Claims cooperation

The Court of Appeal in Quinn Direct Insurance Ltd v The Law Society of England and Wales [2010] EWCA Civ 805 has upheld the first instance decision of Peter Smith J, [2010] Lloyd’s Rep IR 336, refusing to allow the appellant liability insurers the right to obtain all of the books and records of their assured in order to determine whether they might have a fraud defence to future claims.

Quinn: the facts

The solicitors’ firm SBS consisted of a partnership between O and I. In November 2006 the Law Society inspected the books and accounts of SBS and concluded that the firm had failed to comply with the Solicitors’ Accounts Rules and, following further investigation, on 29 June 2007 the Law Society commenced disciplinary proceedings against O and I. In October 2007 the Law Society intervened in the practice of SBS, on the grounds of O’s suspected fraud and I’s suspected failure to comply with the Accounts Rules, and as a result SBS’s documents were taken into the Law Society’s possession.