The number of applications from law firms to enter the assigned risks pool in its last year is back to pre-crisis levels, the Solicitors Regulation Authority has reported. This year the profession is liable to pay the first £10m in claims that arise from the pool.
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.
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.
Our latest news round-up cover the SRA’s view of HSBC’s conveyancing undertaking, a fall in the number of firms closing ahead of PII renewal, a warning over merger failures, the Co-op seeking legal apprentices, and key appointments at Irwin Mitchell, the Law Society and CIPA.
Law Society calls for new approach to sharing ARP liabilities so that solicitors are not left to pick up tab
Solicitors and insurers should share equally any exposure to the assigned risks pool in the 2012-13 indemnity year to ensure insurers have “skin in the game”, the Law Society is to urge. However, the profession’s liability could still reach £30m.
Solicitors paid £256m for the compulsory layer of professional indemnity insurance – the highest amount since the first year of buying insurance on the open market – Solicitors Regulation Authority figures have shown.
Professional indemnity insurers will have to leave quotations open for at least five days and provide information about their credit ratings under plans being considered by the Solicitors Regulation Authority. Voiding policies is also back on the agenda.
Just 53 law firms have failed to find professional indemnity insurance and so entered the assigned risks pool (ARP), provisional figures have shown. At the same stage last year, 409 firms had entered the ARP. Firms still have a month in which they can find secure insurance and backdate it to 1 October.
Almost a quarter of law firms in the assigned risks pool had already decided to close a week before the renewal deadline, while the Solicitors Regulation Authority has flagged up the “serious risk” of other firms practising without insurance.