Indemnity insurance

Three leading law firms being sued for unlawful means conspiracy have been awarded a multi-million pound security for costs order.

The Solicitors Regulation Authority’s plans to reform professional indemnity insurance and the compensation fund put too much risk on consumers without any commensurate benefit, a watchdog has warned.

The Court of Appeal has overturned a ruling that leading Welsh firm Hugh James did not have to pay a former client damages even though it had provided negligent advice. It is the latest in a long line of negligence cases to come out of the government’s miners’ compensation scheme.

The Law Society has launched a fierce attack on the second attempt by the Solicitors Regulation Authority to reduce the indemnity insurance and compensation fund requirements for solicitors. The society opposed all the main proposals, including a new £500,000 minimum limit for compulsory indemnity cover.

Conveyancers are facing higher professional indemnity insurance costs – and their clients higher fees as a result – due to yesterday’s Court of Appeal ruling in Dreamvar, experts have predicted. One said the judgment “will provide greater protection to buyers, but will shake up the conveyancing industry with much greater risk of liability”.

The Solicitors Regulation Authority has today unveiled its second attempt to reduce the compulsory level of professional indemnity insurance to £500,000 – although conveyancers would have to secure £1m in cover. It also wants to turn the Compensation Fund explicitly into a ‘hardship’ fund and ban relatively wealthy people from claiming on it.

A threat to make a former partner of a corrupt solicitor who was part of a £30m mortgage fraud pay £205,000 in damages has been lifted when the High Court struck out a claim by one of the mortgage companies.

A bank that relied on inaccurate information supplied by its borrower’s solicitor should not have won a negligence claim against her, because it failed to carry out its own checks, the Supreme Court has ruled. It restored the ruling of the judge at first instance, who held that the bank did not act reasonably.

A Kent law firm was negligent for failing to advise properly on a mortgage and valuation report, but this did not cause a couple in Canterbury to buy a house suffering from subsidence, a circuit judge has ruled. He said it was not the firm’s duty to “advise about structural matters when there was a structural survey available”.

If the Legal Services Board is serious about promoting access to justice it must end its silence on the legal aid cuts, lawyers’ organisations have said. The Bar Council accused the oversight regulator of acting like “another department of government” by refusing to comment.

Law firms have taken advantage of a soft insurance market to secure 18-month professional indemnity insurance deals at a “very good” rate, a report has found. More firms were asking about additional cover to protect solicitors against defence costs in disciplinary proceedings, in the wake of the Leigh Day case.

The government is to ensure that leaseholders know how to sue their conveyancer where they may have been negligent over escalating ground rents, it has revealed. It is one of several new measures to cut out unfair and abusive practices within the leasehold system, announced just before Christmas.

The High Court has struck out a negligence claim brought against a barrister peer for breaching an extended civil restraint order – only to then permit the claimant to issue a further claim form. Max Couper is seeking to sue both Lord Thomas of Gresford – the Liberal Democrats’ shadow attorney general – and Irwin Mitchell.

A firm of solicitors should have warned a client of the significant risk that a tax avoidance scheme would not withstand a challenge from HM Revenue & Customs, the Court of Appeal has ruled. The client ended up having to pay £11.3m to settle with HMRC and issued proceedings against his solicitors the same month.

The Supreme Court is to review what needs to be proved when a solicitor is sued for failing to advise a client of a potential claim, in the latest of a raft of cases involving Raleys, the controversial but now defunct Barnsley law firm that acted for thousands on miners.