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of the assignments, setting out particulars thereof.
In this connection, solicitors should have regard to
Section 14 of the Landlord and Tenant (Ireland)
Act, 1860. Solicitors for Purchasers should request
the Vendors' solicitors to see that the giving of the
necessary notice of assignment is not overlooked.
Solicitors for vendors are also reminded that on
completing sales of property they should inform the
Rate Collector of the sale and the name and address
of the new owner of the property.
LLOYD'S SOLICITORS'
INDEMNITY POLICY
IN the
Solicitors' Journal
of i9th May last there is an
interesting report of an action against Lloyd's
underwriters by solicitors claiming indemnity against
liability for negligence on foot of the usual policy
issued by Lloyd's.
The case is entitled Simon,
Haynes, Barlas & Ireland
v.
Beer, but does not
appear to have been officially reported. As solicitors
are aware the standard Lloyd's policy of insurance
against liability for negligence by solicitors is an
indemnity to the insured party against loss arising
from any claim made against the insured during the
period of twelve calendar months during which
the policy subsists after issue and each renewal.
It is a condition precedent to the right to indemnity
under the policy that the insured should give
immediate written notice to the underwriters of any
claim made him in respect of which he claims
indemnity.
The policy contains a further clause
providing that if
(a)
the insured shall receive written
notice from any third party of intention to hold
him responsible for the results of any alleged
neglect, etc., or (£) if the insured shall
become aware
of any occurrence which
may
subsequently give rise
to a claim against him, and shall in either case give
written notice thereof to the underwriter during the
currency of the policy, then any claim subsequently
made against him on foot thereof shall be deemed
to be a claim made during the currency of the policy.
On each annual proposal for renewal of the policy
the insured is required to declare that he has no
reason to anticipate the making of any claim against
him for professional negligence. The plaintiffs in
the above action were insured under a policy which
was renewed for the period 3rd October, 1938, to
3rd October, 1939.
During the year 1935
the
junior partner Mr. Kenward had advised a Mr. Cook
in connection with advances which the latter made
on the security of debentures to a limited company,
and as the result of which he afterwards sustained
financial loss.
Throughout the transactions the
client had acted in a most unbusinesslike fashion
and to a large extent against the advice of his
solicitor. In 1939 he made a claim against the firm
for damages for negligence arising out of the
transactions of the preceding three years.
The
solicitors passed on the claim to the underwriters,
who advanced various contentions for avoiding
liability.
Finally
the underwriters
repudiated
liability under the policy but not the policy itself.
The insured on the advice of counsel settled the
action against them for £2,750, and then commenced
an action against the underwriters claiming indem
nity under the policy. The defence of the under
writers to the claim was in the form of a dilemma.
Either the insured had been negligent in 1935 or
they had not. If they had been negligent there were
facts within their knowledge when the policy came
up for renewal in 1939 which were unknown to the
underwriters and which were material to be known
by them before they accepted the proposal for
renewal. If the insured had not been negligent they
should not have settled the action against them.
Atkinson, J., in delivering judgment stated that
in his opinion there was nothing in the transactions
of 1935 which Kenward as a reasonable solicitor
ought
to have disclosed when
the policy was
renewed in 1939. He based his decision, however,
on the act that for some months after they had been
notified of the existence of the claim in 1939, and
then knowing everything,
the underwriters had
allowed the insured to think that the policy was good,
and that the insured had in fact changed their
position as the result thereof. Judgment was given
for the insured.
The nature of a solicitor's business is such that if
he is so unfortunate as to place himself in a position
where he is liable to a client for negligence, he is
unlikely to be aware of the fact before a claim is
made against him, perhaps after the lapse of years.
If the policy is not in force at the time when the
claim is made the solicitor will not necessarily be
covered, notwithstanding that he was insured at the
time of the alleged negligence which is the subject
of the claim.
If, however, during the currency of
the policy the solicitor becomes aware of the
possibility or probability of a claim against him
and notifies the insurers thereof before renewal,
any claim made afterwards will be deemed to have
been made during the currency of the policy even
if it is not renewed. In any event, failure to disclose
in any proposal for renewal any matter within the
knowledge of the proposer which would cause a
reasonable solicitor to anticipate the making of a
claim against him may afford a defence to the under
writers to a claim for indemnity under the policy.