EVERSHEDS has won a £1m contract to handle engineering giant BTR's litigation following the company's decision to scrap most of its general liability insurance cover and directly appoint its own litigation adviser.
While other companies have increased their deductible the excess on their liability policy BTR is believed to be the first to have increased it to such an extent that its insurer, Royal & SunAlliance, will pay only for cases that are 'near disasters'.
'It is a risk management issue,' said BTR general counsel David Stevens. 'We are now effectively self-insured.'
Eversheds' appointment followed a beauty parade involving 10 firms. Previously there had been more than 12 firms handling BTR's contentious cases, most of them appointed by the insurers.
The contract covers a wide remit, including employment, health and safety, environment, commercial disputes and debt collection.
Eversheds had a head start in that it has handled all of BTR's employer liability claims for the past two years. According to John Moseley, vice-chairman of Eversheds' insurance group, the employer liability experience had proved the advantages of working in a direct relationship with the principal.
'In working through an insurer you are one step removed,' he said. 'You are brought in at the end, rather than at inception, and you may not get to know the principal at all. In working directly, you get to know the client's business.'
In handling BTR's employment claims, Eversheds has established fixed fees, set up a computerised claims handling system and worked out protocols with the firms normally representing the trade unions.
'The relationship with the union lawyers was always hostile,' explained Moseley. 'We wanted to change it to something consensual.'
According to figures collected internally by BTR's risk management department, the result of the relationship on employment claims has been to push cases through more quickly and more efficiently, at considerably lower cost.
'As we understand it,' said Moseley, 'other large companies are now coming to BTR to find out what they are doing.'