The industry needs a forum to assess cases worth fighting, says Lord Hunt

Our industry needs to set out its own plan of campaign. The recent, much publicised House of Lords' decision in Cave v Robinson, Jarvis & Rolf restored the position on limitation periods - to the relief of professional advisers and their insurers all round. On another level, the case was a very clear demonstration of the importance of strategic litigation as a risk management tool for the insurance industry.

The Solicitors Indemnity Fund (SIF) has done well to fight the right case and to clarify and establish the law. With its information bank on the claims against the entire profession, the SIF was in a unique position to do so. It could spot the trends. It knew the potential exposure, as against the cost of fighting one individual case and could assess the overall risk. The fragmentation of the solicitors' insurance market risks reducing the opportunity to identify and pursue similar cases; an opportunity perhaps never fully utilised in other professions.

Major players in the general insurance market have already recognised the importance of such strategic litigation, as seen in the cases on funding: Callery v Gray and Sarwar v Alam. There are other examples of a strategic approach alongside the litigation process: the successful defence of the 2.5% discount rate for multipliers in future loss claims last year; more recently the resistance to increases in recoverable NHS charges, which has led to government commitment to proper consultation. None of this would be possible without strategic thinking on behalf of the market as a whole.

The problem of co-ordination is by no means unique to the professional indemnity market, but it is highlighted by the changes in the last two years. At present insurers might not see the extent of the problem, as cases run by the SIF are still coming to fruition.

A good example of constructive co-operation is the professional negligence Pre-Action Protocol. By bringing together those with influence, with power to take the necessary decisions, the market now has a consistent and coherent protocol. Without such co-operation, the result might have been a plethora of separate procedures applicable to each different profession.

Clearly, the challenge for the insurance industry is to find an appropriate internal forum in which to identify the critical issues for the industry as a whole, to assess the risk and determine which cases should be run as strategic litigation for the wider benefit of us all. In this way, the industry sets the agenda, rather than reacting to it. What better example of a proactive approach to claims handling?

Lord Hunt is senior partner of law firm Beachcroft Wansbroughs