The relationship between solicitors and insurers

In Greene Wood McLean LLP v Templeton Insurance Ltd (No 2) [2010] EWHC 2679 (Comm) Cooke J explored the relationship between after the event insurers and the solicitors appointed by the assured to bring the claim which is funded by the insurers. In outline, Cooke J held that: (a) ATE insurers are required to indemnify the solicitors if they are obliged to pay the assured’s costs when the ATE insurers have wrongfully refused to do so; and (b) the solicitors do not owe any duty of care to the insurers.

GWM: the facts

GWM, a firm of solicitors, represented 69 miners in their claims against other solicitors who had allegedly failed to represent the miners properly in personal injury claims – respiratory diseases and vibration white finger – against their employers. GWM obtained after the event insurance with a limit of £1m from Templeton for the miners to fund the negligence claims, and that funding was used to support an application for a Group Litigation Order. The agreement between GWM and Templeton provided that GWM would be authorised to bind the miners to ATE contracts with Templeton, and that GWM would give them a guarantee that they would not face personal liability for any costs orders.