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GAZETTE
MARCH 1978
in the U.K. they were most insistent that insurance claims
must not be used for this purpose. Only time will tell who
was right.
Europe
When Ireland the the U.K. joined the EEC we signed
the Treaty of Rome and by doing so voluntarily agreed to
give up part of our sovereignty. As I understand the situa-
tion (and I am not a lawyer) one of the things we have
done is to transfer thefined court of appeal from our own
countries to the European Court in Luxembourg. As a
result of this, who knows what the legal poosition in any
one country is going to be in five to ten years time. We
have already had a test case of a lawyer being able to
move from France to Belgium or vice versa.
Let me quote a hypothetical case: we have a large U.S.
client firm with subsidiaries in several European countries
including the U.K. and Ireland. The U.S. parent
approaches a firm of English solicitors to look after their
European affairs. The English solicitor appoints an Irish
firm to look after the Irish subsidiary's legal affairs. In
presenting their consolidated report, the English .firm
includes the report of the Irish firm. Now let us suppose in
this fairy story that the Irish firm has made a mistake.
The U.S. client sues the English solicitor in the U.S.
courts and is awarded $10,00,000 (not an excessive sum
for professional negligence). The U.S. client then goes to
the U.K. courts who have no option but to ratify the
decision. The English solicitor is left with no option but to
seek redress against the Irish firm.
Now I will admit that this has not happened yet, but
bear in mind that if you become aware of a mistake today
it will probably be anything from five to ten years before
the matter is finally resolved. Is there anyone here who is
brave enough to say that in five to ten years time it could
not happen?
Ireland
As you know, Minet Ireland are the official brokers to
the Law Society of Ireland. It is rather difficult to be
precise, but our best educated guess is that only 30% to
40% of firms of solicitors carry any indemnity insurance
at all. This state of affairs cannot be in the interests of the
profession as a whole. I know that quite a large number of
solicitors have country practices, in what for centuries
have been very close-knit communities that stick very
closely together especially in times of adversity. And that,
in the past, if the local solicitor made a mistake the
client's attitude was — oh well, it was just one of those
things, anybody can make a mistake, I could not possibly
sue him, I play golf with him twice a week, anyway he is
married to my wife's cousin, things will work themselves
out.
In my opinion, these days are coming to an end. No
longer have you only got families living in an area who
have lived there for generations, but you have Americans,
Germans, French, Dutch, Belgians, Japanese and heaven
knows who else. But, as with all good things, there are
bound to be some disadvantages. When a person has
lived in a country for all of his working life he is bound to
pick up some of its bad habits.
There is a saying in a lot of the big cities in the U.S.A.
where a man will show you a dollar bill and ask you to
read what it says on the back, which bears the inscription
"In God We Trust" to which he will add "All others pay
cash." Maybe that is a bit cynical but it is an attitude of
mind which is not that uncommon.
Now I am quite sure that all of the gentlemen here have
P.I. insurance but I wonder how many of you carry high
enough limits. My own philosophy (and that is shared by
our group world-wide) has two basic principles in this
regard. Firstly, we in Minets buy the maximum limits that
are available in the world-wide market, and secondly, we
self-insure the largest deductible that we think that we can
afford.
Ignoring our size we have one very real advantage over
a firm of solicitors. We are a limited liability company,
wjiereas you are either sole practitioners or partnerships,
both with unlimited liability. A firm of solicitors has one
other disadvantage in that, if you are made bankrupt you
are automatically disbarred and are unable to carry on
earning your living in probably the only way you know.
Now I can't tell you how high you should go, you are
in a much better position to do this yourselves by looking
at some of the numbers involved with your larger clients.
As an example, I have more than one client in the U.K.
who has asked us to place limits of £100,000,000. (We
are unable to place such high limits but we can place very
substantial limits.) The attitude of these clients is that they
don't think they are going to make a mistake, however
they say they are involved in huge property deals,fleets of
supertankers and aeroplanes where the values run into
hundreds of millions and if they do make a mistake on
one of these it could be a big one.
When they find oil in Irish waters there is going to be
some very large business for the Irish legal profession on
top of business that is already here from large inter-
national companies. This should be of great financial
benefit to the Irish legal profession. Gentlemen, don't ruin
it for yourselves by not buying enough insurance.
NATIONWIDE INVESTIGATIONS
(Laurence Beggs)
126 Broadford Rise,
Ballinteer,
Dublin 16.
'Phone 989964
Independent Actuarial Advice
Regarding
Interests in Settled Property
and
Claims for Damages
BACON
A
WOODROW
Consulting Actuaries
58 Fltzwllllam Square
Dublin 2 (Telephone 762031)
34
This Is a slightly edited text of a speech, delivered by Michael Brooks of Minets, International Insurance Brokers,
London, to representatives of professional firms in Dublin on 20th January 1978.