Law Society 'exploring options' over indemnity
The Law Society has denied rumours that it was working on its own professional indemnity scheme but conceded it was "exploring options" with the insurance market.
In a letter sent out to solicitors in 1-4 partner firms, chief executive Des Hudson said the representative body was "actively considering practical ways in which we can assist our members in this market segment with a view to increasing the available options for purchasing rated cover and to do so on terms that represent value for money".
The letter is the latest in an effort by Chancery Lane to move solicitors away from unrated insurers in the wake of the Balva debacle.
Last week the SRA responded to calls that it should ban unrated insurers, as figures showing that Balva was the third biggest indemnity insurer last year added fresh concerns to the controversy.
Hudson renewed advice that while credit ratings were not a foolproof answer to an insurer's financial strength, "they are an important available factor that should be taken into consideration".
The society was also "increasingly concerned" at the level of commission paid to brokers operating in the small-firm segment.
"We are not satisfied that the scale of the commission payments represents value for money for solicitors purchasing PII cover through such arrangements," the letter said.
Options the society could consider include endorsing brokers prepared to offer flexibility on commission, possibly linked to membership of one of the society's quality schemes or panel membership.
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