TAG firms find hope in premium appeal

Some 700 personal injury firms left reeling by the collapse of The Accident Group (TAG) saw a ray of hope this week, after the solicitor who acted for the company in test cases against the insurance industry expressed confidence that the appeal on the issue of recoverable premiums will go ahead.

Anthony Dennison, partner at Manchester firm Rowe Cohen, said he had been in talks with TAG's underwriters and funders since administrators PricewaterhouseCoopers (PwC) were called in last week to deal with its parent company, Amulet Group.

It came just days after two key court rulings.

In mid-May, the senior costs judge slashed the recoverable premiums by half, followed by the Court of Appeal ruling that TAG solicitors could delegate outside their firms the responsibility for explaining conditional fee agreements to claimants (see [2003] Gazette, 22 May, 3; 30 May, 3).

TAG was given leave to appeal on the issue of premiums.

'I am now optimistic that the funders and underwriters will see the benefit of pursuing this litigation,' Mr Dennison said.

'The prospect of success has not diminished because TAG is no longer around, and I think they will realise that there are still definite benefits in proceeding.'

Mr Dennison denied that TAG's demise was down to the litigation, blaming instead the company for backing cases that were too risky and for failing to keep underwriters and funders happy.

One leading claimant lawyer said panel firms would suffer a double hit: 'This will have a dreadful effect on firms, both at the front end in terms of cases generated and at the back end in terms of the costs that can be recovered if the appeal does not go ahead.'

A spokeswoman for the Association of Personal Injury Lawyers said its concern was with 500,000 existing claimants.

PwC said in a statement that it would be working to ensure outstanding claims were handled in an 'orderly and expedient' way.

However, it emerged this week that former TAG employees have been contacting solicitors in an attempt to sell on for their own benefit cases that had not been allocated when the company went under.

There are also suggestions that some former employees are trying to sell on cases already allocated.

Claire Banwell, a solicitor at north London panel firm Osmond Gaunt & Rose, said that although firms were now finding it virtually impossible to get in touch with TAG, she had eventually learned that they would be able to work through their existing TAG caseload that was already covered by insurance.

She confirmed that many firms could be hit hard.

'Some firms retained in excess of 150 claims from TAG a month and they will find it hard to replace that level of work in the current marketplace,' she said.

Paula Rohan