EUROP ASSISTANCE INSURANCE LTD V TEMPLE LEGAL PROTECTION LTD

[2007] EWHC 1785 (Comm), Queen’s Bench Division, Commercial Court, Mr Justice Langley, 25 June 2007

Insurance (after the event) – Agency – Defendant authorised to conduct run-off on behalf of claimant – Claimant terminating agency alleging breach of contract and breach of duty – Whether claimant entitled to temporary injunction restraining defendant from conducting run-off

EA, a wholly owned subsidiary of Assuricazioni Generali, granted Temple a binding authority on 1 January 2003 to underwrite legal expenses on behalf of EA. Temple, which was entitled to retain 35% of the premiums paid, appointed a number of solicitors as coverholders, and policies were offered to their clients with personal injury claims. Temple acted as principal in its dealings with the coverholders. On 31 December 2005 EA stopped writing the business, and Temple conducted the run-off for EA. By a letter dated 13 April 2007 EA purported to terminate Temple’s authority to conduct the run-off, on the basis of alleged breaches of fiduciary duty consisting of failing to account for premiums received and failure to collect premiums. The allegations were denied by Temple, but it nevertheless accepted that the binding authority was at an end. However, Temple denied that EA was able to administer the run-off itself, and argued that the agency was irrevocable until all claims had been disposed of. EA sought an injunction to prevent Temple from continuing to administer the run-off. Langley J refused an injunction: he held that the causes of action were “inventive but thin”, and that the balance of convenience was against the grant of an injunction. In particular, Temple would be placed in breach of contract with the coverholders, and EA could protect itself by exercising inspection rights.