Competition law not infringed

The High Court has ruled that the qualifying insurer agreement, the assigned risks pool (“the ARP”) agreement and the rules, relating to the provision of professional indemnity insurance for the legal profession, do not infringe UK competition law (Qualified Insurers subscribing to the ARP and Capita v G Ross and The Law Society, June 2004).

Mr Ross had failed to obtain Insurance for the year September 2001 to August 2002. Consequently, the ARP provided it. He then failed to pay the premium for the cover, which was almost £57,000. The previous year he had obtained cover for £16,865. The qualifying insurers for the ARP claimed for the outstanding premium.

In his defence, Mr Ross attempted to persuade the court that the scheme, whereby solicitors obtained insurance on the open market (failing which it would be provided by the ARP) infringed either the Chapter 1 or Chapter 11 prohibition in the Competition Act 1998.

His defence was summarily dismissed by the High Court. Its view was that the solicitor has no prospect of establishing that the scheme was designed to or, in fact, did restrict, prevent or distort competition in the UK. The ARP was part of a scheme that, overall, encouraged competition and was not a separate market. Nor did the solicitor have any prospect of establishing that the level of premiums within the ARP arose from a dominant position.

The claimants obtained judgment for the outstanding premium, plus interest. It would seem that the Competition Act will provide little comfort for those who fail to pay the ARP’s premiums.

Professional & Financial Risks Focus is published on the basis that no liability is accepted for any errors of fact or opinion it may contain. Professional advice should always be obtained before applying the information to particular circumstances.

Beachcroft Wansbroughs
Professional & Financial Risks Focus, Issue 03, July 2004.