Indemnity insurance

The Law Society has issued further reassurance to the 2,911 law firms insured by Quinn that there is no reason to fear for the strength of their cover. It came on the same day as the society also issued a practice note on the position if a qualifying insurer goes insolvent.

File reviews are generally seen by law firms as something they must implement to ensure they comply but the benefits are so often overlooked, explains Jaunita Gobby of compliance consultancy Legal Eye

A rising tide of claims against solicitors and a huge increase in the number of firms falling into the assigned risks pool means law firms should prepare for a 10% jump in professional indemnity premiums this year, broker Lockton has warned.

The Financial Services and Markets Tribunal has upheld a Financial Services Authority (FSA) decision permanently banning a solicitor from working in any capacity in financial services and fining him and the FSA-regulated law firm of which he is senior partner, £400,000.

The board of the Solicitors Regulation Authority today pushed ahead with reforms to the assigned risks pool (ARP) despite the threat of a legal challenge from the Black Solicitors Network. March’s “in principle” decision to close the ARP to new firms and halve the length of time firms can spend in it to a year was confirmed after the board considered a full equality impact assessment which concluded that both proposals had a potential adverse impact on race equality.

Nearly two-thirds of law firms saw their professional indemnity insurance (PII) premiums go up last year, Law Society research has found. The survey of 240 law firms also found evidence of “a growing divide in the PII market”, with smaller firms and black and minority ethnic (BME) firms finding renewal tougher than the wider profession.

Jim Watson, managing director of data destruction service Shred Easy, and Daniel Berke, a fraud solicitor at Lewis Hymanson Small in Manchester and London, look at data protection among law firms and discuss the recent decision to allow the Information Commissioner’s Office to levy fines of up to £500,000 to organisations which seriously breach the Data Protection Act.

Law firms currently in the assigned risk pool (ARP) have paid just 22% of their insurance premiums, while insurers are rapidly increasing the reserve for claims these firms may cause, it has emerged. The 262 firms currently in the ARP were liable for £7.5 million in premiums – both record figures – of which just £1.7 million has been paid.

The Law Society has told the 2,911 law firms which have their professional indemnity insurance with Quinn that they do not need to take action at the moment, despite a warning that they may have to seek fresh cover within four weeks of the company’s provisional administration being confirmed.

Duncan Finlyson of Lawyers Defence Group considers the implications of a recent Court of Appeal ruling that allows the court to reopen the decision to report suspicions of money laundering.

A solicitor has good reason to terminate a retainer if a client insists on putting forward a case and instructing counsel to advance contentions that they do not consider properly arguable, the Court of Appeal has ruled.

There should be a new core duty on financial management, along with requirements that firms disclose financial problems to their regulator, in the Solicitors Code of Conduct, the SRA has been advised.