Dispute over terminated contract and competition for customers reaches High Court.

A dog fight has broken out between Animal Friends Insurance and Equine & Livestock (E&L) Insurance, leaving thousands of pet owners caught in the middle.

E&L, which has been underwriting AFI’s pet insurance since 2002, gave AFI six months notice of termination in February. Since then, there has been a battle for policyholders, with customers bombarded with a series of letters over the past few weeks.

Last Friday, the fight reached the High Court, with AFI winning an emergency injunction against E&L to stop it from trying to sell policies to AFI customers until the end of the contract period. E&L also has to accept policy cancellations from AFI.

Chris Fairfax, a solicitor and legal director for AFI, said the broker – which has about 25,000 policyholders – is suing E&L for lost business after the fight resulted in at least 2,000 complaints from customers at AFI. It is believed a similar number of complaints were received by E&L.

Fairfax said: “We’re continuing legal action against E&L for lost business for the year, and how long policies affected would have lasted. It could be 1,000 to 2,000 policies lost or more, we’re not sure.”

E&L could not be reached for comment.

“I regret that Mrs Fairfax [AFI managing director] has seen fit to conduct an argument in public.

Francis Martin, E&L, in a letter to customers

The first letter to customers, from AFI, informed readers that it would be changing to underwriter Red Sands Insurance Company (Europe). It said unless customers contacted AFI, their policies and direct debit with E&L would automatically be cancelled and switched over with the same terms as their existing policy.

In response, E&L sent a letter to customers saying that only the customers themselves had the right to cancel their policies. It also offered a policy renewal with E&L at a 10% discount.

This prompted AFI to write again to policyholders, saying E&L was in breach of the contract. It also offered the 10% discount.

E&L responded by sending out another letter saying it was within its rights, and offering an increased discount of 20%.

In his letter, Francis Martin, general manager for E&L, said: “I very much regret that [AFI managing director] Mrs (Elaine) Fairfax has seen fit to conduct an argument in public and through our policyholders including your good self. I cannot, however, allow the exchange to rest with her letter which is, at least in part, misleading and less than frank. My letter was in no way a breach of any contract E&L have with AFI.”

AFI said it had no choice but to write to customers to correct what it called the inaccuracies in E&L’s letter.