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Rule 69 The Association’s right to control and direct the handling of a case – withdrawal of cover

1 The Association shall have the right, if it so decides, to control or direct the conduct or handling of any case or legal and other proceedings relating to any matter in respect whereof legal and other costs are covered under a Defence entry and to require the Member to settle, compromise or otherwise dispose of the case or legal and other proceedings in such manner and upon such terms as the Association sees fit.

2 The Association may, in its sole discretion, at any stage of the handling of the case, decline to cover under a Defence entry the legal and other costs involved where:

the Member, without the Association’s authority, or contrary to its advice, proceeds with the case in a manner which in the view of the Association is undesirable;

the Member refuses to settle the case on conditions which the Association recommends or which are recommended by lawyers acting on behalf of the Association or the Member;

c any of the circumstances set out in Rule 67 subsequently materialise or are brought to the attention of the Association.

 

Guidance

(A) ...to control or direct the conduct or handling of any case or legal and other proceedings... (Rule 69.1)
Rule 69.1 gives the Association the express right to control and direct the handling of a case that falls within the Defence cover and the right to require the Member to settle, compromise or dispose of the case on the basis and terms that the Association deems to be appropriate in all the circumstances, failing which the Association has the right, pursuant to Rule 69.2 to cease to continue to provide Defence cover. The right that is given to the Association to decline cover under Rule 69 is all-embracing and relates to all aspects of case handling. 

(B) ...The Association may, in its sole discretion...decline to cover... (Rule 69.2.a)
Rule 69.2.a gives the Association the right to discontinue its support if the Member proceeds with the case contrary to the Association’s advice, or without its authority, in a manner that the Association considers to be undesirable. The Association is likely to consider that a case is proceeding in an undesirable manner if the Member has, in the light of all the circumstances and the nature of the case, taken steps that are considered by the Association to be inappropriate, unnecessary or unlikely to lead to a better or more cost-efficient resolution of the case. The Association can also decline to provide cover when a Member has proceeded with a case that he has not reported to the Association, or where, notwithstanding the fact that he has received the Association’s support or authority to take certain specified steps, or received the general support of the Association up to a certain stage of the proceedings, the Member has subsequently dealt with the case in a manner that exceeds such authority. 

(C) ...the Member refuses to settle the case... (Rule 69.2.b)
The interests of the particular Member1 in settling a case will not necessarily be the same as those of the Association acting, as it must, on behalf of the membership as a whole. The Association must, when recommending particular courses of action, act not only in the interests of the particular Member, but also in the wider interests of the membership as a whole. Consequently, Rule 69.2.b gives the Association the right to decline cover if a Member refuses to settle a case on the terms that are recommended by the Association or by lawyers that are acting on behalf of the Association or the Member. 

(D) ...the Association may...at any stage...decline cover where...any of the circumstances set out in Rule 67 subsequently materialise... (Rule 69.2.c)
Rule 69.2.c gives the Association the right to decline cover when it becomes aware at a later stage of the case of the circumstances that are described in Rule 67even if the Association has provided cover for legal and other costs that have been incurred at earlier stages of the case. In some instances, material facts do not become available immediately, and therefore, Rule 69.2.c is necessary in order to protect membership funds in the event that a Member should argue that the Association has waived its right to refuse further support for a case by virtue of the fact that it has provided support at earlier stages of the case. However, if the Member is in breach of the obligations that he has under Rule 82, the Association may be entitled in such circumstances to reclaim from the Member any costs and/or expenses that it has paid to the Member or to a third party on behalf of the Member pursuant to Rule 82.2.b.


 

1 See also the Guidance to Rule 82 concerning the Member’s obligations with regard to claims.