Insuring David’s Fight Against Goliath, with Harbour Underwriting’s Rocco Pirozzolo

If you look at a timeline of the legal expenses insurance industry, and you pan all the way back to its earliest days, you will find Rocco Pirozzolo front and center.

A former barrister and in-house lawyer, then solicitor, Pirozzolo spent 10 years gaining a deep bench of experience across dispute types as a practitioner before moving into dispute insurance in early 2000. His career shift and move into underwriting dispute insurance came at a pivotal moment in the U.K. legal sector, where Pirozzolo is based: In the early 2000s, the legal aid system in England and Wales was replaced, fundamentally altering the way dispute insurance was purchased and used – and creating the industry Pirozzolo tops today.

Pirozzolo was there for the start of it all, moving up the ranks across insurers as an underwriter before arriving at Harbour Underwriting, in 2016. He also spent over two years as the Director of Litigation Funding for Harbour Litigation Funding before the founding of its sister company, dispute insurance provider Harbour Underwriting. With more than a decade of experience as an underwriter, it was a natural fit: Pirozzolo moved to Harbour Underwriting at its inception.

Pirozzolo currently serves as Harbour Underwriting’s Underwriting Director and Managing Director. He spearheads companywide strategy, client relationships and business development while simultaneously managing a team of underwriters who make decisions about insuring businesses facing or initiating litigation. The team provides security to claimants and defendants wherever they are in the legal process, providing a range of dispute insurance products from adverse costs cover to own-side disbursements and own-side solicitor’s fees. The aim is to allow more cases to proceed by giving clients peace of mind – to lessen the risk when diving into the uncharted waters of litigation. They’ve supported cases litigated across the U.K. and internationally, including in Australia, Canada and The Netherlands.

While the cases he covers are wide-ranging, Pirozzolo finds the most joy in the matters that follow a traditional “David versus Goliath” structure. In those cases, he provides vital assistance to smaller entities fighting battles integral to their survival against formidable, seemingly infinitely resourced opponents. In one notable intellectual property case underwritten by Pirozzolo and team, a family clothing firm successfully sued famed luxury car manufacturer Bentley Motors for trademark infringement. In another, Pirozzolo underwrote a case on behalf of union activist construction workers who were blacklisted from work sites, helping those workers, their families and their communities obtain financial compensation.

Pirozzolo is also a known author and speaker in the legal expenses insurance industry; he is the general editor of The Law Society’s Litigation Funding Handbook, and he has co-authored a chapter on legal expenses insurance in the practitioners’ textbook, Friston on Costs.

He is a member of the Lawdragon 100 Global Leaders in Litigation Finance.

Lawdragon: Tell us about your transition from being a litigator to the dispute insurance industry. How did that happen?

Rocco Pirozzolo: I originally qualified as a barrister and worked as an in-house lawyer for a FTSE100 company. However, it soon became apparent that I was more interested in the contentious work that was passed to external solicitors than the non-contentious work that was on my desk. So, I moved to a law firm as a litigator and transferred to become a solicitor.

I spent the next 10 years acting for claimants and defendants in a variety of civil and commercial disputes. Then, I saw this opportunity to work in dispute insurance. Like so many people in insurance at the time, I fell into this industry.

LD: How has your experience in private legal practice influenced your work as an underwriter?

RP: I was practicing law at a time when litigators were still able to turn their hand to different types of disputes without the need to focus on a specialist area. This experience has proved invaluable as an underwriter, given that we are asked to consider a broad range of disputes from class actions, commercial arbitrations and more run-of-the-mill disputes.

One of the most satisfying parts of the role as an underwriter is being able to insure cases that otherwise might not be capable of progressing without the benefit of dispute insurance.

Importantly, my years as a litigator included acting for clients whose cases fought all the way to trial and also to appeal. As an underwriter, I try to avoid assuming that cases will settle; I prefer to assume that cases will be determined after a hearing or on appeal. In my view, reviewing cases from the perspective of being determined inside a courtroom is a useful way to consider litigation risk. It involves looking beyond the documents presented to you when you are asked to insure a dispute.

LD: The funding and insurance industry has changed worldwide in the last two decades. Can you tell us what it was like being a part of its moments of inception in the UK?

RP: In the late 1990s, the government was determined to reduce the number of cases funded by the public purse using Legal Aid. In early 2000, the law was changed to enable lawyers and insurers to recover their success fees and premiums, respectively, from losing defendants as part of the costs in the action. This change in the civil justice system led to the birth of dispute insurance that could be obtained after the dispute had arisen. This was a radical departure from how dispute insurance had historically been provided, where the cover was bought before any dispute was known.

Inevitably, with such a seismic change in our legal system, defendants were keen to challenge this new regime that enabled claimants to recover the success fees of their lawyers as well as the premiums from them when they lost a case. This led to a series of ‘cost wars’ where success fees and premiums were challenged, including in the Court of Appeal and the House of Lords (as it then was).

LD: Over the last two decades, what have you found most fulfilling about your career as a dispute underwriter?

RP: Given that we receive cases to insure from around the world, it is unsurprising that this is one of the aspects that I find satisfying professionally. As a lawyer qualified in England and Wales, I find reviewing cases from foreign jurisdictions challenging. A number of these cases are from common law jurisdictions, so I am able to benefit from similar legal principles and also similar court rules and processes. However, I also consider cases in non-common law jurisdictions such as The Netherlands, which is becoming a popular jurisdiction for bringing class actions. This throws up the challenge of understanding their jurisdiction, civil court rules and law, so it necessarily involves working with local lawyers.

Assessing the prospects of success in a case is both a challenging and satisfying aspect of my role as an underwriter. This assessment can only be made when you have been approached to insure the case. If you have been approached before the commencement of proceedings or an arbitration, which is usual, there will necessarily only be a limited amount of information available as you will not have the benefit of pleadings, disclosed documents, etc.

One of the privileges of working with lawyers around the world is that you see their different styles in their approach to assessing the prospects of success. Inevitably, you also notice different approaches as to how lawyers look at the risks in a case, even within the same jurisdiction. There will be those who work through the minutiae of a case. Other lawyers will boil down a complex dispute into a strategy to win the case by focusing on one or more key issues.

LD: Are there any disputes you’ve insured that stand out in your mind as particularly memorable?

RP: So many of the cases that we are sent and insure are interesting. Due to the background of many of these cases, for example, the behavior of directors of a well-known insolvent company, they lend themselves to being of interest to the public.

Nonetheless, one of the most satisfying parts of the role as an underwriter is being able to insure cases that otherwise might not be capable of progressing without the benefit of dispute insurance. These are particularly gratifying in the ‘David against Goliath’ scenarios, where the claimant is against the financial and reputational might of the defendant and their ability to wheel out the best lawyers with little or no concern about the expense involved.

One case that springs to mind is a case involving construction companies that adopted a practice of blacklisting trade union activists from their places of work. This practice meant these activists couldn't find work or earn any income, affecting not only them and their families but whole communities.

I found it satisfying to insure a group of claimants in their fight against these construction companies. This went all the way to the High Court, and we were able to help them obtain financial compensation. The case also shed light on the way construction companies had decided to take matters into their own hands and punish anyone who was a trade union activist.

It is these types of cases that affect the lives of everyday people that immediately spring to mind. However, enabling any party, whether an individual or a business, to obtain a remedy when they have been wronged is satisfying when you have helped them pursue a case they would have been unable to pursue without our insurance.