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News - Spectacular failure heartens PI insurers.

BYLINE:

Tanya Powley.

SECTION:

Pg. 4

LENGTH:

304 words

DATELINE:

Insurers are unlikely to see a surge in large negligence claims against solicitors after the Football League "spectacularly failed" in its £140m claim against law firm Hammonds, according to a leading practitioner.

Sarah Clover, partner at law firm Barlow Lyde and Gilbert, who represented Hammonds, said: "If the judgement had gone the other way it would have been a different matter but I don't think this will be the case now that this high-profile claim has so spectacularly failed."

The Football League launched action against Hammonds in 2004, alleging that the law firm was in breach of duty in failing to protect its commercial interests in the abortive £315m television rights deal it had signed with broadcaster ITV Digital.

It is understood that Aon brokered Hammonds' professional indemnity insurance with Ace as the lead insurer, and several other PI providers including Chubb and Swiss Re involved in the layers.

Frank Maher, partner of law firm Legal Risk, said that while the judgement will be a huge relief for the insurers involved, there would be disappointment elsewhere in the insurance market. "The result has denied insurers the right to hike up PI rates - if the case had gone against Hammonds we would have seen some huge repercussions regarding rates in the market."

As well as losing its claim, the Football League will have to pay 90% of Hammonds' legal costs, which experts believe could be as much as £5m.

Mr Maher said that the case had highlighted how risk-aware lawyers need to be. "There are several things coming up like the Legal Services Bill that mean law firms will need to be more compliant," he said.

"When that is introduced, law firms could become as heavily regulated as insurance companies and banks. That would be an extremely different regime from the current one."

- See Comment, page 10.

LOAD-DATE:

June 28, 2006

LANGUAGE:

ENGLISH

PUBLICATION-TYPE:

Magazine

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