Conflicts in an Increasingly Tribal Market Place

Go Back 10.10.22 INSIGHTS

Hardening insurance market conditions are reinforcing the trend that led to the creation of Wynterhill LLP. It is becoming increasingly tricky for panel firms to service the insurance industry and also to represent their policyholder clients who have a coverage problem. This isn’t because the rules governing conflicts of interest have changed, it is because perceptions and mindsets about actual or potential conflicts have become more rigid.

On the part of insurers, this change of attitude is not difficult to understand. If they are paying large sums of money to panel firms each year, then they may be taken aback when one of those firms turns round and sues them. “It’s legitimate under our conflict rules” may not be regarded as a satisfactory answer when the insurer asks: “why are you on the other side to us?”. If the insurer has a large US operation – where conflict rules are more restrictive and there is very much a “you are with us or against us” approach that is reflected in the legal market – then it may not be prepared to have its insurance lawyers play poacher as well as gamekeeper.

Attitudes have also changed within law firms. The influence of concepts of client “ownership” and remuneration models imported from the US necessarily leads to tension if a dispute arises between clients usually represented by two different partners, teams or offices: difficult commercial decisions need to be made as to whether to side with one client or neither. People being people, anecdotally I hear a lot about “turf wars” within firms causing commercial conflict issues. Sometimes this is not even over existing clients, but in respect of insurer organisations being targeted as potential clients (“we might have a chance to get on panel one day” so it goes).

Wynterhill chose a tribe when it started out: we never act for insurers. That has spared us internal disharmony over difficult commercial choices. For those on the wrong end of those difficult commercial choices we offer a highly experienced and non-competing destination for the valued clients of other firms who are asked to act against the insurance market but simply can’t for the reasons discussed. The attached brochure explains a little more about our conflict free offering.

Dan Brooks is a Partner of Wynterhill LLP.

This post is intended to provide guidance of a practical nature but does not contain legal advice or advice as to what action you should or should not take specific to your insurance needs or those of your business, or with regard to any particular situation.