Day Nurseries' claims against Pound Gates insurance brokers

In 2020, the FCA brought an action in the English Court on behalf of policyholders against eight insurers (Arch, Argenta, Ecclesiastical, Hiscox, MS Amlin, QBE, RSA and Zurich) and in relation to 20 policy wordings issued by those insurers.

The FCA asked the Court to provide legally binding confirmation that in principle the 20 policy wordings respond to the effects of COVID-19 and the related Government measures. In January 2021, the Supreme Court confirmed that certain policies did provide coverage for the business losses caused by COVID 19 and the governmental measures to contain the disease.

Your policy wording does not include any cover for COVID 19 or the related government measures despite such policies being available in the market at similar prices to the insurance placed for you by Pound Gates. You claim is therefore not a claim against Ecclesiastical, but against your broker, Pound Gates for not recommending adequate insurance cover to you and for failing to advise you properly on the scope of the insurance it obtained for you.

If you used Pound Gates as your broker and you have an Ecclesiastical insurance policy for the policy year 2019/20 (through March 2020) you should contact us.  We are establishing a group of claimants for whom  Pound Gates placed these policies, so that we can pursue a group action on behalf of many claimants in one go.

It is difficult to say. Our aim is to achieve a settlement agreement for you as soon as possible. If settlement is not possible, litigation could take 12 months or longer.

The government has temporarily relaxed insolvency rules, so it is less likely that a company will end up in liquidation than it was before the Covid19 crisis.

If your company goes into administration (a process aimed at getting the company back on track), any compensation received will be used to get the company back to normal trading. However, you should obtain specialist insolvency legal advice in those circumstances as this note does not constitute legal advice.

If you go into liquidation, the liquidator will receive the compensation and use it to pay out the company's creditors, including employees' wages and suppliers. However, you should obtain specialist insolvency legal advice in those circumstances as this note does not constitute legal advice.
 

If we win/settle the case and you are awarded compensation, you will pay us an agreed amount to cover the work we have done for you and the costs we have paid on your behalf along the way.

The amount could either be a share of compensation or another way of calculating our costs. Before you enter a No-win No-fee Agreement with us, we will explain how it works and how it will be calculated.
 

If you lose your case and/or we are unable to reach a settlement, you simply walk away and do not pay us anything. The court might order you to pay Pound Gates' legal costs, but we will put in place an insurance policy that will cover those costs. See "What is ATE?".

Yes.  There are no hidden costs.
There are two types of costs in litigation: solicitors' fees and so-called disbursements (i.e. court fees, barristers' or experts' fees). We will pay any disbursements for you, and we will not send you any invoices for our solicitors' fees. At the end, if you are successful, you will pay us an agreed amount (usually a percentage of your compensation) to cover both disbursements and our legal fees (see our share of compensation below).  
 
However, there are two main exceptions, which are explained again when you sign our No-win No-fee Agreement:
 
a) You behave unreasonably, e.g. you lie to us, give us fake documents, fail to comply with court orders or turn down a settlement that we have achieved for you. In those (very rare) cases, we are entitled to terminate the No-win No-fee Agreement and ask you to pay our costs up to that point.
b) You choose to terminate the agreement after the 14-day opt-out period and before we have finished your case. That would be your choice and, as we will have done work for you up to that point, we may ask you to pay for that work in exchange for allowing you to terminate the No-win No-fee Agreement.

We will explain how we would calculate those costs before you sign the DBA with No-win No-fee Agreement and we are happy to answer any questions you have about this before you sign our DBA. Please email Covid19Insuanceclaims@fieldfisher.com to ask your question.

No. See "Is it really 'no win, no fee'?"

"DBA" stands for Damages Based Agreement. A DBA is a type of "no win, no fee" agreement. Instead of paying monthly legal bills as the case progresses, you agree to share your compensation at the end of the case. If you don't get any compensation, we don't get paid.

Our team is made up of experts with years of experience in insurance and professional negligence claims. You can view the teams profile at the bottom of the homepage.

Yes – we are already helping a significant numbers of companies. The more companies that come forward to join the Fieldfisher group claims, the stronger the negotiating position against the broker will be. 

Yes, but if you do not join the group there are some serious disadvantages:

1. TIME: it will take you longer to pursue a claim on your own or in a second wave of claims.
2. VALUE: the larger a group of claimants, the more bargaining power they will have and the better a settlement they may be able to achieve. Joining now gives everyone the best chance. If you don't join at all, you cannot benefit from any settlement agreement we negotiate on behalf of the group, which is likely to be better than anything you are able to agree individually.
3. COST: pursuing a single claim against the broker can be very expensive and quickly eat up the whole value of your claim. Being in a group means that the cost is spread across a big pool of claimants, which brings economies of scale.

"ATE" stands for After The Event insurance. This insurance covers your so-called "adverse costs" risk, i.e., the risk that the court might order you to pay Pound Gates' (the Defendant's) legal costs if you lose your claim. If that happens, the ATE insurer will pay those costs and you do not have to pay anything.

