James Dingeman QC says ICOB and duty of care add up to a formidable challenge
Brokers face a “formidable” task to avoid being hit by litigation, according to leading QC, James Dingeman.
Dingeman, who was leading counsel in the Hutton Inquiry investigating the death of Dr David Kelly, told delegates that a duty of care to the client, together with the FSA’s insurance conduct of business rules (ICOB), “added up to a formidable area of duty on the brokers”.
According to the QC, areas of particular importance in avoiding potential action included a duty to provide a policy summary before the conclusion of the insurance contract, giving clear guidance to the client on what you propose to do and what you are liable for, a duty to assess the risk and agreeing a level of remuneration.
He warned: “If you really don’t want to get stuck with all the lovely words lawyers will use then agree what you’re going to do on behalf of the client and get the client to sign up to that.
“It is about knowing your client and knowing what the client wants. Delivering what you have promised to do and giving the appropriate advice of what you cannot do even with the best will in the world.”
While applauding the latest broker professional indemnity (PI) initiative from Biba, Dingeman advised brokers to take practical steps such as taking notes during meetings with clients, writing a contract with clients each time rather than relying on a standard form of wordings, and informing the client of what your duties are.
“There are practical steps that you can take to avoid litigation, but with the best will in the world you may not always be able to avoid the clutches of lawyers,” he added.
