15 July 2002
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23 September 2013
"We find ourselves right in the middle of a major war," declares Martin Cockx, right at the start of our interview. "There are major players and we're one of them,", he adds. Cockx and Andrew Twambley are the two partners at Amelans, the Manchester professional indemnity (PI) specialist firm that, in the last couple of years, has become the scourge of the defendant insurance industry and this year became The Lawyer's Litigation Team of the Year at The Lawyer Awards 2002.
The Amelans double-act is rather partial to such conflict metaphors. When The Lawyer spoke to Twambley this time last year, the firm was centre-stage in a major standoff with the insurance industry in Callery v Gray. At the time, Twambley drew on the Hollywood blockbuster Gladiator to illustrate the scale of the battle. Twambley cast his firm as the Russell Crowe character Maximus and the insurance industry was - yes, you guessed it - the evil Roman empire.
Just in case the full significance of the case was not apparent, he made another cinematic reference, this time drawing on the latest Star Wars instalment. It was Amelans v the Dark Menace of the Insurance Industry.
Since then, the Manchester firm has featured in two other epic clashes with the insurers - Sarwar v Alam and Tilby v Perfect Pizza - that have also fundamentally shaped the landscape of conditional fees. So far so good, and it's three-nil to the hardy Mancunians.
Perhaps not surprisingly, there is something approaching a siege mentality at the Manchester firm. The two partners and director of finance Denise Wilkinson quickly make clear that there are certain issues that are off limits. For example, they will not provide details as to the size of the firm or its turnover, which, of course, makes profiling the firm a tad difficult.
"I'm not trying to be awkward, but you haven't experienced what we have over the last two years," Cockx says. "This firm has been vilified and we've been up against the dirtiest tactics that you could ever imagine. Anything that could assist our opponents, we can't put on the public domain." A touch of paranoia, maybe? You decide.
To rewind back to Callery, the landmark case tested the simple rationale of the Access to Justice Act that anticipated lawyers embracing conditional fee arrangements (CFAs) because they could recover reasonable success fees to reward their risk-taking from the losing side. But, according to claimant lawyers, the defendant insurers refused to play ball. In that instance Norwich Union had turned down a 40 per cent success fee on a bog standard rear end shunt. The defendant insurers brought the infant after the event (ATE) industry to a grinding standstill by refusing to pay up.
The Callery saga rumbles on and the case went to the House of Lords in April. The insurers were granted leave to appeal the case, despite the fact that at the end of last year, the appeal judges gave clarification on all issues except the "reasonableness" of ATE premiums. At the end of June, the House of Lords dismissed the appeal by the Beachcroft Wansbroughs defence counsel by a majority of four to one. The judgment was heralded by Amelans as a victory for claimants although it is less clear cut than the firm suggests, as it fails to establish concrete ground rules for the funding of such claims.
Amelans clearly enjoys its role as defender of the claimant PI profession in this new era of litigation funding. "It was a system foisted upon claimant solicitors, not of our own asking, and inevitably there was going to be a major conflict between liability insurers and firms of solicitors," says Cockx. "The liability insurers had 10 years of consultation and instead of doing the decent thing they decided that they were going to have a war with us - well that's fine."
The reason why Amelans constantly appears in the firing line is because it is the one sticking its neck out. In fact, on first day of new regime in April 2000, it claimed to have issued more than 1,000 insurance policies for PI claims. But the Mancunians claim to be taking a principled stance and to be fighting for the independence of the profession. "If Norwich Union had their way, every accident would be managed by them and both sides would be dealt with by them," says Twambley.
Sarwar v Alam, which was in the Court of Appeal last September, was as critical for the profession as Callery. The case concerned the recoverability of premiums where the claimant has pre-existing legal expenses insurance. The insurers argued that the onus was on the claimant solicitor to identify whether a defendant had an legal expenses insurance policy that would cover the claimant's injuries. "We didn't know he had such a policy and nor did the driver because it wasn't something that he had bought," recalls Twambley. "But it was tagged on unbeknown to him when he was issued with his policy one and a half years ago."
More significantly, he contends that the insurer, Co-operative Insurance Society, had not bothered to tell them when Amelans issued its protocol letter. "They didn't ring us up in order to mitigate the potential loss and say that there was before the event insurance here," he says. "They let us incur the liability, run the case and settle it. It was only two weeks before the hearing that they produced this policy."
In Tilby, the defendant line of attack was that the ATE insurance fell within the Consumer Credit Act 1974 and ran foul of its requirements. But senior costs judge Peter Hurst held that it would only become credit for the act if there was a deferment of payment beyond the end of the case for "a significant period". Cockx says: "If they had brought up that argument in Callery, which they could have done, it could have been adjudicated upon last year, but, of course, they didn't."
Cockx saw the action as stalling tactics. "Now what they'll do is think up some other scheme and have cases stayed pending that one. It's a matter of trying to starve out the claim-ant firms," he says.
"Do you appreciate what a dirty kind of game this is?" Cockx asks at one point. It is a bleak vision of the PI market but no doubt one that many will recognise. "You get some bad apples," he says. "There are some at the front and they are the accident management companies, others at the back such as the cost negotiators, and there are an awful lot in the middle and they're the liability insurers who just don't want to pay up."
It is the costs negotiators that are presently incurring the wrath of the Amelans team. Or the "unqualified, unregulated costs muppets who will do anything to save their clients money", as Twambley would have it. And the Master of the Rolls, Lord Phillips of Worth Matravers possibly shares Twambley's low opinion. "We now have a growth industry related to costs, adding an extra tier of expense, and its spawning satellite litigation," he wrote in The Times earlier this year.
According to the Amelans lawyers, it is the costs negotiators' lack of accountability before the courts that is the major problem. But they are just as critical of those law firms which inflate their own bills in the knowledge that the "muppets" will knock them down. Amelans has a typically robust approach to the middlemen. "We never ever deal with them," says Twambley. "We don't speak to them, write to them, we don't even acknowledge their existence."
It has been a turbulent period for all players in the PI market but this niche practice claims to be expanding at an exponential rate. Despite Callery freezing payments, Wilkinson - who according to Twambley is "Don King to our Mike Tyson" - claims that the firm has continued to expand in a "controlled" fashion.
On looks alone, the firm appears to be an archetypal high street outfit - located above a local bank, next to the butchers and over the road from the bakers in the well-off South Manchester suburb Didsbury. However, the practice stopped being a general practice back in 1989 and ever since then has been jettisoning practice areas - the last to go being its conveyancing department in 1997. The firm now claims to be a national niche PI firm, pioneering CFAs.
Apparently, the firm is more than the two-man effort it appears to be. According to Wilkinson, it capitalises on a tight four-strong management team comprising the finance director, the two partners and a business development manager. "And that's the decision-making body in its entirety and so we don't have to sit around with 15 other partners. If we make a decision, it's implemented within hours," she says.
On the third attempt, the Amelans partnership lets on how many fee-earners it has. It is possibly more than you think and a damn sight more than they had three years ago, but The Lawyer is sworn to secrecy on pain of death. Remember, it's a war out there.