An insurance advisory firm has called on Anglo-Australian firm Herbert Smith Freehills to show it is not conflicted in its role advising the Financial Conduct Authority (FCA) in a review of COVID-19 insurance claims. 

HSF is advising the U.K. finance industry regulator on its intentions to seek a High Court review of policies after a large number of claims were rejected during the Covid-19 lockdown.

Mactavish, which acts as a specialist outsourced insurance buyer and claims resolution expert, has called on HSF to disclose if it also represents any of the insurers or brokers whose wordings will be subject to scrutiny. 

In a statement, the advisory firm added that "if that is the case it is difficult to see how conflicts of interest would not arise".

Mactavish said it believes that there is a public interest in this disclosure "because the FCA, which will presumably be paying their fees, is funded by the taxpayer and was set up to be an independent body to protect the interests of consumers".

As part of a statement on the matter, it also called on the regulator to run a more "in-depth review" of the role played by brokers around failed Covid-19 business interruption (BI) claims. 

Bruce Hepburn, CEO at Mactavish said in the statement that the insurance industry "is riddled with conflicts between insurers, brokers and law firms".

He said: "For there to be complete confidence in its current legal case of BI insurance claims linked to Covid-19, and for any future reviews of the sector, we believe the FCA needs to be completely transparent about its processes, and which partners it chooses to work with and why."

"The FCA is currently working with Herbert Smith Freehills on its court case review of BI claims. We believe the law firm has close relationships with many insurers and/or brokers. It may have advised on the very wordings being tested by the Court. In the spirit of transparency those insurers and brokers should agree that their identities should be disclosed to demonstrate there is no risk of any conflict of interest arising."

HSF responded: "As you would expect, we have a robust global conflicts procedure in place.  There is no conflict of interest here."

The FCA added: "We are very clear that there is no conflict of interest and the claims made are unfounded. We have engaged three highly respected QCs from a number of different chambers alongside Herbert Smith Freehills. The FCA is seeking to ensure that we can get clarity in this case as soon as possible."

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