Axa suspends Berrymans and Kennedys for breaking protocol

Berrymans Lace Mawer and Kennedys have been suspended from handling litigation claims for Axa Insurance after failing an audit.

In a letter dated 10 January, Axa's external legal advisers are informed that, as part of Axa's current legal review, Berrymans' London office and Kennedys' Brentwood in Essex branch have been suspended from the panel.

The suspension is due to an audit which found that the two firms failed to comply with certain protocols which were set out by Axa for panel firms that handle high volume insurance litigation claims.

The firm's offices are also not allowed to deal with agency work - new claims which have been sub-contracted out by other panel firms - until the problems have been rectified.

One industry source says: "I've never heard of such a thing. Our clients do not specify who we can or cannot use on an agency basis."

Axa's decision arrives at a crucial time for its external legal advisers as last week The Lawyer revealed that the insurance giant is reviewing its 30-plus panel as part of a rationalisation drive. The panel is expected to be substantially reduced.

Nick Thomas, senior partner at Kennedys, says: "With our Brentwood office [Axa] was not 100 per cent happy with the work we were doing. They put a moratorium on sending new work to us."

But he says: "Axa is giving us the chance to put it right and have told us to tell [the auditor] when to come back."

Thomas says he is confident the firm will rectify the issues uncovered by the audit, "It is a slap on the wrist but it is a slap on the wrist from a friend," he says.

Terry Renouf, insurance partner at Berrymans, says: "We can confirm that there has been an audit. We have discussed the results of that audit and we have remedied the points it has raised."

It is understood that both Berrymans and Kennedy's offices are still receiving work on existing claims they have historically dealt with.

The panel review follows French-based Axa Sun Life's takeover of Guardian Royal Exchange in May last year.

Other panel firms include Beachcroft Wansbroughs, Cartwrights and Merricks.

Axa was unavailable for comment.