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Solicitors Regulation Authority proposals to exclude lender and other financial institution claims from the scope of compulsory professional indemnity insurance will be “massively damaging to the profession” and lead to more expensive and longer conveyancing transactions for the public, Law Society chief executive Des Hudson has warned.

Solicitors are facing “bumper” years of claims for professional negligence as recession-driven legal actions start to bite, a leading broker has warned. The latest High Court figures indicate that negligence claims against solicitors rose from 80 to 210 in 2009, which is more than any other type of professional indemnity claim, and Lockton has predicted that the figure will continue to rise.

Law firms’ anti-risk measures are likely to be probed more thoroughly by insurers if the common professional indemnity insurance renewal date is abolished, according to a leading industry insider. He also revealed in detail a number of “creative accounting” techniques used by insurers to reduce their exposure to the assigned risks pool by declaring premiums that may be £60m less than actually received.

Solicitors Regulation Authority plans to exclude financial institutions from the requirement for compulsory professional indemnity insurance will drive some conveyancing firms out of business, the Law Society has claimed. The longer-term move to remove work for all commercial clients from the scope of the minimum terms and conditions of cover would be short-sighted, it adds.

Professional indemnity insurers are to provide guidance for solicitors on the way the risk they pose is assessed as part of a push to ensure there is no discrimination in the renewal process. Following a meeting called by the Equality and Human Rights Commission, the Association of British Insurers also agreed to work with its members to review their proposal forms and the underpinning criteria used to assess risk, and review and report on the equality and diversity work undertaken by their members.