Indemnity insurance

A solicitor has successfully challenged a demand to stump up nearly £150,000 in unpaid assigned risks pool premiums. He was able to show that the ARP’s manager had not established that he was personally liable for the debt of the LLP in question.

There are signs of a softer professional indemnity insurance market for some law firms this year, but underwriters are looking to handle alternative business structures with care, a new report has claimed.

Our latest round-up includes the pre-pack sale of a Devon law firm, new business wins for Pannone and Gateley, the merger of big-hitting law firm consultancies, a new PII offering for small firms, and a bogus e-mail warning from the SRA.

When I’m out meeting new firms, writes John Thomas of LawNet, all too often when I ask managing partners about the cost of their PII, they do not know. Not many can tell me to the nearest £10,000 and some have no idea at all, having devolved responsibility to the ‘insurance partner’. But is this acceptable in a world of change and challenge, and constant pressure on costs?

Scrapping the ban on solicitors referring clients to tied financial advisers would “make them prey to every tied or multi-tied product salesperson in the land”, leading to massive claims on the compensation fund and negligence actions, the SRA has been warned.

Axis Specialty plc has become the second new A-rated insurer to enter the professional indemnity market for small law firms in a week. The news comes in the wake of AmTrust Europe Ltd setting out its stall for sole practitioners.

The number of solicitors struck off in the year to March dropped by 43%, while the number of negligence claims against solicitors reaching the High Court has also fallen, a flurry of new figures have shown.

Ten brokers and nine professional indemnity insurers have agreed to use the Law Society’s prototype standard application form. The eventual aim is to allow solicitors to fill out a single PII proposal form that will be accepted by all.

Our regular round-up includes strong backing for intellectual property ABSs, Eddie Ryan leaving Co-operative Legal Services, a new digital copyright licence for law firms, an “unacceptable” lack of transparency over PII commissions, and a warning that law firms are being targeted by online espionage.

Fifteen solicitors have had sanctions imposed by the Solicitors Disciplinary Tribunal – including indefinite suspensions – for failing to pay the premiums demanded while their firms were in the assigned risks pool, with 15 more still to face the tribunal.

Professional indemnity insurers will have to disclose their credit ratings to solicitors under plans to be approved by the SRA next month. However, it is to drop the requirement that insurers give policyholders a month’s notice of their intention not to renew cover.

A former senior solicitor at City firm SNR Denton is facing a £600,000 bill after the High Court ordered her to repay the firm and its insurer losses they suffered as a result of her involvement in the payment of a bribe.

Mid-tier law firms are over-engineering their risk management and compliance functions, spending more than both bigger and smaller practices for far less return, new research from Lockton has claimed.

Regulators should empower consumers to drive improvements in the quality of legal services, while professional indemnity insurers could hand over firm-specific claims data to help target poorly performing practices, the Legal Services Board has suggested.

A City law firm is to license out to other practices a matter risk management system that has helped eliminate claims against the firm in recent times and saved around £600,000 a year in professional indemnity insurance premiums.