Insurance companies cannot trawl through intervention documents seized by the Solicitors Regulation Authority in the hope of unearthing evidence that would enable them to refuse indemnity, the High Court has ruled.
In Quinn Direct v The Law Society, decided on Friday last week, Justice Peter Smith threw out Quinn’s application to access all the documents held by the SRA after the SRA intervened into a two-partner firm, South Bank Solicitors.
Quinn alleged that monies had been dishonestly and improperly paid from South Bank’s client account, and refused to indemnify one of the partners, Horace Onobrakpeya, for a number of claims brought by lenders. Quinn then applied to the court for access to all intervention documents held by the SRA, saying that it needed access to decide whether or not it was obliged to indemnify Onobrakpeya’s partner, Colin Ikoku, in connection with these claims.
Dismissing Quinn’s application, Smith said: ‘The whole purpose of the present application… is merely an attempt to gather evidence… to enable [Quinn] to refuse an indemnity.’ He said that the SRA could continue providing access to files relating to existing claims, but otherwise, privilege and confidentiality prevented the blanket release of documents.
The allegations against South Bank concerned conveyancing transactions carried out by Onobrakpeya. Claimant lenders alleged that there were discrepancies between the sums of money going into the firm’s client account and the sums paid out from it, and alleged that these transactions were unauthorised and dishonest. In one instance, Onobrakpeya admitted to paying out more than £2.7m in a single transaction, alleging that he did so under threats of violence. Quinn contended that there were a substantial number of other potential claims.
Smith said that Quinn’s assumption that Ikoku knew of Onobrakpeya’s activities ‘is predicated by a false assumption of dishonesty of every partner in a small firm’.