The Gazette 1971

The assumption in (b) is that a client who suffers from his lawyer's negligence would not fail to com- municate the details to his own circle of friends, who in turn would pass them on to others. In some of the reported cases on professional negli- gence the mistake made was of an elementary nature, the circumstances showing that it was not a mere slip but arose from ignorance. If that sort of negligence results in unrecompensed loss to a client, the reputation of the profession is impaired through exposure of the want of competence in one lawyer and the failure of his fellows to have devised some means of avoiding its sequel. There will, no doubt, be other views. The com- petent, industrious practitioner should not have to bear any responsibility for the incompetent or lazy member who fails in his duty of care to a client. The negligence of one lawyer is his own concern and the client's loss is his own misfortune. This is mere sophistry. If the opening statement of this Part IV is true, and it is conceded that professional negligence is one of the targets at which this aim is directed, the area of respon- sibility might well extend to care for victims of the negligence of lawyers in the practice of their profession, to the extent that their losses are not met from insur- ance and the negligent member's own resources. This conclusion also makes professional negligence insurance the immediate concern of professional bodies : to pro- vide or secure for their members an effective insurance cover on reasonable terms; to ensure that every practi- tioner has that cover, as a condition of his right to practice, if need be; and to consider what might be done for the client whose loss is not made good. PART V : CONCLUSION Responsibility for the consequences of any person accepting the views expressed in this paper is expressly disclaimed by the Rapporteur. Enough has been written in the foregoing pages to present the topic as being not merely of lively interest, but of vital concern to the legal profession; touching, as it does, the individual interests of lawyers and the well being of their profession as a whole. 1. Name and address of proponent. 2. Full names of partners, qualifications, when quali- fied and how long practising. 3. Total numbers of partners and permanent staff. (a) Partners. (b) Staff, other than typists and office boys. (c) Typists and office boys. (d) Temporary staff. 4. (a) When was the firm established? (b) If under five years please give details. 5. Has any application for insurance made on behalf of the firm or any of the present partners or, to the knowledge of the firm, on behalf of its predecessors ever been declined, cancelled, or renewal refused? 6. Have any claims ever been made against the firm or any of the present partners, or against its prade- cessors in business or any past partner; or is the firm aware of any circumstances which may result in any claim being made against the firm, its predecessors in business or any of the present or past partners? APPENDIX A QUESTIONS IN PROPOSAL FORM

7. Have you been previously insured? If so, please give full details of policy, insurers and brokers. 8. Amount of indemnity required. 9. Do you require indemnity for any or all of the following extensions, for which extra premium is required : (a) libel and slander; (b) fraud and dishonesty; (c) loss of documents. APPENDIX B Mr. J. N. Creer, Chairman of the Special Committee mentioned below, has given a report on the group scheme sponsored by the Law Society of New South Wales, as follows : In 1968, the Law Society of New South Wales spon- sored a scheme of professional indemnity insurance which is now established as the "Solicitors' Professional Indemnity Insurance Scheme". The Society had no intention of participating in a scheme of this kind, but over a considerable period of investigation developed a concept of establishing group insurance and the basic feasibility research work was carried out by a Special Committee of Sydney practitioners, appointed by the Society, all of whom had specialised professional experi- ence in various aspects of insurance law. The Special Committee found that New South Wales solicitors had been called upon to pay increasingly high premium rates over the previous five years notwithstanding that relatively few or large claims had been lodged. The insurers, all of whom, of any consequence, were overseas based companies, explained the increased rates by claims experience in all the Australian states and, appar- ently, the worsening world situation in regard to claims for indemnity made by other professions. As a funda- mental matter, the Committee, therefore, sought to attract an Australian insurance company which would be prepared to assess its risk solely on the solicitors of the State of New South Wales and strike premium rates accordingly. With the assistance of a consulting actuary, the Committee, after some eighteen months work, suc- cessfully negotiated the group scheme at reasonable premium rates with a local underwriter which had very satisfactory reinsurance arrangements. The group scheme is available only to solicitors prac- tising in New South Wales and relies upon a partici- pation of a minimum of 100 members. The policies are all subject to a compulsory self insurance of $A2,000 with cover available up to $A100,000. Indemnity in excess of $A100,000 can be indepen- dently negotiated with the underwriters. As a financial inducement to the profession, the scheme has a group discount incentive related to annual premium. The scale of discounts applicable to the number of members who jpin is as follows : 100 to 250 members Group discount 10 per cent 251 to 500 members Group discount 15 per cent 501 to 750 members Group discount 20 per cent 751 and over Group discount 25 per cent In addition, the group scheme contains a profit shar- ing formula. The nett profit after claims and expenses have been taken into account will be ascertained at the end of a three years period and 20 per cent thereof will be credited to those members participating in the scheme during the term, in proportion to the premiums

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