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Judgment in Travelers Insurance Co Ltd & Denton Wilde Sapte v Gauri Advani

Date: 24/04/2012

Ms Advani was a solicitor and former Head of Denton Wilde Sapte’s (“DWS”) India Group. She was employed in that capacity primarily to promote DWS using her connections in India.

In 2008 a claim was brought against DWS and Ms Advani by two individuals (and their associated companies) seeking damages for about £400,000 which they said that they had paid to or for the benefit of a Mr Yadav (the former Tourism Minister of Uttar Pradesh). It was their case that they had paid this money on the understanding that it was a deposit payable to enable them to secure the General Sales Agency (“GSA”) for Air India in England and Wales. A GSA is a lucrative contract which gives the appointed agent the exclusive right to sell tickets for the airline concerned in the location which it covers. Despite the payment, they were not awarded the GSA contract. Their money was not returned.

A claim was brought by the paying parties on the basis that Ms Advani (and DWS) had been engaged to act for them in their procurement of the GSA and had been negligent by failing to protect their interests by ensuring that the money which was paid over either secured the GSA or was repaid. The claim failed because the Judge found that the money had been paid as a bribe and was, therefore, irrecoverable on the grounds of ex turpi causa.

DWS and Ms Advani (who were separately represented) recovered some but not all their costs of the action from the unsuccessful claimants. Proceedings were, therefore, brought against her by:

  • Travelers’ Insurance Company Limited (“Travelers”), DWS’s professional indemnity insurer, for reimbursement of the costs which it expended defending Ms Advani and not recovered. Travelers’ alleged that the underlying claim had arisen from the fraud (whether committed or condoned) of Ms Advani and/or because her actions fell outside the ordinary course of a solicitor’s practice. In either case, the costs expended fell outside the scope of the indemnity provided under the policy.
  • DWS, for the sums which it had expended defending itself and not recovered. DWS alleged that Ms Advani was in breach of her implied terms of her employment contract that she should not act dishonestly and/or outside the scope of her employment.

After a six day trial Sir Raymond Jack found that Ms Advani had been fraudulent and/or acted outside the scope of her employment such that Travelers and DWS were entitle to recover the costs which they had expended, and not recovered, defending the underlying claim.

Justin Fenwick QC and Clare Dixon appeared for Travelers and DWS. 

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