Insurers bemused by SRA Proposals
Last night I attended a Middlesex Law Society COLF/COFA Compliance forum at the University of West London. The forum was presented by Michael Garson ,my Law Society Council colleague. The event was sponsored by JLT insurers and senior members of that organisation were present. JLT were scathing and critical about the SRA proposals. The SRA were accused of not consulting with the insurance industry before issuing their consultation papers. Some of their criticisms reiterate what others have said. The reduction on minimal insurance to a value of £500,000 will not reduce insurance premiums because most claims are under that sum. However a few new points were raised which all solicitors should be aware of.
The stock current £2 million level means that insurance companies can issue policies on the basis that they have not given any advice regarding the level of cover. That makes policies cheaper. Under the new proposals insurance companies would need to advise firms regarding the level of cover required. That would make policies a lot more expensive. The proposals on MDP would,it was predicted,result in insurance companies not offering insurance under the minimum terms and conditions to ABS and MDP. In relation to declarations regarding the health of a firm’s client account JLT pointed out that such a declaration is made in a personal capacity which is not covered by a firms professional indemnity insurance in the event that the declaration is erroneous or negligent. The cost of insuring the person making the declaration is likely to be several hundred pounds. JLT also criticised the SRA for tinkering with the wrong aspects of the Minimum Terms and conditions.