SDT: insurance application errors “carelessness not misconduct”

Treverton-Jones: solicitors were careless but nothing more

Treverton-Jones: non-disclosures were “minor matters”

Two partners have been cleared by the Solicitors Disciplinary Tribunal of misconduct relating to errors and omissions in their firm’s application for professional indemnity insurance (PII), and unusually were allowed to maintain their anonymity throughout.

It found the firm’s insurance proposal form had been “incorrectly completed in parts… due to carelessness… rather than deliberate conduct”.

Solicitors, the SDT said, “were human and could make mistakes”, and that would not on every occasion amount to a breach of principle 6 (maintaining public trust).

The pair, each admitted more than 30 years ago, were assisted by the fact that their insurance company confirmed that while unsatisfactory information was provided, it would still have offered insurance on the same basis.

The solicitors were represented by Gregory Treverton-Jones QC of 39 Essex Chambers. It was explained during the hearing that the services of leading counsel were required because one of the partners had a judicial career and the instruction was therefore “proportionate”.

The practice had entered the extended indemnity period on 1 October 2013 after failing to obtain cover. One day before the firm would have had to close, on 31 December 2013, it was offered an insurance policy. In the following month, the Solicitors Regulation Authority requested copies of the certificate of insurance and the completed proposal form.

The SRA decided to prosecute for the failure to notify the insurer of various regulatory matters dating between 2004 and 2009. But the partners argued that, variously, one of their lawyer’s regulatory history was outside the relevant ten-year time period, while there was no category on the proposal form covering the need to report that the firm had received a letter of advice from the SRA.

In relation to a complaint that went to the then Legal Complaints Service, the partners did not believe that agreeing to make a £75 payment would be regarded as an investigation.

The SRA contacted the firm’s insurer, which said that while it would have expected to have had the matters disclosed, “in isolation we do not consider them to be material” and that while full disclosure “would have made the decision to offer cover more difficult”, it confirmed that “on the balance of probabilities we would have still offered insurance on the current basis”.

The tribunal recorded that on behalf of the pair, Mr Treverton-Jones said the non-disclosures “were minor matters which, in any event, had made no difference to the insurers… that making any simple mistake on filling in forms could not amount to a lack of integrity and that there must be a deliberate mistake. The respondents had been careless but nothing more than that”.

The tribunal concluded the pair had not acted with a lack of integrity. It accepted the first respondent’s evidence that her focus had been on the firm’s claims history and not on its regulatory history, and accepted that the second respondent was entitled to consider that a “letter of advice” given by the regulator was not the outcome of an investigation.

It said: “The tribunal having considered all matters was satisfied that the proposal form for indemnity insurance had been incorrectly completed in parts but, having heard evidence from both respondents, the tribunal concluded this had been due to carelessness or misinterpretation, rather than deliberate conduct.

“The tribunal was satisfied the lapses by these respondents did not amount to a lack of moral soundness or a failure steadily to adhere to an ethical code. There had been no intention on the part of the respondents to hide or conceal information from the insurer and the tribunal was satisfied they had not acted with a lack of integrity.”

Unusually, the tribunal agreed to maintain the anonymity of the solicitors in the circumstances, because “publication of the respondents’ names would be disproportionate to them”.


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