Independent Insurance's three panel solicitors' firms are chasing policyholders for money owed to them by the collapsed insurer.
Davies Arnold Cooper (DAC), Davies Lavery and Berrymans Lace Mawer were all left out of pocket when Independent went into provisional liquidation on June 17.
The three have now sent letters to more than 2,000 mainly commercial policyholders, asking them to pay monies owed to the firms for work done on their claims.
DAC partner Gerald O'Mahoney, who negotiated with provisional liquidators Pricewaterhousecoopers on behalf of all three firms, said the fees sought from policyholders would cover the period between Independent's last payments to the firms and June 17.
O'Mahoney said the firms received counsel's advice within 36 hours of Independent's collapse that they were able to demand payment from policyholders.
The letters said: “Independent had a right under your policy to appoint us to act as your solicitors.
“Legally, they did so as your agents and the result is that the law regards us as your solicitors.”
O'Mahoney said many of the cases involved were employers' liability claims, which meant the policyholder, having paid the solicitors' fees, would eventually be due compensation from the Policyholders' Protection Board.
He said some payments had already been received.
“The vast majority of insured have been satisfied with paying, but it's not universal,” he said.
O'Mahoney said the firms would deal “sympathetically” with policyholders who resisted paying on a case-by-case basis.
Claimex managing director Richard Hanson-Jones said at least four of his clients were angry to have received the letters from DAC and Davies Lavery.
“The policyholders had no input into the conduct of the defence, the appointment of solicitors or the terms upon which the solicitors were engaged. There was no contract between the solicitors and policyholders,” he said.
Hanson-Jones said the solicitors' bid for payment could lead to a “nonsense” situation where Independent's panel contractors sought payment from policyholders for work done on their claims at Independent's instruction.