Managed Legal Solutions v Hanison: Insurer HDI Global wins joinder application in professional indemnity dispute

The High Court has granted HDI Global Specialty SE's application to be joined as a second defendant in proceedings brought by litigation funder Managed Legal Solutions Limited against solicitor Darren Hanison, trading as Fortitude Law. The decision, delivered by Louise Hutton KC sitting as a Deputy Judge, highlights the courts' approach to insurer intervention when conflicts of interest arise between insurers and their insured parties.

HDI, which had issued a professional indemnity insurance policy to Fortitude with a £2 million limit, sought joinder specifically to contest whether Fortitude owed MLS a freestanding tortious duty of care. This issue carried significant implications for coverage under the policy, creating a clear conflict of interest. Whilst Mr Hanison would benefit from the duty being established (triggering potential indemnity), HDI's interests lay in defeating this argument to avoid liability.

The application arose in unusual circumstances. Mr Hanison had initially defended the proceedings through solicitors instructed by HDI, including filing an Amended Defence in October 2023 denying the alleged tortious duty. However, following the withdrawal of his solicitors in October 2024 due to lack of instructions, Mr Hanison failed to comply with court orders requiring him to provide an address for service. This resulted in his automatic debarment from defending the claims by November 2024.

MLS opposed the joinder application on multiple grounds, principally arguing that HDI had delayed unnecessarily, having known about the freestanding tortious duty issue since at least October 2023. The litigation funder contended that permitting HDI to join would effectively allow the insurer to circumvent the consequences of the debarment order against its insured.

The court rejected these arguments, finding that the debarment of Mr Hanison constituted the relevant trigger for HDI's application. Whilst the conflict of interest had existed throughout, it only became practically significant once Mr Hanison ceased defending the claim. The judge noted that HDI had attempted to ascertain the position from February 2025, writing repeatedly to MLS's solicitors without response until June 2025, when HDI discovered that MLS had applied for a trial date.

Applying the principles from In re Pablo Star [2018] 1 WLR 738, the court determined it was "desirable" to join HDI under CPR 19.2(2)(b). The judgement emphasised that without HDI's participation, the freestanding tortious duty issue would go uncontested, with MLS facing only the burden of proving its case at an undefended hearing. The court found this would unfairly prejudice HDI, whose interests would be directly affected by any adverse finding.

The judgement drew parallels with Wood v Perfection Travel Ltd [1996] IRLR 233, where the Court of Appeal had permitted an insurer's joinder to contest liability separately from coverage issues. Similarly, reference was made to Lord Sumption's observations in Cameron v Liverpool Victoria Insurance Co Ltd [2019] UKSC 6 regarding insurers' sufficient interest to make submissions in their own right.

The decision underscores the courts' pragmatic approach to procedural fairness where insurance coverage disputes intersect with underlying liability proceedings. The judgement recognises that whilst insurers generally defend through their insured, direct participation becomes necessary when genuine conflicts emerge and the insured can no longer advance the insurer's interests.