PII: ‘Failure to advise’ the main cause of claims
An “ethical and supportive working culture” has become “not just beneficial, but vital” to the future of law firms, a leading professional indemnity insurer has said.
QBE said that in an environment “where traditional errors continue to drive a large proportion of claims”, it was “understandable that many firms feel the strain of balancing established risk controls with growing external pressures.
“The years ahead are likely to bring intensified regulatory scrutiny, expanding technology-driven risks, and stricter enforcement across areas such as financial management, ethical compliance, and ESG [environmental, social and governance] obligations.
“Prioritising wellbeing, effective supervision and compliance support, alongside an environment where concerns can be raised safely and in the knowledge of effective investigation, will all contribute to a strong foundation for navigating change.
“Such focus can only help to strengthen resilience, protect your balance sheet and reputation, and give teams the confidence to meet new challenges as they arise.”
In a report on the risk landscape for solicitors in 2026, QBE highlighted how the Solicitors Regulation Authority expected firms to embed ethical conduct into their organisational culture, not merely within compliance documentation.
They should “reinforce” ethical decision-making through clear policies, regular training, and strong supervisory frameworks.
“Governance structures need to ensure consistent escalation of ethical issues, supported by documented procedures and accessible guidance.
“The promotion of a culture where concerns can be raised openly, will be listened to, and investigated diligently is a vital role of senior leaders. Periodic audits to test policy efficacy and identify emerging risks can support this objective.”
QBE reported that for the year to September 2025, residential conveyancing accounted for the highest number of claims, at 45%.
It was followed by wills, trust and probate (30%), commercial conveyancing (9%) and litigation (6%).
When it came to the causes of QBE’s claims over the past six years, ‘failure to advise’ was the top category for law firms of all sizes.
“Claims alleging failure to advise often arise from inadequate scoping, poor communication during a transaction, or gaps in responsibility when multiple teams or external parties are involved. Advice or records can easily be overlooked in these situations.
“Clients frequently lack understanding of legal processes and associated risks that may seem obvious to lawyers.
“While commercial clients are generally more informed, many still claim ignorance when issues arise or strategy changes, leaving solicitors vulnerable when advice is not clearly documented.”
The second biggest cause of claims depended on the size of firm. For those in the top 100, it was drafting errors. For the rest, it was failure to follow instructions, which did not feature at all as a reason for top 100 firms.
Failure to follow instructions was a particularly big problem for firms with up to 10 partners, where it accounted for 42% of claims.
Third on the list of causes of claims for law firms in the top 100 was missed deadlines, time limits or delays. For other firms, it was drafting errors.
Looking at the present risk landscape, QBE said: “Staff attraction and retention still proves a challenge for many firms along with maintaining productivity in a hybrid working environment.
“A focus on healthy working practices, supportive supervision, and work-life balance can all contribute to a less stressful working environment which can both reduce errors and deliver strategic advantage.”
On artificial intelligence, the insurer said recent judgments had “underlined the importance and responsibility of law firm leaders in ensuring the safe and ethical use of AI through clear policies, supervision, human review, and staff training”.
Among key risks for the future were the forthcoming role of the Financial Conduct Authority in supervising anti-money laundering and counter-terrorism financing, the Employment Rights Bill, the court case brought by insurers against the SRA over Axiom Ince, the SRA’s second consumer protection consultation, and the expiry next month of the limitation period for Covid-19 business interruption insurance claims.
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