TAG firms set up £1.5m fighting fund

Hundreds of personal injury firms that are struggling to stay afloat following The Accident Group (TAG) debacle are joining forces to set up a multi-million pound fighting fund, amid concerns that managing partners in some law firms have been left in the dark over the problem.

Some 300 former TAG panel firms met last week to debate how to deal with a potential £70 million bill produced by legal action threatened by TAG insurer Winterthur Swiss Insurance (see [2005] Gazette, 13 January, 1). It relates to alleged negligence in taking on hopeless cases, and payments that were illegal referral fees.



The firms each agreed to pay an initial £5,000 – totalling £1.5 million – to fund any action, which could hit £3.5 million if all 700 panel firms join in.



James Webster, senior partner at London-based Websters Solicitors, who set up the meeting, argued that the insurer created the scheme with TAG, and agreed and imposed on the panel what the terms of panel membership should be.




He said one of the items mandatorily covered under the contract of insurance was accident investigation fees – part of which were later ruled to be referral fees.




‘[Insurers] received premiums to cover those exact risks and now they appear not to want to pay the alleged £70 million that has been claimed under their policies by trying to pass that expense onto the law firms,’ Mr Webster complained. ‘This will be resisted.’ Winterthur was unavailable for comment.




He said money is arriving daily from panel firms and he is seeking a meeting with representatives from the Law Society and relevant practitioner groups.




Meanwhile, Manchester claimant firm Amelans has taken on the cases of several other firms that say they trusted their personal injury lawyers but now feel let down, and want advice on their position.




Partner Martin Cockx explained: ‘Some of the managing partners have expressed a view that the true position in relation to the firms’ TAG cases has perhaps not been communicated to them, and that the threatened action by certain insurers has proved the final straw.’