D Day for the November Group
28 April 1998
The success of the November Group in shaking up SIF is undoubted, but is it time for the protest group to take a back seat? asks Shaun Pye. ITS VERY name, the November Group, conjures up affinities with some of history's great struggles - the October Revolution, the September Massacres.
Reality is more prosaic. It is called the November Group because its first meeting was held in November 1995, when about 50 firms responded to a letter from Christopher Hale at Holman Fenwick & Willan. And rather than planning to dethrone a despotic Tsar, our heroes are fighting to reform the way solicitors buy insurance. The only death on the cards is that of the Solicitors Indemnity Fund (SIF).
It is not easy finding out who is in the November Group. When we phoned, November Group spokesman Paul Clements at Radcliffes was unfortunately in a meeting - which lasted a week.
Some individual firms are not even sure if they are members. Peter Kavanagh, managing partner at Theodore Goddard, told the Lawyer his firm 'was not, and had never been a member of the November Group'.
Half an hour later the partner at the firm in charge of indemnity phoned with a slight clarification: 'We are, and have always been, a strong supporter and member of the November Group.'
Confusion arises because individual firms have varying levels of commitment to the group. In November 1997, the group was claiming 35 members, although as far as we can determine, there are 22 signed up. But it is understood that there are a number of smaller firms, not on the list, who maintain 'an interest in the group'.
A core of five firms comprises the group's working committee - Holman Fenwick, Hill Dickinson, Dibb Lupton Alsop, Radcliffes and Bird & Bird.
Other firms on the list, such as Macfarlanes and Richards Butler, describe themselves as 'fringe members'. Macfarlanes managing partner Roger Formby says: 'I went to a meeting a couple of years ago and since then we've received correspondence, but I haven't given them any money.'
So what does the November group do? For the past two years it has concentrated on being extremely cross about SIF. Nobody hates SIF more than the November Group - and competition for that honour is pretty intense.
During its 10-year existence, claim City firms, they have had to pay a disproportionate amount of money into SIF. Hammond Suddards says it has obtained quotes for professional indemnity from the open market which are cheaper, even, than the new, improved risk-banded version of SIF.
But hatred of SIF goes beyond mere financial calculations. November Group members turn purple at the thought that they, personally, have ultimate liability for the mistakes - as they see it - of a horde of bumbling sole practitioner conveyancers who seemingly collect claims for a hobby.
Managing partners in the City, running their own multi-million pound businesses, cannot comprehend how SIF can carry on after lumbering them with a £432m shortfall.
Last September, The Lawyer has discovered, the group sent a letter to the Law Society expressing its 'consternation and horror' at the 'unexplained and unjust' level of SIF's shortfall, and pointing out that all the November Group's member firms would be better off on the open market. It called on the society to grant a formal waiver from contributions to SIF for all of its member firms.
The clear threat was that if the Law Society refused, the group would seek a judicial review. A bank account was set up and letters sent to all members asking for a £250 donation to the fighting fund to help pay for advice from counsel.
Earlier this year the group commissioned insurance consultancy Nelson Hurst & Park to compile a report on professional indemnity. It came down firmly in favour of the abolition of SIF and provision of insurance by the open market. A more detailed report will be presented in the next couple of weeks.
As a protest group, the November Group has been an undoubted success. Although meetings with SIF and the Law Society have proved fruitless and the threat of judicial review has not so far been carried out, the profession is mid-way through a consultation which could see SIF scrapped.
But there is a feeling in the City that the November Group's destructive zeal has served its purpose. Some even say the group's profile will work against the best interests of the City in the months ahead which may account for the reluctance of some firms to claim membership or to speak about the group. Hales, the founding partner, appears to be refusing to return our calls.
Support has been on the wane for some time. Initially, meetings were held at Holman Fenwick's offices every month. While the working group still meets regularly, sources say that meetings of the full group have dwindled to 'every two or three months - or when there's something specific to discuss'.
High-profile firms have dropped out. Some of the withdrawals are understandable - like Blake Lapthorn's, which is also one of SIF's panel solicitors. Others, like Simmons & Simmons and Clifford Chance, which quit in April last year, became uneasy about the November Group's passion for scrapping SIF at any cost.
Perry Simson, a partner at Clifford Chance, says: 'Our position was, and remains, that we need much more information before deciding whether to abolish SIF outright.'
Now that the Law Society is asking for alternatives to SIF, further differences within the group are emerging. David Swaffield, a partner at Hill Dickinson who sits on the November Group working party, said the group had no policy on SIF's proposals to introduce risk banding to make the fund more sensitive to the risks posed by each fund member.
And last week The Lawyer reported that some members advocated retaining a revamped mutual fund rather than a system of approved insurers - the option regularly expounded by members of the November Group working party.
David Hertzell, managing partner of Davies Arnold Cooper, says now that there is a prospect SIF could be scrapped, the group appears uncertain about how to replace it.
Davies Arnold Cooper senior partner and Law Society council member David McIntosh, who is thinking of running for president, says it might be time for the group to take a back seat. 'The November Group's utterances come across as special pleading and that doesn't help in canvassing support,' he comments.
'Besides, most solicitors agree with the group's general line. What's the point of tilting the windmill when the wind is blowing our way anyway?'
An alternative vehicle for the City firms to express themselves is the City of London Law Society's (CLLS) working group on professional indemnity set up last Autumn.
It has strong synergies with the November Group - the chairman is Richard Tapsfield of Linklaters and it includes representatives from Nabarros and Dibbs - but the rhetoric coming out is less militant, more diplomatic.
CLLS chairman Tony Sacker, a partner at Kingsley Napley, says: 'Although the City is not generally sympathetic to SIF, we are yet to form a view on the Law Society's consultation paper.'
Earlier this year Rowe & Maw was one of a number of firms - including Osborne Clarke, Berwin Leighton and Denton Hall - that contacted the November Group expressing an interest in joining. But a spokesman for the firm says that after consideration it decided it would prefer to deal with the CLLS. He says: 'It's more a question of style than substance. The CLLS is more prestigious and more subtle than the November Group.'
However, the effectiveness of the November Group was acknowledged by SIF director Elizabeth Mullins in a statement this month. In an 'unprecedented move' SIF was speaking directly to the profession to counter 'the flood of alarmist messages' which had been spread by 'a number of firms with a personal axe to grind'.
That personal bitterness vented at SIF by the November Group has certainly grabbed the attention of the profession.
Now that everyone is listening - does the November Group have anything else to say?