A Court of Appeal judgment is set to have major implications for insurers seeking access to confidential documents from solicitors that could enable them to refuse indemnity, writes Post.

In Quinn Direct Insurance v The Law Society, Quinn had appealed against an earlier High Court decision to refuse the company access to confidential documents relating to a firm of solicitors that was being investigated by the Law Society.

In 2007 the Law Society took possession of files and documents relating to the firm as part of a large-scale fraud investigation. Quinn had provided the firm with professional indemnity insurance and was its primary insurer.

Following news of disciplinary proceedings being brought by the Law Society against two of the solicitors at the firm, Quinn declined to provide one of the partners with an indemnity on the grounds of dishonesty as outlined in their policy.

As part of its investigation into the conduct of the other solicitor, Quinn requested access to the documents seized by the Law Society's investigation team. The request was denied and Quinn then issued a wide-ranging order against the Law Society seeking access to all the documents it had in relation to the firm.

The Law Society opposed the application on the grounds that some of the documents were confidential and privileged, and both the High Court and the Court of Appeal backed the Law Society.

Browne Jacobson partner Nichola Evans, a specialist in professional indemnity issues, commented: "This decision means that while insurers will still be able to gain access to important documents held by a firm of solicitors it is imperative that they seek sound advice from their advisers before making any such requests. Success will largely depend on the scope and reasoning behind any request and whether the documents in question are in fact subject to privilege and confidentiality."

Reynolds Porter Chamberlain professional negligence partner Nick Bird said: "If the judgment is not appealed and remains the law, then either some solicitors will have to revise their terms and conditions so that the client waives privilege for the purpose of notifying insurers, or insurance policies will have to be amended to prevent solicitors from being under any duty to disclose this material."

Post is a sister title of Legal Week.

Related briefing: Court of Appeal upholds Quinn v Law Society decision