6th Feb 2015 08:45
LONDON (Alliance News) - Impact Holdings (UK) PLC shares leapt on Friday after it said it has been awarded over GBP1 million from AIG Europe Insurance UK Ltd after the Court of Appeal gave a favourable judgement to the legal industry lender.
Impact shares more than doubled to 102.50 pence per share on Friday morning, the best performer in the London Main Market.
The company's disbursements funding subsidiary, Impact Funding Solutions Ltd, had been pursuing the recovery of loans it made to solicitors and their insurers.
Impact said the subsidiary had previously obtained a favourable judgement against AIG, but the insurer "refused to meet the award," arguing the payments awarded to Impact "were excluded under the terms of professional indemnity (PI policy) insurance dictated by the Solicitors Regulation Authority," said the company.
The dispute was first heard in the Manchester Mercantile Court, where the judge ruled in favour of AIG, agreeing that the payments were excluded under the PI policy. Impact successfully appealed the decision, with the court declaring "the loss suffered by Impact Funding Solutons arose from the solicitors' negligence and was precisely the type of loss that solicitors' compulsory insurance is designed to cover," said the company.
"This appears to be the first occasion in which the construction of the "trade debt" exclusion under a PI Policy in respect of claims by litigation funders has been dealt with in the Court of Appeal," said the company in a statement.
AIG then seeked permission to appeal the decision in the Supreme Court, which was refused by the Court of Appeal. Impact said AIG still has the right to seek permission to appeal directly from the Supreme Court.
"Even if AIG receives permission to appeal, I am confident that the board has the resolve and is fully committed to continuing the efforts for recovering loans from those errant law firms that misused the
disbursements funding provided by Impact Funding Solutions," said Paul Davies, chief executive of Impact Holdings.
Following the favourable award for Impact, AIG will pay the company GBP986,515 in damages and interest and a further GBP175,000 for costs incurred by Impact during the case.
"The board and I are delighted with the Court of Appeal decision as this follows hard on the heels
of litigation Impact Funding Solutions is pursuing," added Davies.
Impact continues to pursue solicitors that advised the company on the disbursements funding arrangements before the loans were made, it said.
By Joshua Warner; [email protected]; @JoshAlliance
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