One of my practice areas is advising clients on disputed insurance issues. At the moment, I am helping a client with a claim under a business interruption insurance (BII) policy for losses that they have suffered a result of the Covid-19 lockdown that forced them to shut their outdoor leisure facility last March for a few months.
The day starts with hearing from them that the loss of revenue that they suffered amounts to over £100,000. The recent Supreme Court judgment in the Financial Conduct Authority test case over BI insurance has clarified some of the uncertainty in this area, but this client has just had their claim rejected by the insurers. I advise them on the options and draft them a robust letter of complaint to send to the insurers explaining to the insurers why they are wrong to reject the claim and telling them they now must pay up. If this doesn’t work, then we will take the complaint to the Financial Ombudsman Service.
Next up is a pensions issue. I do a lot of work in the pensions dispute area. One of my clients has fallen out with some former business colleagues over the future of an old small self- administered pension scheme (SSAS) which he wants to look at closing and winding up.
The investments in the SSAS also seem to have underperformed in the last few years. I look at the trust deed and rules which originally establish the SSAS and govern how it is run to see whether it can be wound up or the terms changed for the benefit of my client. I also have a think about whether my client might have a claim against the investment managers in respect of the fund’s losses. I then speak to my client and discuss his options.
I catch up with an independent financial adviser client who I haven’t spoken to in a while. First up, he tells me that the cost of his professional indemnity insurance has sky-rocketed this year. That is despite the fact that he has not made any claims under the policy in the last year and he doesn’t advise on what might be considered higher risk financial products that can often lead to mis-selling complaints by customers.
We chat about how he might be able to reduce the insurance costs next year, but the rising costs of commercial insurances seem to be an issue facing many clients at the moment. The market appears to be hardening for policyholders as insurers are worried about the size and number of liability insurance claims that are likely to be linked back to Covid.
My client also tells me that he is likely to have some work for us in the near future, as some of his advisers are taking on new clients who seem to have been mis-sold pensions by their previous IFAs and they would like me to have a look at how we might help them to recover their losses (these can often be large when it comes to pensions related products).
I am working with a colleague in our employment team on resolving some issues for an agency client who wants to put in place new contractual arrangements with their own clients and third parties.
We advise on new contractual liability and exclusion clauses to help manage the client’s risks going forward. We also notice some employers’ liability insurance issues and help the client with those. Employers’ liability (EL) insurance is one of the very few insurances in the UK that are compulsory for most employers. It insures against claims by employees if they are injured or become ill because of the work they do for the employer. Failure to have proper EL is very serious and can lead to the employer been fined £2,500 for each day that they are uninsured.
I am helping a firm of professional trustee clients to deliver some pensions disputes training, so that they become more aware of the increased risks for trustees in this area and how they might manage and better guard against those risks. We agree that, in the training, I will cover the most topical issues in this area:
- how best to handle complaints by members of the pensions scheme (members complaints are on the rise)
- how to manage the risk for trustees associated with pension scams (with the scammer trying to steal their pensions savings or trying to persuade people to invest their pensions savings in unusual and high-risk investments)
- how trustees should respond to an investigation by The Pensions Regulator (TPR), which already has wide investigatory powers which are due to be reinforced later this year.
Finally, I meet with colleagues to discuss the launch of a new service for the firm, where we will pool our collective experiences to advise clients who are been investigated by, or subject to enforcement action from, regulators like the Financial Conduct Authority, Prudential Regulation Authority and Financial Reporting Council.
We have many years’ experience of advising clients on such issues between us. This is particularly timely because we think that the shakedown from Covid will see many of these regulators investigating regulated firms and senior managers to see how they responded to, and behaved, during the pandemic.
The regulators will want to find out how well prepared were those firms and managers for a crisis, if they listened to what the regulators saying about conduct during the crisis and if they treated their customers fairly? Our aim is to help clients who might be subject to regulatory investigation and ensure that the investigation leads to the best possible outcome for them.