Georgina Noakes meets Peter Spendlove, managing director and chief executive of West of England (Services)

IT is fitting that Peter Spendlove should end up running one of the mutual marine insurers which make up the International Group of P&I Clubs. As a child, Peter enjoyed a very international world. With a father in the colonial service - and later in the foreign office - he was brought up in Kenya, the Far East, the Caribbean and America.

Although returning to England to be educated at Winchester and Cambridge, Peter's early years left a lasting impression on his worldview. This, in turn, has influenced his choice of career, which has had as its central theme a desire to change and turn around difficult situations.

After graduating from Cambridge, Peter went to Bar School and was subsequently offered pupillage at 1 Brick Court. There he worked with Roger Buckley, who had a general commercial practice, with some involvement in P&I work.

Spendlove remains adamant about the depth, the power and the protection offered to members by the International Group system.

This offered Peter his first introduction to the shipping markets through hull underwriters and The Michael , where he saw the West of England in action on an FD&D claim. It made him think that there was a more challenging world calling outside the confines of the bar, "I disliked the theatre of the criminal courts and decided that a career in litigation was not for me", he says.

So in 1978 Peter became claims correspondent with The West of England and soon found himself at the sharp end of a more practical world. Within three years he was posted to Hong Kong. "In Hong Kong the club was run as a business, where the owners wanted immediate advice on all aspects of their relationship with the club, not just on claims. I had to learn on my feet," says Peter, with the alacrity of somebody who clearly thrives on demanding situations.

After three and a half years in Hong Kong, Peter moved back to London, this time from claims to underwriting Class 2 FD&D. "There was a deteriorating financial position for the club's FD&D business in 1985/6 that had to be dealt with," he says. "This gave me a powerful experience of turning around financial adversity. I had to learn how to persuade members that they were still in the right FD&D organisation, having paid more premium than they had expected to, and to demonstrate that the benefits of staying with the club outweighed the costs."

In 1990 Peter moved again, to become - at very short notice - director in charge of underwriting. His lack of underwriting experience didn't worry him. His previous experience of handling claims had given him a real insight into underwriting for shipowners. He took over the helm at the West of England in 1995, at the age of 41.

In common with all the cubs, the West of England has seen huge changes in the last decade. "During the 1990s," says Peter, "we had to transform the West of England from a 19th century to a 21st century enterprise. This meant we had to generate a greater asset base and be more financially competent. We had to undergo transition throughout the 1990s in extraordinary circumstances. Indeed, the P&I industry as a whole had to reassess what it was doing at that time."

Peter remains adamant about the depth, power and protection offered to members by the P&I International Group system. While fixed premium facilities have proved to be a threat as well as a source of healthy competition to the clubs, Peter believes that they will, in the longer term, be poor imitators of the International Group product.

"1999 was an unusual year," explains Peter. "Partly as a result of uncertainty created by the lengthy negotiations with the EU competition directorate over the International Group agreement and the pooling arrangements, and partly because of a general tendency towards merger and consolidation in many other industries, the group clubs had to consider whether or not the long-established system of mutuals sharing claims within the International Group should be changed in the long-term interests of their members.

"Some clubs are offering to provide access to hull and machinery or other products alongside P&I. Others have announced plans to establish joint ventures or strategic alliances with commercial underwriters. The question of whether or not the West of England managers will develop alternative products has been under review for some time. Such diversification would only be approved if it was felt that there was a real demand from members.

"We are looking for commercially minded layers who are themselves looking for commercially realistic solutions."

"The key issue is whether or not club managers can really add value for shipowners by buying and servicing their hull and related requirements. At the West of England, we feel that this may expose us to undesirable conflicts of interest, and so damage our relationships with members and jeopardise the significant competitive advantage that we have over the commercial market in servicing our members' claims and providing them with professional advice.

"Over the next five years the P&I clubs in the International Group will be providing very much the same service as they always have done. This is because of the enormous power of the group's pooling and reinsurance programme. Certainly, clubs will seek to provide additional services to shipowners - if shipowners want them. But there won't be a wholesale radical turnaround of the P&I industry.

"The majority of clubs have emphatically reaffirmed their commitment to mutuality and to the International Group system in recognition of the inestimable benefits of low-cost claims-sharing across the entire industry through the pool.

"If group clubs demutualise and convert to fixed premium facilities, they cease to be members of the pool, sharing claims and the group's reinsurance facilities. They then end up with something which is of less value than the group's product, because the commercial equivalent cannot reinsure so comprehensively.

"The resilience of the International Group has already been demonstrated during the tough economic climate of the 80s and 90s, throughout the EC review, and against a number of imitators. It will continue to face challenges such as the threat posed by US-type legislation on oil pollution motivated by incidents like the Erika, where the clubs are working hard to lobby against an over-reaction by the EU."

The West of England deals with lawyers from all over the world. Lawyers are essential to the execution of the club's business. Inevitably, standards vary. Peter's criteria for choosing a lawyer is to look at what kind of lawyer the club wants, from what firm and from what jurisdiction, before starting the clock ticking on behalf of a member.

"One or two obvious but invaluable characteristics for us to look for are a keen sense of commercial reality, the ability to give a quick assessment and advice at the scene of an incident, and value for money," explains Peter. "We are not in the business of litigation. It is a last resort for us, an admission of failure even. We are looking for commercially minded layers who are themselves looking for commercially realistic solutions.

"We prefer to choose a specialist firm which looks at the club and its members as important clients. Not all firms value the clubs as a significant source of revenue. We want a firm that understands our business, which can be complicated, and we want a firm that will commit itself to providing in-depth strength within its specialist role.

"Sadly, our universal choice of forum for litigation is no longer the English court system. It is now too expensive. It is a rich irony that we are now often better off in the US for certain types of cases, although not personal injury. In France, the system of one court expert as the facilitator of a quicker form of resolution can also produce a less expensive solution - even if there is a risk of arbitrariness.

"We are pleased to see the English legal system's response in the form of the Wolf Report, and we like its efforts to encourage the process forward in a fair and non-litigious way that encourages mediation. But the jury is still out on the question of whether it will actually provide the promised changes".

There remain plenty of challenges ahead for Peter, but none so demanding as to prevent him from living his life. Peter likes to keep fit. On any weekend you can catch him on his mountain bike, cycling about thirty miles across south London, from his home in Streatham, along the Thames, to Richmond and Ham. His wife and four daughters keep his feet firmly on the ground, and the family spends summer holidays walking and winter holidays skiing at their chalet in the Swiss Alps. "I also spend several hours a week in our garden. I particularly like pots, and the terrace is now so full that there is hardly any room to sit down and enjoy them all," says Peter.