I’m going to start by making a blanket statement: being a solicitor is hard. Firstly, with a full-time degree, an LPC and further training, it takes a minimum of six years to qualify. Secondly, it is a profession that requires continual training and development.
It encompasses all of this in addition to successfully managing clients and dealing with administrative tasks, all the while trying to impress your firm in pursuit of the ultimate goal – becoming partner.
That said, it is a very worthwhile and rewarding career, but it can be a stressful one. Then you add to this the confusing world of professional indemnity insurance.
PII. If you are unfamiliar, providing an individual solicitor or practice with coverage in the instance of a claim, PII is a requirement in the UK. The Solicitors Act 1974 outlines the legal necessity for firms to be covered by PII, in order to protect both solicitors and clients.
With regards to claims, one may arise for a number of reasons, including but not limited to an allegation of negligence, slander or confidentiality breach. The result can be costly, both in terms of finances and reputation.
However, although essential, PII can be somewhat confusing for legal professionals and practices. Enforced by the SRA, insurers have been required to provide firms with a regulated level of cover, regardless of size or speciality.
The SRA. Last month, the SRA released a proposal intended to review PII cover, with the aim of providing coverage that is tailored to the individual needs of law firms.
This comes after their initial findings highlighted expensive premiums and lack of competition in the PII market. The proposal could result in bespoke insurance packages, reducing the cost of premiums and encouraging new legal practices to open their doors.
Furthermore, research examined PII claims made during the last decade and found that the majority – 98% in fact – reach a settlement below the £500,000 mark. As a result, the SRA has proposed to set the maximum limit for claims to this figure of £500,000.
They have also highlighted the necessity of the run-off period PII covers, but have outlined plans to limited the amount between £1.5 and £3 million, depending on the firm and nature of work.
The chief executive of SRA, Paul Philip, has said of the proposal:
‘Our proposals will help firms – particularly small ones – make sure they are not paying more than they need to protect themselves and their clients. The public would still have an appropriate level of protection, while potentially benefiting from lower costs and more choice.’
The SRA has opened a consultancy period on the issue, until 15th June. As such, if you have any strong opinions on the issue, now is the time to speak up.
