Going great Gunns

St Paul is probably best known within the UK’s legal circles for taking on the Law Society pool work following the break-up of the Solicitors Indemnity Fund.

Based in Minnesota, the group consists of seven companies which straddle the commercial property liability and non-life insurance markets worldwide.

In two years time, the company will celebrate 150 years in insurance, a period that has seen it nearly going under following the 1871 Chicago Fire, paying out $1.267m (£895,000) in claims following the 1906 San Francisco earthquake, and becoming the second US insurer to cover automobiles.

Alistair Gunn is head of legal, covering all the insurance, reinsurance and Lloyd’s-related work outside the US. This is more complicated than it sounds, so if you’re sitting comfortably, it will be explained.

Firstly, Gunn, along with most other people within the St Paul group, is employed by the service company St Paul Management and he carries out company secretarial duties for that entity.

Then there is St Paul Multinational Holdings, which is a US company that has a number of subsidiaries outside the US and Europe, in areas such as Mexico and Argentina. A team of Gunn’s colleagues look after the ‘triple A’ areas of the company which cover the Americas, Australia and Africa.
Occasionally Gunn will be asked for advice, but he does not have any day-to-day dealings with those areas.

St Paul International is the UK company of the group which has branches in Australia, France, Germany, Ireland, the Netherlands and New Zealand.

Solicitors Professional Indemnity is the newcomer, which gives insurance cover provided by St Paul International.
The only part of the European operation which is a subsidiary rather than a branch is St Paul Insurance España Seguros y Reaseguros, which used to be Spanish company Albia before St Paul took it over in 1992. There is one lawyer in St Paul’s offices in Redhill, Surrey, who oversees the operation.

St Paul Reinsurance has offices in Brussels and Munich which report into New York, and lastly St Paul Syndicate Holdings, which is a collection of Lloyd’s-based companies that has its own company secretarial function, but occasionally calls in Gunn for help.

But although Gunn has his fingers in many pies, he does not get involved in any claims work. This is handled by the respective claims departments and it is for the managers of those departments to choose which law firms they instruct and how the work is handled. Gunn does not have any influence in this area, not even in recommending law firms for the various managers to instruct.

But for Gunn’s remit of reinsurance and insurance litigation work, Clifford Chance, CMS Cameron McKenna, DJ Freeman and Freshfields Bruckhaus Deringer are the usual choices. Corporate and regulatory work is handled by Clifford Chance, while IT work goes directly to Graham Cunningham, a barrister at Littman Chambers.

Gunn says that occasionally, the department gets involved in employment issues for which it uses South West firm TLT, a merged firm that was formerly Trumps and Lawrence Tuckett.
How St Paul came to use these firms differs with each one. The personnel department knew a lawyer called Graham Shaw who moved to TLT and so introduced the firm to St Paul. Simmons & Simmons has also been used in the past for employment work, but is not acting for the company at the moment.

The company uses Clifford Chance partner Nick Jordan for regulatory work and has remained loyal to him for many years. The original instruction was given to Jordan when he was at Clifford Turner, later to merge with Coward Chance to build the international behemoth that it is today. Gunn also worked beside Jordan before he left Clifford Chance in 1988.

Camerons first came on board a couple of years ago when it was instructed on a reinsurance litigation. DJ Freeman had done property work in the past for parent company St Paul Holdings and has worked with Gunn for a number of years. Freshfields also began by working on a piece of reinsurance litigation.

Gunn handles only run-off litigation dating from the 1970s. As a rule, any new claims coming in are dealt with in the various claims departments. Another area that Gunn does not get involved in is professional indemnity work connected to the Law Society. He was originally involved in trying to secure the deal, but now has handed the day-to-day running of the business over.

“When the Law Society deal came up it was viewed as a competition that we wanted to be involved in,” he says. “Professional indemnity is one of St Paul’s specialities. We expressed an interest to the Law Society and the discussions went from there. As discussions developed the prospect looked better for both sides and it was quite exciting to be involved in that.”

So, how does Gunn like to work with his external advisers? While he does not have any exact percentages to hand, Gunn says that the proportion of work that he outsources is relatively small. When he does do so it is because he needs specialist knowledge that his team of two – Joanna Lawson and Graham Jones – does not have, or because the team is so overwhelmed with other work that it cannot cope.

When he does send out work it is to individuals, not firms, and it is important to him that it is the individual who handles the work. Occasionally it is inevitable that the work will have to go to someone else in the firm who has the relevant expertise, but Gunn says: “You develop a trust in that individual that they will bring in someone to help you who is suitable. I hold a lot of stall in that relationship.”

Gunn says that technical proficiency is a given and what he rates is personal interaction. “What’s important is keeping the lines of communication going with us,” he says. “It’s quite important that you know what is going on with a particular case at a particular time. I would also rather be billed regularly so we don’t get any nasty surprises at the end of a piece of work.”

As Gunn’s remit covers the entire world bar the US, his international connections are important. “I can’t pretend to advise on South African law or whatever, so the instructions will be given locally by ourselves. We have used Clifford Chance internationally but not for quite a while. A while back we had a problem in Germany and used the Clifford Chance office there.”

But Gunn prefers to use local law offices. “In a local firm people have got the knowledge you need, which may include local knowledge that you may not always get with an international branch. But we instruct internationally on a horses-for-courses approach.”
Alistair Gunn
UK head of legal
St Paul Group

Organisation St Paul Group
Sector Insurance
Employees 700 in UK, 10,000 worldwide
Legal Capability Three lawyers
UK Head of legal Alistair Gunn
Reporting to Kent Urness, chief executive of St Paul International
Location London
Main law firms Clifford Chance, CMS Cameron McKenna, DJ Freeman, Freshfields Bruckhaus Deringer and TLT