Indemnity insurance

The Council for Licensed Conveyancers (CLC) is planning to introduce solicitor-style indemnity insurance arrangements, in a bid to make it easier for law firms to switch regulator. Embracing an open market scheme instead of a master policy would help “make a reality” of the “theoretical” freedom of law firms to change.

More than one in five law firms have been targeted by scammers in the past year, Law Society research has revealed. Money was successfully stolen from client account in 8% of these cases. However the society’s annual indemnity survey found that average premiums paid by firms with up to 25 partners were down by 8%.

The conveyancers on both sides of a property fraud have been found jointly liable for the £470,000 loss suffered by the buyer. The ruling of His Honour Judge Pelling QC, sitting as a High Court judge, is the first authority on the obligations owed by a seller’s solicitor to a purchaser.

The Court of Appeal has overturned a High Court ruling that had protected law firms from financial risk through restricting the way professional indemnity insurers could aggregate multiple claims. However, the case is not over as it has been sent for retrial.

Two former clients of Suffolk law firm Gotelee who were only awarded £250 in damages after a finding of negligence have failed in their bid to increase this to £100,000. The firm admitted that it negligently failed to advise the developer claimants that there was a planning restriction attached to a property they bought.

Findings of dishonesty, especially against solicitors, should not be made without “the most careful consideration” of what they say in their defence, appeal judges have warned in a case in which they overturned a High Court decision that two solicitors were guilty of “dishonest assistance in a breach of trust”.

Elite Insurance, one of only three unrated indemnity insurers of law firms and the only one based in Britain, announced yesterday that it is leaving the market. Elite cited increased risks of client account fraud and the government’s planned increase to the small claims limit as reasons for the move.

A barrister’s advice to a claimant to settle her case at the doors of the court after a key witness failed to appear was not negligent, the High Court has ruled. It has been described as good news for the profession given “a climate of post-settlement remorse” among claimants.

The Court of Appeal has reduced by almost two-thirds the balance awarded to the seller of a law firm by the High Court, after ruling that – among other things – the trial judge had been wrong not to award the buyer damages for a misrepresentation of the firm’s finances.

It would be wrong to assume that it is “inherently more improbable” that a professional person will be dishonest than anyone else, the High Court has said. In his ruling, HHJ Saffman said the sole practitioner involved had misrepresented “the true position” in an attendance note.

Three solicitors from East London have been fined by the Solicitors Disciplinary Tribunal for failing to secure or check that indemnity insurance was in place for their firm, and continuing to accept new clients when they should have been closing it down.

The Solicitors Disciplinary Tribunal has voiced “serious doubts” over whether a solicitor, aged 79 and “with almost 50 years of exemplary service”, should have been referred to it for prosecution. Reginald Hemmings told the tribunal he found the experience “extremely distressing”.

The High Court has found a Newcastle law firm’s conduct an abuse of process after it repeatedly failed to pay the proper court fees when it issued claims. As a result, some of the professional negligence cases it was pursuing against another firm were time-barred.

A Midlands law firm making a claim for fees against former husband-and-wife clients has successfully applied for their £2.6m negligence counterclaim to be struck out. The court emphasised that a breach of fiduciary duty by a solicitor does not necessarily mean their entitlement to be paid is forfeited.

Personal injury, commercial and family work will all fuel negligence claims against lawyers, insurance specialist BLM has warned in a white paper. It also predicted that a new source of claims could come from the “rapid pace of reform” in legal services, testing new systems and processes “to their limit”.