The duties of placing brokers

The general rule is that a producing broker appointed by the assured owes the assured a duty of care, but that in the usual course of events there is no corresponding duty of care owed by the placing broker to the assured. Accordingly, if things go wrong and there is a breakdown of communication between assured, producing broker and placing broker, the producing broker is – absent special circumstances – alone liable to the assured. That does not mean that the placing broker can escape liability. He will remain liable in damages to the producing broker to the extent that his own negligence has given rise to the damages claim against the producing broker by the assured. Fisk v Brian Thornhill & Son [2007] EWCA Civ 152 is just such a case, although it proceeded on the basis that the placing broker did owe a direct duty of care to the assured and that his breach of duty rendered him liable to the placing broker by way of contribution. Where the claim is between brokers, as in the present case, it is not relevant to determine whether the claim is for breach of contract or for contribution, although the classification of the duty may matter if the claim is brought by the assured against the placing broker.