims
Posted in Insurance, Professional Indemnity | No Comments »
Wednesday, January 25th, 2012
The Law Society and the Solicitors’ Regulation Authority (SRA) have been given permission to intervene in Godiva Mortgage Limited v Travelers Insurance Company Limited. The issue is the extent to which insurers’ liability to cover multiple claims against a solicitors’ practice may be limited by aggregating them as one claim.
The current position which appears to allow large numbers of claims to be aggregated was arrived at after a decision by the SRA to shift the goal posts in favour of the insurers by altering the aggregation clause in the Minimum Terms and Conditions in 2005. It is now obviously felt that the Insured solicitors, their clients (and in cases of dishonesty, the Solicitors’ Compensation Fund) are insufficiently protected.
Further clarity on the wording is needed to allow underwriters to assess accurately the risks and fix premiums. This may result in solicitors (and other professionals) insisting on certain wordings in their primary policies, driven in all likelihood by their clients, especially mortgage lenders.
Posted by Jim Hobsley, who specialises in professional indemnity claims involving a wide range of professionals including accountants, surveyors, solicitors and barristers; experienced in policy coverage disputes.
Jim Hobsley
0207 337 1011
jhobsley@brownejacobson.com
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Tags: insurance, law society, liability, mortgage lenders, professional indemnity, public liability claims, solicitors regulation authority
Posted in Insurance, Professional Indemnity | No Comments »
Friday, November 25th, 2011
The case of Fortune v Roe has re-visited the question of success fees and what the correct success fee ought to be if certain risks are removed from the litigation.
In this case the Claimant had been involved in a very serious car accident but by the time she entered into a CFA liability had been admitted and judgment entered for damages to be assessed. The CFA provided for a success fee of 100%. Sir Robert Nelson found that there was no risk to the recovery of charges to the solicitor and there could not be said to be a litigation risk. Therefore the only risk was of receiving no costs after beating a Part 36 offer and the success fee would represent compensation for that. As a result the court found that a success fee of 100% could not be justified and the figure of 20%, awarded by the first instance judge was upheld.
This shows the importance of getting the risk assessment on the CFA right. If it’s not an accurate assessment then we can expect the courts to get involved – with cost consequences!
Posted by Nichola Evans, who specialises in professional indemnity work, directors and officers, legal expenses insurance, conditional fee agreements and after the event insurance and commercial litigation.
Nichola Evans
020 7337 1019
nevans@brownejacobson.com
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Rating: 0.0/10 (0 votes cast)
Tags: cfa, insurance, litigation, litigation costs, Part 36, professional indemnity, risk assessments, success fees
Posted in Insurance, Litigation, Professional Indemnity | No Comments »
Friday, September 30th, 2011
Hot on the heels of yesterday’s announcement (29 September 2011) that only 60 babies were adopted last year, comes the news that the number of children in care in England has increased to 65,520.
Monitoring these placements is not easy, it involves social workers working with multidisciplinary teams and families to try and work out what is best for each child. We are seeing an increasing number of claims arising out of such placements (and indeed failure to make such placements). To defend each claim we have to read lots of paper and electronic documents. We also need to spend valuable hours with practitioners so that we can explain what Social Work Practice means on the ground, and why decision making is not simple. The amount of time this involves is breathtaking yet quite often the value of the claim relatively low.
Sadly my view is that Social Workers may, like health professionals, have to become used to the idea that giving evidence in professional negligence claims is simply part of the job. Employers can make that change of culture easier by providing regular training and support.
Posted by Sarah Erwin-Jones, who specialises in social services, the care sector, education and negotiating legal costs; advises on risk management issues including data protection matters.
Sarah Erwin-Jones
0115 976 6136
serwin@brownejacobson.com
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Rating: 10.0/10 (1 vote cast)
Tags: browne jacobson, child protection, children in care, Claims, local authorities, professional negligence, professional negligence claims, Public Sector, safeguarding, sarah erwin-jones, Social Care, social work practice, training social workers
Posted in Professional Indemnity, Public Sector, Social Care | No Comments »
Friday, September 16th, 2011
The Commercial Court last week in Capita AFS (Guernsey) Ltd v Drivers Jonas ruled against the defendant firm of valuers, awarding damages of £18.05m.
Drivers Jonas were found to have negligently over-stated the commercial prospects and value of a factory outlet shopping centre in Kent.
One of the salutary warnings to emerge from the decision is that professionals are likely to be in breach of duty if they take on jobs beyond their capability or experience. In this case, the Judge gave very short shrift to the valuers’ protests that (1) the client knew all about the defendants’ lack of expertise in any event and (2) there was scope to acquire the necessary experience ‘on the job’.
What the valuers should have done – at the outset – was decline to act (or at least advise that the necessary expertise be commissioned from elsewhere!)
Drivers Jonas’ PI insurers are understood to be looking at an appeal in this matter.
Posted by Nik Carle, who specialises in professional negligence and insurance coverage disputes; deals with claims against advisers in the IT, legal, property, media and financial services’ sector.
