TAG law firms settle with insurers

Manchester-based solicitors Rowe Cohen and a raft of other personal injury firms have come to a settlement in The Accident Group (TAG) litigation.

The dispute, which some commentators said could have put scores of law firms out of business, came to an end when an agreement was struck with insurers Winterthur and National Insurance and Guarantee (NIG) yesterday (31 January).

The Swiss insurance giant Winterthur launched claims against 500 personal injury solicitors after claims that accident group TAG collapsed in April 2003.

TAG had run up debts of more than £100m prior to going out of business. The debts arose after the company initiated around 200,000 claims through an aggressive recruitment drive of victims.

Winterthur alleged that TAG’s referral law firms deliberately passed cases that would fail to the claims group. This lead to Winterthur making claims for negligence and repayment of the accident investigation fee, known as the AIL fee.

Bond Pearce professional indemnity partner Gary Oldroyd, who was acting for one group of panel solicitors, confirmed that the litigation had been settled.

“Winterthur, NIG, Rowe Cohen and the vast majority of panel solicitors have agreed to settle in the litigation arising from the TAG scheme, including separate provisions in relation to the AIL fee.” said Oldroyd, reading out a prepared statement. “All parties are pleased that litigation has come to an end.”

If yesterday’s settlement had not taken place the 500 firms would have been liable to pay Winterthur the £70m it lost through underwriting TAG’s cases.

As reported in The Lawyer’s Top Trials of the Year (14 January), the Commercial Court was due to hear the case in April, with five firms selected by Winterthur’s lawyer, Reed Smith Richards Butler partner Richard Spafford, to act as representative cases.

Bond Pearce partner Oldroyd instructed Sue Carr QC and Jamie Smith QC of 4 New Square to act on behalf of his defendant clients. Kennedy’s partner Simon Gibson instructed Justin Fenwick QC and Ben Hubble of 4 New Square.

Berrymans Lace Mawer partner Charlotte Chapstick instructed Jeremy Stuart-Smith QC and Charles Phipps of 4 New Square. Henmans partner Clive Brett instructed George Leggatt QC of Brick Court Chambers, Ben Patton of 4 New Square, Richard Davies QC and Judith Ayling of 39 Essex Street.

Robin Simon partner Megan Howe instructed Graeme McPherson QC of 4 New Square. Reynolds Coleman Bradley partner Steven Reynolds instructed Andrew Moran QC of 7 Harrington Street Chambers.

Spafford instructed Charles Hollander QC, Tim Lord, Victoria Wakefield and Colin West of Brick Court Chambers, and Bernard Doherty, Katie Scott and Robert Lazarus of 39 Essex Street to act on behalf of Winterthur.