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Professional Indemntiy Insurance - Top Claims

Non Contentious Still Top for Indemnity Insurance Claims

It is interesting to note with the Professional Indemnity renewal round almost on the profession, that in a recent study by AON insurance, Non Contentious law categories still top the table in terms of most numerous complaints. In fact, AON's top 3 are;

1. Residential Conveyancing

2. Trust and Probate

3. Personal Injury and Litigious Matters

 1. Residential Conveyancing

The main failure by solicitors for this category is not having due regard to their instructions embodied within parts 1 & 2 of the Council of Mortgage Lenders handbook.

Other problem areas include;

  • o Failures to undertake sufficient searches over properties
  • o Failures to advise on the difference between joint tenancies and tenancies in common
  • o Delays in registration of title, charges and restrictions within the priority period
  • o Failures to identify restrictions over land preventing use or development

 It should be noted that a handful of high value conveyancing claims could result in an otherwise good firm becoming uninsurable on the open market.

 2. Trust & Probate

Claims for this category of law have increased sharply, and can prove very costly to resolve and often do not have satisfactory avenues to rectify the error. Delays in administering estates continue to cause claims.

 3. Personal Injury & Litigious Matters

The problem areas for this category are as follows;

Failure to comply with time limits. The classic example for PI of course being a failure to issue proceedings within the three year limitation period.

The next most common cause of complaint is poor advice on the prospects of success. Claimants can feel let down when faced with an unexpected and often significant cost liability. Obviously solicitors cannot guarantee the outcome of litigation, but a failure to inform the client of the prospects of success at regular intervals in the litigation can result in a claim.

It seems the insurance industry opinion on claims is that they continue to arise not as a result of a lack of understanding of the law, but as a result of not closely supervising staff and simple administrative mistakes.

The key to minimising claims is still to have adequate risk management procedures in place.

Risk management is encompassed in the Lexcel standard. Anyone wishing to know more about how CPM21 can help a practice with this should visit;