45. Negligence and Breach of Duty Claims - Lavelle Coleman

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of their decision. It can direct compensation payment not exceeding 3,000. The complaint may be referred to an independent adjudicator, who can revisit the file. Alternatively, the matter can be sent directly to the Solicitors Disciplinary Tribunal. The Disciplinary Tribunal investigates allegations of misconduct against solicitors. A complaint can be referred directly to the Tribunal or can be referred by the Complaints and Client Relations Committee. If the Disciplinary Tribunal considers the misconduct to be sufficiently serious so as not appropriate for the exercise of the above sanctions, it may report to the High Court. The High Court has an inherent jurisdiction over solicitors. In referring to the High Court, the Disciplinary Tribunal must form an opinion as to the fitness of the solicitor to practice and recommend sanctions. The High Court may strike off solicitor, suspend practice, limit practice, restrict practice or censure or fine the solicitor. conditions of insurance cover. The rules were revised in 2008 to provide revised minimum terms'. Under the minimum terms, the insurer may not disclaim liability under the policy by reason of non-disclosure of material risks, misrepresentation and even fraud. This changes the utmost good faith principle which usually means that an insurer can avoid an insurance policy, if all material facts are not disclosed. The insurer must cover the risk even where the matter concerned was deliberately withheld at the renewal of the policy. There is a proposal at present (September 2009) to further amend the minimum terms for the next insurance period (commencing December 2009) on account the difficulty that the new minimum terms have caused in procuring insurance for some practitioners at a reasonable cost. There is also a proposal to exclude cover for certain types of solicitors undertakings in commercial property loans. Professional Liability Insurance Every solicitor must maintain professional indemnity insurance at a level of no less than 2,500,000 per claim as a precondition to obtaining an annual practising certificate. The rules lay down minimum terms and The Law Society has created the assigned risks pool for solicitors who cannot obtain insurance cover in the open market at a reasonable cost. Once in the pool, the solicitor is subject to Law Society supervision and must undergo a risk management assessment and audit. There
is a limited time during which a firm may remain in the assigned risks pool. If they cannot obtain insurance in the open market after this period, they cannot continue to practise as sole traders. All commercial insurers must participate in the assigned risks pool and carry a proportion of its risks. If a solicitor is discharged from the assigned risks pool, he may no longer continue to practise unless he obtains insurance in the open market once again. A solicitor is obliged to notify an insurer in writing of any a possible claim once it comes to his attention. This also applies to a circumstance which may give rise to a possible claim. Once notified the circumstance will be dealt with under the policy in force when notified, irrespective of when the claim is made. The Law Society keeps a record of insurance cover, which is available for inspection. This gives details of solicitors and the qualified insurer When a solicitor ceases to practice he must maintain run off insurance for a period of six years from the end of his last year he ceases to practice. This is designed to cover subsequently notified claims. Retirement is sometimes dealt with by extending cover of the remaining partners to cover retired partners or employee for liability arising from pre-retirement work. Insurance Claims Solicitors professional liability insurance is on a claims made basis. This means that there must be a policy in force when the claim is made or when the circumstance that might give rise to the claim is notified. The insurance covers the solicitor's practice as a solicitor rather his personal activities. The insurer usually conducts the legal action on behalf of the solicitor. It will appoint its own solicitor and will be entitled to make the key decisions in relation to the conduct of litigation. Compensation Fund The Solicitors Compensation Fund is financed by contributions by each solicitor. A person seeking a grant from the fund must apply within three months of the matter concerned coming to his attention. The purpose of the fund is to ensure that a person who suffers loss due to a solicitor's dishonesty is not left without a remedy. The person may be required to seek recovery of monies through all other available means (e.g. by a negligence claim) first.
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45. Negligence and Breach of Duty Claims - Lavelle Coleman

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