Christine Brown-Quinn & Others –v- (1) Equity Syndicate Management LTD & (2) Motorplus LTD  EWHC 2661 (Comm)
The case involved three employment and discrimination claims where the Claimants, having the benefit of BTE insurance, instructed Webster Dixon, a City of London firm specialising in such matters. One Claimant instructed Webster Dixon from the outset of her case, the other two transferred their instructions when the fee earner handling their claims joined that firm. The insurers initially refused to indemnify Claimants because Webster Dixon would not agree to the hourly rates in their terms. The Claimants argued that such a refusal constituted a breach the Insurance Companies (Legal Expenses Insurance) Regulations 1990. In the ‘outset’ claim, the insurer changed its position, resiling from the refusal of cover and arguing instead that they were only obliged to pay fees assessed under CPR 48.3 and the starting point for such an assessment should be their standard rates. The Claimants argued that such an approach would put them at risk of having to pay substantial costs over and above what was covered by their policies. The Defendants argued that the Court should not discourage BTE insurers; that premiums were calculated based on the insurer’s rates; and, that if normal fees were allowed, predatory solicitors would take advantage. The Judge found that the Solicitors’ rates were not restricted by the insurer’s terms which could be used as a comparator, but not a restriction, in an assessment under CPR 48.3. In relation to the transfer cases, the insurer argued that the client had only one choice of lawyer and, having made it, could not change their mind. The Judge found there was no basis upon which the regulations could be interpreted in that way and that there were many reasons why a Claimant might legitimately transfer instructions. Accordingly the insurers were in breach of the regulations and their refusal of cover was unreasonable.