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Cost of Prison
Perhaps the biggest fillip to the penal reformers'
campaign to cut down the number of people in prison
was a paper produced by Christopher Nuttall, a Home
Office senior research officer. Ironically the paper took
issue with the penal reformers' claim that, because it
cost £35 a week to keep a man in prison (not including
supplementary benefits which have to be paid to his
wife and children) and only £4 a week to keep him on
probation, it was cheaper to place a man on probation.
The paper showed that the marginal cost of one
extra prisoner was much less than £35. The extra pris-
oner did not require extra staff, facilities, or in some
prisons, food. The marginal cost of one extra prisoner
could in fact be less than £4.
As Edmund Dell, the Labour MP for Birkenhead,
pointed out at the conference, one reason why the
marginal cost of prisoners was so low was because of
the readiness of the Prison Department to allow over-
crowding in prisons.
But the paper helps penal reformers in their cam-
paign because its main message is that it is no use
transferring a few prisoners to probation schemes and
expecting to save money. To achieve any economy,
radical transfers have to be made.
No one now doubts that there is a large number of
people in prison who do not need to be there. Police,
probation, and prison officials are all agreed that the
homeless, the alcoholic, and the mentally sick should be
somewhere else.
Mr. Nuttall's contribution has been to show that it
may be cheaper to be radical than timid.
The Guardian
(18 September 1973)
PROFESSIONAL NEGLIGENCE INSURANCE
AND THE LAW SOCIETY IN ENGLAND
by GEORGE B. BATES
It now seems almost certain that the Solicitors (Amend-
ment) Bill, albeit after a change of clothes, is unlikely
to pass into law owing to opposition from certain non-
legal members of Parliament who will persistently block
the Bill on the second reading.
However, it seems not unlikely that if the Bill is pre-
sented again next session it will at least have Govern-
ment backing if a Government Bill does not take the
place of the present private member's Bill.
The demise of the Bill cannot be a matter for regret
for, although it contains some useful provisions, there is
nothing in it which could not wait for a couple of years
if necessary for implementation, and other provisions
which ought never to be made law.
However, there is one clause in particular which did
not appear in the first Bill, but appears in the current
one, namely Clause 7, which gives the Law Society
wide powers i n regard to professional indemnity
insurance.
Law Society's proposal
Readers will remember the announcement which
appeared in the
Law Society's Gazette
on 11 October
1972 to the effect that the Council of the Society had
it in mind to consider taking care of solicitors' profes-
sional indemnity insurance either by itself establishing
a scheme or fund for this purpose or (more likely)
negotiating a single master policy with the insurance
market for the profession as a whole.
Whichever scheme is adopted, it is proposed that in
any event insurance against professional negligence
should be made compulsory for solicitors and that a
solicitor would not be able to obtain a practising certi-
ficate without effecting satisfactory insurance.
It is questionable whether the idea of compulsion is a
good one, having regard to the effect it may well have
on the size of premiums, since practitioners will be
liable to be forced into paying disproportionate prem-
iums. Certain it is that compulsion will not reduce
premiums, which are already a heavy burden on prac-
titioners. It would be interesting to know what percen-
tage of solicitors do, as not effect professional negligence
insurance. I suspect that the percentage is very low.
The Council of the Law Society obviously gave consid-
eration to one or other of these schemes in the (I think
mistaken) belief that professional negligence insurance
was becoming more and more difficult to obtain and
might become eventually unobtainable.
Specialist insurance market
I doubt whether this is so. What has happened in
practice is that many of the larger insurance groups
have left the underwriting of professional negligence
insurance to the specialist insurance market and this
has led to the mistaken belief that the capacity for this
class of insurance would eventually disappear. In recent
years there has been a withdrawal from the market of
non-specialist insurers, but this is entirely justified in the
light of the necessity to underwrite professional negli-
gence insurance upon the basis of a wide portfolio. I am
advised that correctly underwritten professional negli-
gence insurance is both attractive and profitable to the
specialist insurer.
On the other hand the increasing cost of insuring
against professional negligence is a matter of concern
for nearly all practising solicitors, particularly those who
have had the misfortune to have one or two claims in
the past.
It seems self-evident, however, that to give the mono-
poly of this type of insurance to one or even two com-
panies (i.e. the master policy scheme) will certainly not
reduce the cost of the premiums owing to the removal of
the competitive element which alone keeps premiums
down, although it may be beneficial to the companies
concerned on the basis of the premise stated above, that
it is necessary if professional negligence insurance is to
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