In Leggett v AIG, the court ruled that liability does not automatically transfer to successor firms unless a clear novation agreement exists. Despite shared insurance, the LLP was not liable for pre-novation negligence by its predecessor. Claimants must carefully identify the correct legal entity or risk strike-out, as seen in Catton v County Solicitors, where a claim failed due to late substitution after the limitation period.
The authors stress that insurance arrangements do not determine liability, and successor status under indemnity policies does not ‘magically’ transfer responsibility. The takeaway: claimants must investigate firm histories and contractual relationships before issuing proceedings—or risk losing valid claims and facing costs consequences.
