Ten former employees accused of breaking terms of their restrictive covenants

Towergate has launched a High Court case claiming that insurer Chaucer poached its staff and business and that 10 of Towergate’s former employees broke the terms of their restrictive covenants.

Towergate chairman Peter Cullum alleges that Chaucer has “broken the integrity of the broker-client relationship” by targeting Towergate’s competition car customers after terminating its contract to underwrite that line of business for Towergate, and taking on 10 former members of the broker’s staff.

A Chaucer spokesman said: “This matter being in the hands of the courts, Chaucer will make no comment.”

Towergate Underwriting Group filed the claim on 30 January. It accuses the employees of breaching fiduciary duties and restrictive covenants, and Chaucer of breach of contract, breach of confidence, and dishonestly assisting breaches of fiduciary duties.

The employees are: Richard Egger, Phil Barnard, Steve Hallam, Susannah Cattermole, David Goves, Mary Singleton, Alison Richardson, Samantha Bartlett, Neil Shepherd and Sue Clancy.

In a statement to Insurance Times on the allegations made in the legal claim, Cullum said: “Staff breaking covenants is one thing, but it is a dark day when an insurer breaks the integrity of the broker-client relationship.”

“Staff breaking covenants is one thing, but it is a dark day when an insurer breaks the integrity of the broker-client relationship

Peter Cullum

The next step in the proceedings will be for Towergate to serve detailed particulars of their claim and for Chaucer to make its defence.

This is the latest in a string of court cases over alleged breaking of restrictive covenants, though it is the first high profile case brought by a broker against an insurer, rather than another broker.

In November, Towergate reached an out-of-court settlement with former staff members Jeremy Clifford and Adrian Littler, who agreed to pay the company a six-figure sum in addition to its legal costs. The two left the company at the beginning of 2007 to found their own broker, CLA Risk Solutions.

Last month, Insurance Times reported that a case between London Market Insurance Brokers (LMIB) and former employee Kevin Mills had been settled out of court (News, 31 January).

Other high profile court cases have involved Marsh, Willis and Erinaceous.