Minority report

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By Neil Rose, Editor, Legal Futures

Equality before the law: are firms of all colours treated the same by insurers?

The Solicitors Regulation Authority (SRA) has learnt the hard way about how sensitive issues around black and minority ethnic (BME) lawyers can be.

Readers may recall the almighty row that erupted in 2008 over the disproportionate number of BME solicitors who face regulatory sanctions. The SRA eventually managed to defuse it by bringing in Lord Ouseley as an independent reviewer, but the frustration was that this pain was largely self-inflicted. Some 18 or so months earlier, the SRA had published an initial report which identified the problem and some of the possible reasons, but then it failed to follow this up. It was, in my view, the stand-out failure of the previous board, which ended up on the back foot when it could have been on the front.

So one imagines SRA staff and the new board have trodden with huge care in the face of opposition from the Black Solicitors Network (BSN) to the proposed reforms of the assigned risks pool (see story). The SRA’s own equality impact assessment indicates that BME firms will be disproportionately affected by the changes, and as board member Yvonne Brown – a former chairwoman of the BSN and the only BME member of both the previous and present board – has repeatedly pointed out, does not explain why. How, she therefore asks, can the board take the step of approving them?

The answer, it would appear, is that the pressing need to clamp down on the disaster-in-the-making that is the assigned risks pool in the interests of both consumers and the profession trumps these concerns, particularly as numerically only a relatively small number of BME firms are likely to be affected. Further, the assessment recommends a series of measures that will mitigate the adverse impact on BME solicitors – these looks good on paper in terms of extra support and so on, but like election manifestos one is never entirely convinced such general promises will not be forgotten as time passes until they actually happen.

Rightly or wrongly, some BME solicitors may view this outcome as evidence of the SRA paying nothing more than lip-service to their concerns and simply deepen the distrust that seems to exist between the two. But the broader issue here, which the BSN also addresses, is whether there is prejudice against BME firms hidden in the professional indemnity insurance market.

The Law Society has also alluded to these concerns in its recent survey of the 2009 renewal experience (see story) and has promised to take them up with the insurance market. It is not hard to predict how insurers will react – just read the letter from the Association of British Insurers that forms part of the equality impact assessment. This refuted any suggestion of discriminatory behaviour in the strongest terms, while also making it clear that insurers are happy to engage with BME solicitors over their concerns. Proving that discriminatory behaviour is going on, if indeed it is, will be exceptionally difficult; as the letter points out, anecdotal evidence is not enough when the allegation is so serious.

The BSN talks about legal actions and complaints to the Equality and Human Rights Commission, but right now only one thing is sure: equality will continue to be the most nuclear of hot potatoes for the SRA.