The defendant had intervened in a solicitors’ firm insured by the claimants. The claimants sought access to files and accounting records so that it could defend insurance claims. The defendant denied access to files other than those on which claims had been made.
Held: The claim failed. The claimant put two arguments.
Q said they were within the stautory regime for this purpose by virtue of the Rules. Scott J rejected this saying: ‘whilst there is a public interest in maintaining an insurance policy the purpose of the regulatory procedure is to enable the Law Society to regulate solicitors. There are many potential reasons for intervention or investigation which to do not affect insurance. There is not in my view a sufficient linkage between the clearly regulatory role of the Law Society to that of insurers to confer on the insurers an unfettered right to access to the solicitors documents. The Law Society is entitled to that access in its role as being a supervisory body of solicitors and to ensure compliance with the obligations as set out in the Solicitors Act 1974 and any subordinate rules arising thereunder. Not all concerns that arise under that will be matched with corresponding interest for the insurers. The whole purpose of the present application is not to exercise any kind of supervisory role in the conduct of the firm; it is merely an attempt to gather evidence for use to enable the Claimant to refuse an indemnity. Its purpose therefore is completely at odds with the regulatory role and in particular the insurers’ alleged role in it. The purpose of the application is to obtain documents in the expectation that material will be found so as to refuse an indemnity to Mr Ikoku. The public at large will therefore be worse off if the exercise is carried out as the Claimant believes it will be as there will be no indemnity.’
Q also claimed that the insurance contract gave them this right. Smith J denied this: ‘In my view when looking at the clause in its entirety clause 6.2 a) 4) is not a freestanding obligation to provide information [and] assistance whenever the insurer requires it. It is clear that when one looks at the clause as a whole the provision is dealing with an occurrence which might give rise to the likelihood of a claim. In that eventuality the obligations under 6.2(a)-(c) arise. Here there is no claim; the documents sought are where there has not yet been any claim. I am reinforced in that in my view by reference to the Court of Appeal in Gan Insurance Co Ltd v Tai Ping Insurance Co Ltd (No 3) [2002] ECWA Civ 248. It is of course necessary to be cautious in having regard to a decision on the construction of a different document. What the Court of Appeal made clear however (see paragraphs 24-26 of the judgment of Mance LJ (as he then was)) is that the insured is only required to provide information to assist in a claim that is already made. An insured is not required to provide information solely for investigating whether or not a breach of the insured obligations can be established.’
Judges:
Peter Smith J
Citations:
[2009] EWHC 2588 (Ch), [2010] Lloyd’s Rep IR 336, [2010] Lloyd’s Rep PN 130
Links:
Statutes:
Solicitors Act 1974, The Solicitors’ Indemnity Insurance Rules 2007
Jurisdiction:
England and Wales
Citing:
Cited – Gan Insurance Company Ltd v The Tai Ping Insurance Company Ltd (No 3) CA 1-Mar-2002
Tai Ping had placed facultative insurance with Gan. The substantial risks were re-insured through various agencies. When a claim arose it was repudiated alleging misrepresentation. Gan asserted that Tai Ping had failed to co-operate in the . .
Cited by:
Appeal From – Quinn Direct Insurance Ltd v The Law Society of England and Wales CA 14-Jul-2010
Q had provided professional indemnity insurance to a firm of solicitors in which the Law Society had intervened. Claims were made against the firm, but Q declined to pay, saying that the apparently fraudulent activities of the firm fell outside the . .
Lists of cited by and citing cases may be incomplete.
Legal Professions, Insurance
Updated: 04 October 2022; Ref: scu.420762