Royal Life faces court action

Two-partner Cambridge firm Ritchie Samuel is handling a writ against insurance giant Royal Life and four other defendants in connection with an alleged advance fee fraud.

Other defendants include two Royal Life employees and Paul Khan, managing director of XLNC, a Stoke-on-Trent financial services firm.

The action of Ritchie Samuel's clients, former restaurant owners Mr and Mrs Thatcher, arises out of the events leading to the collapse of their restaurant Thatchers.

The plaintiffs wished to refinance the business and fund further expansion. The writ alleges that a Royal Life employee introduced them to a person offering to provide finance. Relying on the good name of Royal Life, the Thatchers paid an advance fee of several thousand pounds to this person. The finance did not materialise and their business collapsed.

The plaintiffs argue that Royal Life's employees, and therefore the company itself, owe a duty of care to ensure any person introduced was of good standing before allowing any commitment to an agreement on the reliance of the name of Royal Life.

Royal Life said in a statement: "This case was passed to the Insurance Ombudsman in 1992 who found in our favour.

"We have heard very little subsequently and are most surprised to receive this writ which, if necessary, we will defend vigorously."