AIG receives UK High Court order

Claimants believed to have spent twice as much because of insurer

AIG receives UK High Court order

Insurance News

By Terry Gangcuangco

Remember that case between law firm Giambrone and the UK-based buyers whose investment went up in smoke after the luxury development they were advised to get a piece of was seized due to alleged links to the Italian Mafia and the IRA?

As reported in 2017, claimants were looking to get their money back following the botched transactions in Southern Italy but Giambrone, which was held liable to provide compensation for the loss of significant deposits in excess of £5 million, failed to pay up. This prompted British firm Penningtons Manches to apply for a non-party costs order against Giambrone’s professional indemnity insurer, AIG (Europe) Limited. 

Penningtons Manches acts for over 80 people who lost more than £3 million in deposits for the Jewel of the Sea holiday development in Calabria. Giambrone, which first opened in London and Palermo in 2004, was found to be negligent and in breach of trust in the advice it gave investors but at the time said there was no money left for outstanding claimants.

“The next step for the team at Penningtons Manches is to pursue AIG and argue that each client has a separate entitlement to the £3 million indemnity insurance, the minimum amount which solicitors are required to hold,” asserted Penningtons Manches then.

Now the firm’s group action professional negligence lawyers, led by partner David Niven, have secured a High Court non-party costs order under section 51 of the Senior Courts Act 1981 against Giambrone’s insurer.

Mr Justice Foskett, exercising the court’s discretion to award non-party costs in exceptional circumstances, found that the buyers spent “twice as much on pursuing their claims than they would have done if AIG had not funded the defence of the claims in the way it did.”

“Delighted” with the decision, Niven commented: “As Mr Justice Foskett acknowledges in his judgment, this litigation has been ‘fiercely contested’, even though our clients succeeded on substantively all points at trial. I am confident that this will result in a substantial payment of my clients’ costs.”


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