The Gazette 1988

GAZETTE

APRIL 1 9 88

ground or, if it did, that it would be successful. It is believed that this is one of the reasons that the levels of premium for Top Up cover were not as satisfactory as the Board would have wished. It is the Board's view that the Market has not recognised that what they are being asked to insure is a situation where each solicitor is carrying the first £200 , 000 of each claim (that is the Fund on behalf of the member is carrying cover up to that level) and all they are being asked to do is to cover above that. On this basis given that so far as is known the highest paid claim in Ireland is £150,000 there is certainly support for our view that the Top Up premiums should be considerably reduced and it is hoped, with more time available, to make this case more effectively to the Market this year. This is a matter that will be given the highest priority. In this connection it is important that all members seeking quotations for Top Up cover return the completed Proposal Forms immediately. Of course all members and new appli- cants must complete a fresh Pro- posal Form. The decision of the Banks and Building Societies during the year to accept Certificates of Title from Purchasers' Solicitors in connection w i t h mo r t gage t r ansac t i ons, provided t hat So l i c i t o rs had indemnity cover, was certainly a boost to the Fund and enabled us to recruit a number of Solicitors who might not otherwise have taken out cover prior to compulsory cover being introduced. Although accurate statistics are not yet available, it is believed that about 90% of all Solicitors in practice now have cover against professional negligence which is very encouraging and should enable the profession to move

Report on the Professional Indemni ty Scheme by Maurice R. Curran, Chairman, Solicitors Mutual Defence Fund Limited

At the November 1986 AGM of the Society proposals were accepted for the introduction of compulsory indemnity cover and for the setting up of a mutual scheme by the Society. After discussions and research both in Dublin and London the Council of the Society in 1987 adopted the following proposals: 1. The precedent of the Medical Defence Union Scheme be followed through the estab- lishment of a guarantee com- pany to be cajled Solicitors Mutual Defence Fund Limited ("the Fund"). 2. The Scheme would provide cover for £200,000 in respect of eagh and every claim. 3. Top up cover above t he £200 , 000 should be sought from the insurance market. 4. Professional indemnity cover should be left optional for the time being. Initially pro forma Proposal Forms were completed by approximately 90% of practising members of the Society. On the basis of these forms Stop Loss cover in London was negotiated to protect the Fund against unexpected disaster in the first year. An analysis of these Proposal Forms by our Consultant Actuaries led to the conclusion that assuming the information in the Proposal Forms was accurate, the Scheme would be financially sound and the proposed reinsurance and bank facilities sufficient to ensure the stability of the Fund.

Fresh Proposal Forms on the basis of which the cover would actually be granted were sought from the Profession. These were compared with the originals and whilst there were obviously some variations none were found that were significant or that affected the basic structure and funding of the Scheme. The Board of t he Scheme decided on a premium of £1,000 in respect of each solicitor for £200,000 cover in respect of each and every claim. The Fund set itself a target of 2,000 participants in the first year. At this stage it is a pleasure to report that the Fund has 2,139 par- ticipating members representing 1,039 firms. It is expected that a further 47 solicitors representing 25 firms will have joined by 30th April 1988. The Board is very appreciative of the level of support from members of the Society, without which the Fund could not have succeeded. The members of the Profession will appreciate (though perhaps not to the same degree as the Board) the commercial pressures that were brought to bear by opposing com- mercial interests which did not wish Solicitors to join together to indemnify themselves against pro- fessional negligence claims. One of the results of this outside pressure was lack of belief in the London Insurance Market that the Fund would actually get off the

TYPE OF WORK FROM WHICH CLAIMS MOST FREQUENTLY ARISE

Conveyancing

Litigation Personal

Landlord & Tenant

Other Categories

Injury

Commercial Trust & Probate

Matrimonial

Taxation I

8.4%

12.7%

11.5%

10.8%

7.6%

5.7%

4.3%

1.9%

37.1%

67