Yes and yes – although it is important to note we are only paid once, not twice!
Normally the court will order the insurer to pay a reasonable proportion of our costs, usually around 60% of the fees we actually incur.

Any costs paid by the broker will be added to your total compensation and we will take our share out of that total.

Our share reflects not only the work we have done for you over the course of the case, but also the risk we take of not making any money if you lose, and the fact that we fund our own fees and quite substantial costs along the way (court fees, barristers' fees etc.) for you. This means there is zero litigation risk for you and zero impact on your cash flow. 

There are lots of ways of funding a claim, including Conditional Fee Arrangements (a form of "no win, no fee" agreement where you pay hourly rates plus a bonus if we win), third party funding (where a third party funds your legal costs in exchange for a slice of your compensation) or traditional hourly rates which are payable monthly.

We are offering to fund these claims on a DBA basis, having considered this the best option and the one most likely to give you the best chance of making a return without you taking on risk to your business. We are unable to offer CFA or any other kind of funding on this occasion.

If you are eligible, we will send you an Engagement Letter once we have a group of claimants ready to go. The Engagement Letter allows us to represent you.

Our next steps are then to get you fully on-boarded as a client, obtain funding for a compensation claim and also to represent your interests more widely.

The more claimants that sign our Engagement Letter, the bigger our group, which in turn improves the group's position in obtaining more favourable funding and gives more weight to any submissions we make. If we are unable to get a big enough group together, then we will not be able to proceed with the claim. So it is very important that you sign up, if you want the group to go ahead.

Once we have funding, we will offer you a DBA (Damages Based Agreement). At that point, you have the opportunity to review it and to choose whether to proceed with us.

In the Engagement Letter, you promise not to approach any other law firm or funder without telling us first. This is so we have certainty of the size of our group. If you wish to terminate our Engagement Letter, and go elsewhere, you can do so by telling us in writing (email to Covid19insruanceclaims@fieldfisher.com). There will be no charge if you follow this process.
 

The FCA test did not consider potential professional negligence claims against Pound Gates, or any other insurance brokers. The FCA test case looked at many policies, including the Ecclesiastical policy, to determine whether there is cover under the policy.

As anticipated the FCA judgment established that the Ecclesiastical policy does not respond to Covid-19. Therefore, the professional negligence claim against Pound Gates will proceed (assuming we are able to represent a sufficiently large class) as the only opportunity to recover some of the losses is to claim against Pound Gates for failure to advise on the scope of cover it obtained for you given the availability and wider BI extension coverage available in the market. 
 

No, the potential group action is against Pound Gates, not Ecclesiastical.

Our potential professional negligence group claim is against the broker (Pound Gates), not Ecclesiastical. The claim is based on Pound Gates alleged failure to fulfil its professional duties to you.

The FCA decision is helpful because it shows that there were policies available in the market that could have covered Covid-19 losses at the same or similar price of your insurance; policies that Pound Gates should have recommended to you.

The potential professional negligence group claim is against Pound Gates, because Pound Gates failed to advise you properly in breach of its professional obligations.

Participation

In order to participate you will need to sign our Engagement Letter and will also be required to keep the information we provide to you/the group confidential.

We will send you further details about participation once you have signed the Engagement Letter.

Disclosure obligations

As part of the group you will have obligations regarding disclosure. This includes preserving document that are relevant to the case. For example, you may have emails, notes of telephone conversations or diary entries with the broker or NDNA at the time you took out your policy (as early as March 2019). For example, you may have notes of discussions with Pound Gates about policy coverage, and/or your needs as a nursery owner.  As part of the group, you have a duty to ensure these documents are retained, and to disclose them in the proceedings if we advise you that they are relevant.   

The obligation to retain documents means that you must pause any document destruction policies for the duration of the proceedings.  You should also notify your employees that they must not delete or destroy any potentially relevant documents as well. If relevant, you must ask former employees who might be in possession of relevant documents to preserve those documents. We will need your confirmation in writing in due course that this has been done.

Witness evidence
While unlikely, you may be required to give factual witness evidence in the proceedings.

If this is required, we will explain to you how to prepare your witness evidence. This is likely to include your experience of purchasing insurance, generally and specifically from Pound Gates, and detailing any relevant discussions you had with them. Your evidence will be provided in the form of a witness statement, and you may be required to appear at the hearing to speak to that statement and have that evidence tested.   
 

If your nursery made a loss because of the effects of Covid-19 or the government lockdown measures, then you can join the action group.

The group is run on a "no-win no fee" basis. See above. You would not be taking on any personal liability.

We normally send the Engagement Letter to you within 1 working day. You should contact us on Covid19Insuranceclaims@fieldfisher.com if you have not received it from us. The Engagement Letters are sent via an electronic signature company called DocuSign which may end up in your junk mail, so it is worth checking there.