Schwarzmann ready for court action

PricewaterhouseCoopers' (PWC) legal onslaught to recover premium and commission from Independent Insurance brokers has started.

It will launch two test cases to recover outstanding money in the coming weeks.

In September 2002, Independent Insurance liquidator Dan Schwarzmann of PWC offered agency brokers a tough choice: pay up all time-on-risk gross premiums and 100% of commissions of return premiums in a lump sum or face legal action to recover the outstanding cash.

But about 80 of the 800 brokers involved refused to sign up to the deal.

This week PWC's lawyers are compiling civil cases against two of the 80 brokers, alleging breach of contract.

The two brokers, as yet unnamed, are likely to receive legal letters within weeks.

If PWC is successful in recovering its money, which it insists belongs to Independent's creditors, all remaining non-payers will face similar action.

Sources close to Schwarzmann, well known as a shrewd operator, said he would pursue the cases to the High Court if necessary.

Biba chief executive Mike Williams agreed it was highly unlikely Schwarzmann would back down.

"He's always maintained he would take action against those who haven't paid the monies he believes are owed to the creditors, so I'm not surprised in the least," he said

At the time the deal was stuck, Williams admitted it was not as generous as some brokers had hoped.

"I don't think I'd be jumping up and down with glee that I'd screwed a great deal out of the liquidator," he pointed out.

"But the potential downfalls of refusing were too much."