Underwriter David Chase was on a panel at Miller’s Legal Risk & Compliance Conference 2022, focused on dispute insurance and professional indemnity insurance (PII)
Ed Pickard, Head of UK and International Professional Risks at Miller, introduced the panel.
James Gowen-Smith, Head of After the Event Insurance at Miller, reminded the audience of solicitors’ obligations under the Standards and Regulations Code of Conduct when advising on litigation costs. He cited two recent examples of alleged professional negligence against solicitors for not advising clients thoroughly.
James asked whether David had come across any allegations from claimants not being advised correctly about dispute insurance or litigation funding. David said he had received these sorts of enquiries and explained the typical scenario of a claimant losing their case and receiving an adverse costs bill. The losing litigant then finds out that they could have explored the possibility of taking out dispute insurance at the start of their case had they been aware of it and instructs a lawyer to pursue their former solicitor for negligence.
David said Harbour Underwriting’s underwriting director Rocco Pirozzolo had been approached for his view as an expert on five such cases (for both claimants and defendants). However, these cases settled before going to court, meaning there is no case law to show a cause for concern and a trend. David predicted a substantial rise in these claims in the future. This is why it is important that lawyers advise their litigation clients about dispute insurance and litigation funding.
James asked how David valued the broker’s role in dispute insurance applications and the benefits of using an experienced dispute insurance broker in this market. David replied that using a broker is a highly efficient way of exploring the market to find a tailored solution and getting answers to insurers’ questions. It can help litigants secure the best dispute insurance terms for the most competitive price.
James followed up by asking how solicitors can work with brokers to best present their applications with relevant information. David explained that it was beneficial to see a well-presented proposal with a completed proposal form and a one-page summary to put the case in context, including the facts of the case and its proposed structure. David added that it was “good to share” relevant information with underwriters.
James explained that innovative and flexible products were now available in the market, including cover for opponent’s costs, own disbursements, own side’s costs, anti-avoidance endorsements, deeds of indemnity and contingency fee cover. David confirmed this and added that solicitors have concerns about their work in progress being exposed and that Harbour Underwriting can insure some of the work in progress but would not wish to insure all of it. Harbour Underwriting’s decision to insure is made on the facts and circumstances of each case as well as the financials.
David and James also discussed current trends in new enquiries and the most challenging cases to underwrite.
Other panel members were Zarina Lawley, Head of Solicitors’ PII at Miller and Ally Williams, Underwriting Manager, Solicitor Schemes at QBE Insurance. They discussed the current key risk factors for PII insurers, including rising fraud issues and conveyancing claims.
The audience thanked Miller and the panel for a thought-provoking and informative session.
