Indemnity insurance

The surge in claims against solicitors over their advice to home buyers on ground rent clauses has begun, with 400 issued in less than a year, according to new research. It also identified the discount rate, undersettling and conveyancing fraud as the other big negligence risks facing the solicitors’ profession due to the wider economic environment.

The Court of Appeal has criticised law firms which attract clients through adverts which suggest their previous solicitors may have undersettled personal injury claims. It also said there should be “a sensible limit” on what should be expected of a solicitor operating on a fixed fee in a “high volume, low cost commoditised scheme”.

The furore over ground rents that double periodically is likely to lead to a “swell” in negligence claims against conveyancers, who will be “first in the firing line”, a barrister has warned. He said these leases also often have other clauses which may be considered unreasonable and so pose a negligence risk.

The Law Society has failed in its bid to strike out a negligence claim by a law firm that was the victim of a fraud after the details of another firm it had checked on the society’s online ‘Find a Solicitor’ facility turned out to be false.

A High Court judge has dismissed a negligence claim against London law firm Farrer & Co in a case involving a client with a $300m (£231m) trust fund. A companion of the man argued that the firm had owed her a duty of care in relation to a £5m gift that the trustees had agreed to pay her but then stopped.

The proportion of law firms targeted by scammers has risen sharply over the last year, especially among larger firms, as has the number of practices taking out cyber-insurance, according to new research from the Law Society. The survey on indemnity insurance also showed that a significant minority of brokers continue not to disclose their commission.

The Solicitors Regulation Authority is to change its indemnity insurance rules to make it easier for law firms to switch regulator, it announced yesterday. In a bid to encourage competition, the SRA will ditch the requirement that firms switching to another approved regulator have to buy run-off cover.

The High Court has struck out a negligence claim against London private client specialists Harcus Sinclair on the grounds that it was statute-barred. The judge said it could not be argued that a partner had deliberately concealed his conduct when it was “done in plain sight” of his client and other parties’ lawyers.

Appeal judges have rejected the pleas of a claimant who, faced by two law firms with similar names set up by the same solicitor, sued the wrong one. The court heard how Godfrey Morgan Solicitors and Godfrey Morgan Solicitors Limited were run “in parallel, as distinct businesses”.

Fee income per partner at larger firms soared last year from an average of £777,000 to almost £1.4m, a survey has found. Accountants MHA, who produce an annual benchmarking report, said the main reason was a fall in the number of equity partners at these firms, helped by an increase in profitable work.

A leading City law firm has failed to persuade the Court of Appeal to overturn a ruling that it was negligent in failing to highlight a major development planned to take place near a £26m residential property whose purchase it was handling.

The Court of Appeal has overturned a ruling that Raleys – the controversial but now defunct Barnsley law firm – should not have to compensate a miner who argued that its admitted negligence had caused him to settle a claim at an undervalue. Otherwise, it would be “far too easy for negligent solicitors to raise huge obstacles to claimants”.

The Supreme Court has upheld a ruling that a law firm which had been negligent in drawing up a loan facility agreement was not legally responsible for their client’s decision to actually make the loan. The decision has been branded as good news for solicitors, who “no longer appear to be expected to underwrite claimants’ risks and business ventures”.

The Supreme Court has sided with a leading professional indemnity insurer in interpreting the rules that govern the way insurers can aggregate multiple claims against solicitors. Overturning the Court of Appeal, it was ruling in claims by investors against a law firm arising from failed property developments in Turkey and Morocco.

TThe Court of Appeal has again allowed an appeal against a ruling giving a firm of solicitors summary judgment, this time in relation to a claim for non-payment of fees and a counter-claim of negligence against them.