Nik Carle
0115 976 6143
ncarle@brownejacobson.com
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Rating: 5.5/10 (2 votes cast)
Tags: drivers jonas, insurers, professional indemnity, professional negligence
Posted in Professional Indemnity | No Comments »
Friday, August 5th, 2011
The Civil Justice Council are to put together a working party to develop practical proposals on the back of the Government’s plans following Lord Justice Jackson’s review of civil litigation costs.
The working party will look at implementing secondary legislation, focusing on qualified one way cost shifting, the introduction of additional sanctions and rewards under Part 36 as well as the detail of the proportionality test and when the test should not be applied.
Crucially, the party will not be considering the government’s original policy objectives but focusing instead on the practicalities of introducing these measures.
The working party are expected to complete papers on these proposals by the end of September this year.
Insurers will be interested to note that representatives from key civil law areas affected by the proposals will be invited by the CJC to attend and provide feedback at a workshop expected to take place in October.
Posted by Nichola Evans, who specialises in professional indemnity work, directors and officers, legal expenses insurance, conditional fee agreements and after the event insurance and commercial litigation.
Nichola Evans
020 7337 1019
nevans@brownejacobson.com
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Rating: 0.0/10 (0 votes cast)
Tags: civil justice council, Civil Litigation Costs, civil litigation reforms, cjc working party, lord justice jackson, one way costs shifting, Part 36, professional indemnity, proportionality test
Posted in Professional Indemnity | No Comments »
Wednesday, July 27th, 2011
“It makes no sense to think that an insured may have become time-barred in a claim … before … he has any cause of action to bring it”. Sounds obvious but that wasn’t the High Court’s approach when it upheld a time-bar clause in McILroy. The public liability policy provided that the insured must refer any dispute about the insurer’s “liability in respect of a claim” to arbitration within 9 months or the claim was deemed abandoned. At first instance, the insurer successfully relied on the fact that proceedings were not issued until after 9 months from its refusal to indemnify for breaches of condition precedent.
The Court of Appeal has now overturned that decision because the High Court ignored the long-standing principle that liability under an indemnity policy is not triggered until the existence and extent of liability to the third party is established (Post Office v Norwich Union (1967)).
Therefore, in dispute resolution clauses, “claim” means “crystallised claim”.
Posted by Jonathan Newbold, who specialises in professional negligence, financial services and commercial dispute resolution; advises insurers on policy wording and coverage matters.
Jonathan Newbold
0115 976 6581
jnewbold@brownejacobson.com
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Rating: 0.0/10 (0 votes cast)
Tags: Claims, Court of Appeal, crystallised claim, High Court, insurance, McIlroy, Post Office v Norwich Union (1967), public liability policy, time-bar clause
Posted in Insurance, Professional Indemnity | No Comments »
Tuesday, June 21st, 2011
The process of reforming the legal funding regime began in earnest today with the publication of the Legal Aid, Sentencing and Punishment of Offenders Bill.
Well we’ve waited and waited and now we’ve seen the Bill. And? Well it’s still an anti climax and leaves some uncertainty. Whilst it is envisaged that success fees and after the event premiums will not be recoverable from a losing party in civil proceedings, we’ll have to wait for Order of the Lord Chancellor to find out the detail.
Success fees will be subject to a maximum limit and will apply only to the damages specified by the Lord Chancellor. It’s also made clear that this will not apply retrospectively. We also have the introduction of damages based agreements, aka contingency fees.
Given that matters will now be dealt with by the Lord Chancellor will we now see a judicial review of this issue? When will we finally receive a timescale for the implementation? This state of flux is confusing and unhelpful for everyone.
Posted by Nichola Evans, who specialises in professional indemnity work , directors and officers, legal expenses insurance, conditional fee agreements and after the event insurance and commercial litigation.
Nichola Evans
0207 337 1019
nevans@brownejacobson.com
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Rating: 10.0/10 (1 vote cast)
Tags: after the event insurance, conditional fee agreement, legal aid, lord justice jackson, success fees
Posted in Professional Indemnity | No Comments »
Friday, June 17th, 2011
The much anticipated decision in the case of Scullion v Bank of Scotland t/as Colleys was handed down this morning by the Court of Appeal.
In overturning the first instance decision, it was held that the valuer of a residential property does not owe a duty of care to a borrower if he was instructed by a commercial lender and the borrower is a buy-to-let investor. In reaching this decision, the Court of Appeal has ruled that there is a distinction between ‘standard’ purchasers (to whom a duty is owed, even if the valuer was instructed by the lender) and buy-to-let investors.
This decision will be welcomed by valuers and their insurers, who will have been concerned by the first instance decision, which sought to widen the scope of the principle in Smith v Bush, increasing claim numbers in a sector that has already been badly hit by the downturn in the housing market.
Posted by Tim Johnson, who specialises in professional indemnity claims; defending professionals in the property, legal, financial services and IT sectors; also advises in relation to insurance coverage disputes.
Tim Johnson
0115 976 6557
tjohnson@brownejacobson.com
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Rating: 10.0/10 (1 vote cast)
Tags: bank of scotland, buy-to-let, commercial lender, professional indemnity, residential property, scullion
Posted in Professional Indemnity | No Comments »
Tuesday, May 31st, 2011
The Financial Ombudsman Service’s maximum binding award will be increased to £150,000 from the current limit of £100,000.
