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Member, Beacon International Group, Ltd.
LONDON--The Assigned Risk Pool, which provides professional liability insurance for U.K. law firms unable to find coverage in the commercial market, does not violate U.K. competition law, London's High Court has ruled.
Lawyer Graham Ross paid £16,865 ($24,631) for professional indemnity coverage for September 2000 to August 2001, but he could not obtain insurance from a qualified insurer for the following year, court records show. Attorneys in England and Wales must purchase coverage from an insurer approved by the Law Society or from the ARP, an insurer of last resort whose policies are jointly underwritten by Law Society-approved insurers.
In order to continue in practice, Mr. Ross had to buy insurance from the ARP. However, he refused to pay the £56,847 ($82,087) premium charged by the ARP, claiming that it was excessive and that the ARP was anti-competitive.
In his suit, Mr. Ross contended that the ARP's practices violate the Competition Act 1998, arguing that it was in the approved insurers' interest to refuse to cover lawyers, as doing so forces them to buy more expensive insurance from the ARP.
In his ruling, High Court Judge Sir Andrew Morritt disagreed with Mr. Ross' reasoning and said he found no evidence that the ARP premiums were so high that they prevented lawyers from continuing to operate. The ARP was part of a market that, overall, encouraged competition, he ruled.