Professional indemnity insurers are to provide guidance for solicitors on the way the risk they pose is assessed as part of a push to ensure there is no discrimination in the renewal process.
Following a meeting called by the Equality and Human Rights Commission (EHRC), the Association of British Insurers (ABI) also agreed to work with its members to review their proposal forms and the underpinning criteria used to assess risk, and review and report on the equality and diversity work undertaken by their members.
The news comes as findings from the Law Society’s indemnity helpline indicate that black and minority ethnic (BME) solicitors are “highly likely” to have been impacted disproportionately in this year’s renewal.
The Law Society, Solicitors Regulation Authority (SRA) and Financial Services Authority were also present at the meeting, which was triggered by concerns expressed by the society over evidence of possible discrimination  against BME solicitors in the insurance process.
A report to today’s meeting of the Law Society’s membership board said: “The ABI and broker representatives appear to have difficulty in accepting that discrimination in relation to their activities was possible. They have a lack of understanding as to what is meant by indirect discrimination and why their actions may be in breach of the equality laws.”
The report said insurers were unaware of the importance of transparency if they were to seek to justify indirect discrimination, and also identified a lack of equality and diversity policies, equality proofing processes and training staff in equality as “areas that needed to be addressed by insurers”.
It said that the Financial Services Authority made no contribution to the meeting because it considers that it has no role to play at present in reviewing insurers’ practices.
The report added: “The Law Society will continue our proactive dialogue with the EHRC on how to address the equality and diversity actions of insurers and to continue identifying any disproportionate impact of their actions on BME solicitors.” The society is researching the 2010 renewal process to see if there were any differences in treatment and outcome for BME solicitors. “We will engage with the EHRC to have in place agreed deadlines for all the action points.”
The board was told that the majority of callers to the helpline were sole practitioners and firms of two-to-four partners. As the majority of BME solicitors work in such firms (over 50% of BME solicitors do, as opposed to 28% of white Europeans), “it is highly likely that they have been impacted disproportionately than the wider profession”.
Follow-ups with some BME callers who complained of discriminatory practices “confirm that the criteria applied by insurers could be having a discriminatory impact on BME solicitors”, the committee was told. Findings included that all of these BME solicitors followed up had foreign surnames, had east London post codes and conducted conveyancing and/or immigration. “Immigration does not fall in a high-risk category,” the report pointed out.
At the same time, the SRA released figures recently showing that the premium paid by solicitors for the compulsory layer of insurance surprisingly fell this year to £214 million. The SRA has announced an audit of how insurers compiled their figures.
A newsletter issued by Liverpool-based law firm Legal Risk yesterday said the figure was “highly misleading because many firms with top-up cover – large and small – reduced the cost of their compulsory cover by placing it higher in their insurance programme, which reduced insurers’ contribution to the assigned risks pool”.