The change will come into force on 1 January 2012 and will only apply to complaints referred to FOS on or after 1 January 2012.
How a decision – which will soon mean a binding award of up to £150,000 – can be said to be “fair and reasonable” when a court of law could not reach the same outcome remains a sore point for those in the firing line.
And that is before one considers that, in so far as time limits are concerned, there is no 15 year long-stop date, in the same way that non-regulated firms are protected from stale claims by the Limitation Act 1980.
Other pressures abound – for example, the likely increase in professional indemnity insurance premiums and the drain on capital caused by the ever increasing FSCS levies.
Whilst giving consumers confidence in dealing with an FSA regulated firm is laudable, it is very easy to see why many IFA and broker businesses are under severe pressure.
We are likely to see more attempts to judicially review its decisions. It will be interesting to see if the courts will be able to find a way through the FOS’s very wide statutory authority.
Posted by Jonathan Newbold, who specialises in professional negligence, financial services and commercial dispute resolution; advises insurers on policy wording and coverage matters.
Jonathan Newbold
0115 976 6581
jnewbold@brownejacobson.com
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Rating: 0.0/10 (0 votes cast)
Tags: Financial Ombudsman Service, FSA, IFA, Limitation Act 1980, professional indemnity
Posted in Insurance, Professional Indemnity | No Comments »
Thursday, March 31st, 2011
The Court of Appeal has today upheld a High Court decision that clauses inserted into contracts withdrawing rights on insolvency will not be enforceable.
According to the Court of Appeal judgment in Towergate Stafford Knight Company Limited (now Folgate London Market Limited) v Chaucer Insurance Plc any such clause would fall foul of the anti-deprivation principle and is therefore void.
The anti-deprivation principle is a common law rule that prevents parties from depriving their creditors of the benefits of their assets should they become insolvent.
This Judgment demonstrates the ongoing relevance of the anti deprivation principle and the profound effects that this can have on commercial contracts. Further guidance on the principle can be expected to come from the Supreme Court when the Judgment in Belmont is handed down.
Posted by Paul Cox, specialising in: large loss and catastrophic cases including brain and spinal injuries; fatal claims and those involving chronic pain syndrome; regularly asked to advice on policy liability/interpretation
Paul Cox
0121 237 3912
pcox@brownejacobson.com
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Rating: 10.0/10 (1 vote cast)
Tags: Chaucer, Commercial contracts, Court of Appeal, creditors, insolvency, Towergate
Posted in Business recovery, Commercial contracts, Insurance, Outsourcing, Professional Indemnity | No Comments »
Wednesday, February 16th, 2011
When the parties are confused as to who had the authority to enter into the contract and the method of concluding the same.
Everton FC brought a claim arising out of an alleged contract for the club to appear in a tournament in South Africa. The High Court held that the parties all understood an agreement would only be concluded when a contract signed by the authorised signatories had been exchanged. The club could not rely on email exchanges or a telephone call between the parties as showing that the understanding of how the contract would be concluded had changed. Therefore Everton’s claim was dismissed.
We’re back to the basics of contract formation and making sure that the formalities are complied with. Compare this case with Richard Nicholas’ post and you can see that if the basics are not dealt with properly, then you may find yourself tied to terms you didn’t intend to agree to or in Everton’s case, finding that there is no contract at all.
Posted by Nichola Evans, who specialises in professional indemnity work , directors and officers, legal expenses insurance, conditional fee agreements and after the event insurance and commercial litigation.
Nichola Evans
0207 337 1019
nevans@brownejacobson.com
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Rating: 10.0/10 (3 votes cast)
Tags: Commercial contracts, Everton FC, High Court
Posted in Commercial contracts, Outsourcing, Professional Indemnity | No Comments »
Friday, November 5th, 2010
Claimants who accept a Financial Ombudsman Service (FOS) final determination will be bound by it and will not be able to then bring a civil claim through the courts against their financial adviser for any loss above the £100,000 limit to the FOS’ jurisdiction following a recent High Court decision.
The decision in Andrews v SBJ Benefit Consultants is very good news for IFAs and their professional indemnity insurers because it has clarified that claimants cannot accept a FOS award and then issue proceedings for the balance of any loss.
Of course there remains a risk that complainants might secure a favourable FOS determination, reject it and press on with civil proceedings.
However, most IFAs and their insurers would be happy with that because claims dealt with by the Courts are assessed in accordance with the law rather than what is “fair and reasonable” in the Ombudsman’s opinion, which some believe leads to decisions that are “consumer-friendly”. The judgment certainly brings much needed clarification to a long standing area of uncertainty.
Posted by Jonathan Newbold, who specialises in professional negligence, financial services and commercial dispute resolution; advises insurers on policy wording and coverage matters.
Jonathan Newbold
0115 976 6581
jnewbold@brownejacobson.com
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Rating: 10.0/10 (1 vote cast)
Tags: FOS, insurance, insurers, professional indemnity
Posted in Insurance, Professional Indemnity | 1 Comment »
