Thread by @GreatStrides65

🧵
Another great @DanNeidle thread. Foolishly, I clicked on one of his links and found myself disappearing down another rabbit hole. Read on …
#ProfessionalIndemnityInsurance #PII
1/11

My eye was caught by Property118’s claim (on a page addressed to buy-to-let mortgage brokers) that each of its “seasoned and accredited” barristers is “fortified” by insurance coverage of up to £10m per client, per claim
2/11

Property118’s linked Guide for Ambassadors says it is produced in association with Cotswold Barristers. Ignoring for now Core Duty 4 (independence), the Guide repeats the claim that each barrister carries £10m of PII per client per case
3/11

I have identified four barristers practising from Cotswold Barristers. All appear to be self-employed barristers regulated by the BSB, each of whom must therefore be a member of the Bar Mutual Indemnity Fund 👇
4/11

Bar Mutual provides primary layer insurance cover of between £500k and £2.5m. But the limit of indemnity is subject to this aggregation clause
5/11

The eyes of any insurance lawyer light up when they see the words “originating cause” (OK - we need to get out more!). As Lord Mustill famously said in Axa Reinsurance v Field, those words indicate the widest possible search for a unifying factor 👇
6/11

So wide is the permissible ambit of the search, that in the 2022 case of Spire Healthcare v RSA, Andrews LJ held that the notorious breast cancer surgeon Ian Paterson was an originating cause of all the claims against Spire 👇
7/11

So what does this mean in practice? Assume a barrister advises 3,000 clients about a hopeless tax avoidance scheme involving credits for guano imports, there is likely to be just a single limit available to meet the liabilities to all 3,000 clients
8/11

Of course, at least at least £7.5m of the cover carried by each barrister is provided by excess layer insurers. But, in my experience, excess layer cover will invariably incorporate the terms of the primary layer
9/11

And for some clients it will be worse: a limit of indemnity under a liability policy is eroded in chronological priority according to when each individual liability is “established” against the insured by a quantified judgment, award or settlement
10/11

In conclusion, unless Cotswold Barristers have managed to arrange some special cover on highly unusual terms, Property118's claim that each has £10m of cover per client per case seems highly questionable
11/11

@threadreaderapp please unroll