Allianz Cornhill to enter TAG legal battle

The insurer’s legal protection arm confirmed to Post Magazine it was considering taking action against a body of claimant solicitors, believed to number more than 120 firms, for paying the fees to TAG’s sister company, Accident Investigations.

“These were fees paid to AIL, purportedly for investigation but the Court of Appeal took the view that it was, in effect, money for old rope and only paid to secure the referrals of work to the solicitors,” explained Frank Maher, partner at law firm Legal Risk.

At the time, referral fees were prohibited by the Law Society. Fees in each case were £320 plus VAT, according to Mr Maher. “Overall, this means a six-figure liability for a two to four partner high-street firm,” he added.

Phil Ruse, divisional manager of Allianz Cornhill Legal Protection, added: “ACLP is taking legal advice in respect of TAG cases. Up until now, we were the only underwriter to have not taken action. We have not issued a claim but have advised solicitors that we are reserving the right to do so.”

Meanwhile, a management hearing for the 600-plus solicitors accused of inadequately vetting cases from TAG will begin this Friday.

The defendants are likely to seek a cost-sharing order, a tactic designed to muddy the waters for lead claimant Winterthur. The Swiss insurer, which at the time underwrote through its then UK-subsidiary NIG, is looking to claim tens of millions of pounds (PM, 11 August, p48).

Original Article: Post