Michael Bright’s defence counsel Ian Winter QC has cross examined prosecution witness Stuart Pettet, former assistant general manager at Independent
It has emerged today in the ‘Independent three’ trial that former company chairman Michael Bright’s inability to relinquish authority led to serious problems in the handling of claims.
According to the defence, Bright thought that it was imperative to maintain the tightest possible control over reserves to consistently achieve the best settlement possible. This claims philosophy, noted Ian Winter QC, was fundamentally different to other insurers at the time.
Prosecution witness Stuart Pettet, a former assistant general manager at Independent, said pressure to reduce the gap between claims reserves and final settlement figures culminated in a ‘blazing row’ with the company chairman. According to the witness the dispute centred on the fact that money tied up in claims reserves had forced Bright into issuing a profit warning to the market.
The defence suggested this was a symptom of Bright’s controlling personality.
The court heard that by July 1999, following a series of audits, Pettet was confident that the fat had been stripped and reserves were sufficiently tight.
Bright continued to pressurise Pettet to find genuine savings fearing for the survival of the company, said the defence. Pettet argued that his talented claims team—described as the best in the business—were not able to identify any further savings in the claims files.
Under questioning Pettet said this tension resulted in claims staff having anxieties over recording a reserve too early meaning claims stayed on the white boards for longer than would otherwise have been the case.
All three defendants—Michael Bright, Philip Condon, and Dennis Lomas—are former directors of Independent Insurance charged with conspiracy to defraud. The trial continues.
