Claim of racial bias by insurers in indemnity cover
The Law Society is investigating allegations that professional indemnity brokers and insurers have discriminated against firms with African and Asian-sounding names, the Gazette has learned.
The Society received a complaint to its professional indemnity insurance helpline from a solicitor in Birmingham, claiming that insurers were providing cover late or not at all to firms which sounded as if they were run by solicitors from ethnic minorities. The solicitor said she had spoken to other firms in the region who had experienced similar problems.
She also contacted the Black Solicitors Network, which had received similar complaints from four of its members. The BSN has pressed the Law Society and Solicitors Regulation Authority to investigate the issue, which both bodies have said they will do.
BSN chair Cordella Bart-Stewart said that while the evidence was anecdotal, the complaint made to the helpline was ‘not an isolated case’.
She added: ‘In the run-up to the 1 October renewal deadline, firms of solicitors with African or Asian surnames were being offered cover late, or not at all. Those with Asian names were being offered cover one week before the deadline. African firms were being offered cover even later than that.
‘What has been suggested is that brokers are aware [that some insurers are unwilling to cover African and Asian firms] and have not been putting proposals in. Some African firms’ proposals may not have gone in at all… It is firms with four partners or fewer that have been specifically targeted.’
Bart-Stewart said she had asked the Law Society to provide data on when firms were provided with quotes, if at all, and whether firms with ethnic minority names were paying higher premiums. She added that if evidence of discrimination is found the matter should be referred to the Equality and Human Rights Commission.
Law Society chief executive Des Hudson said the Society would be investigating the matter ‘as fully as we can’. He noted that there were ‘snippets of information’ which could point to racial bias, but more evidence was needed. The SRA also said it would investigate the matter.
A spokesman for the Association of British Insurers said insurers provide cover based on ‘business risk, not colour’.
Comments
Race bias?
If an insurer rates on risk alone, that is likely to discriminate against Asian or African firms. Such firms are more likely to be small (four partners or fewer) and all firms in that category find it hard to get indemnity cover. It has also been widely reported that Black and Asian solicitors feature disproportionately in SRA disciplinary proceedings, and there is some evidence of greater incidence of fraud in such firms. Whether or not that reflects bias on the part of the SRA, it all adds to the cost of insuring such firms. What clearly is not acceptable is discrimination based on the name of the firm alone, or the racial origin of its principals, but distinguishing discrimination from a genuine response to higher risk will always be difficult.
Fraud,actually.
The first comment was a masterpiece of understatement. Black and Asian solicitors are a timebomb in the profession. I cannot understand why this should be. You would have thought that Black and Asian solicitors would have had to excel in order to overcome the prejudice inherent in the British Law world and as a consequence would be possessed of exceptional ability. Sadly this does not seem to be true in my (entirely anecdotal) experience.
I hope time will prove me mistaken.
Sensible hats on, please people
I personally think it is unfair to make sweeping allegations against both brokers and insurers, in their defence. Also brokers will provide cover to anyone they can - at the end of the day it is the insurers taking on risks and paying claims - not brokers, so they call the shots. Somehow I find it hard to believe that all the insurers involved are discriminating on this basis - it needs to be established exactly who the guilty parties are here, rather than just pointing fingers at everyone. On the flip-side however, for many years regulators in the legal profession have rested on their laurels - to quote Mr George Osborne they didn't mend the roof when the sun was shining, and I think it is fair to say that professional standards have slipped. Be these allegations true or not, there is no smoke without fire, and this applies to those on both sides of the argument.
The Law Society Are Still Missing Half The Point
Whether or not there is direct discrimination (always difficult to prove), what happened during the last PII renewals process was clearly discriminatory as more firms with ethnic links were adversely affected more than other firms (Indirect Discrimination). I hope the LS and the SRA are advised appropriately so that their investigation addresses the relevant issues.
insurers racial bias
I have to say I am more than shocked by Jack Savage's comments. In my view,clients are in best position to judge the competence of black, asian and white solicitors, not a bigoted commentator like Mr Savage who would have made Goebbels proud. I dare say that while he claims he cannot understand why black and asian solicitors are a timebomb in the profession, he unwittingly answers his own question by admitting that there is racial prejudice inherent in the British law world. It does look like Mr Savage is possessed of commendable exceptional ability, to contract himself.
To Jack Savage
What does one do with timebombs? What do you propose TLS/SRA does? Are there still any active concentration camps in the world?
Whilst your views are yours, and in any free society, freedom of speech and expression should be encouraged, I have found your comments offensive.
If your evidence is indeed anecdotal, why would you, if you are a solicitor, and if so, if you are one that meets your own standards of having exceptional ability, in a post headed "Fraud,actually.", categorically state "Black and Asian solicitors are a timebomb in the profession."?
Race Bias on Indemnity Cover
It is clear that the issue of professional indemnity insurance is currently a bigger problem for ethnic minority firms. Many have found that the premiums demanded have increased by more than 300% and quite a lot have simply not been able to find cover at all. It is difficult to say whether or not the problem is attributable to racial bias either on the part of insurers or brokers. I personally doubt that brokers (who have an interest in ensuring that firms do obtain acceptable quotations) are part of the problem.
In my view, the more likely explanation is the SRA's focus on ethnic minority firms in its investigative and disciplinary proceedings. This is not to say that there has not been just cause in quite a lot of cases. The focus on ethnic minority firms suggests that the SRA believes that all of them are problematic. Allegations of dishonesty are very quickly and easily made against ethnic Solicitors, sometimes in spite of overwhelming evidence to the contrary. I believe Mr Jack Savage's attitude to ethnic firms prevails at the SRA.
It should not be surprising in those circumstances that insurers consider those firms to be too risky. A reasonable insurer will of course be nervous about providing cover to a firm that is statistically more likely to be investigated, subjected to disciplinary proceedings and allegations of dishonesty.
If what you say has even a
If what you say has even a smidgeon of truth to it, the problem is much bigger than currently thought. I therefore wonder if the full truth will ever emerge.
A quick look at the SDT
A quick look at the SDT findings page http://www.sra.org.uk/consumers/solicitor-check/prosecutions/tribunal-fi... suggests that there appears to be a higher proportion of ethnic minority solicitors in small firms disciplined than would be expected for their overall % in the profession.
Assuming that the findings are justified (and most in front of the SDT appear to plead guilty), then either
1.There is a higher proportion of "inappropriate" behaviour amongst ethnic minority solicitors who practise in small firms,
or
2. The SRA is not investigating and consequently disciplining non-ethnic minority solicitors in the same way (and if they did the proportion of ethnic solicitors up before the SDT would decrease accordingly).
Racial Bias by Insurers
I am a partner in a two-partner practice. My partner has a Pakistani surname and I understand that my surname is fairly common in Nigeria. Our practice name is made up of our two surnames and thus our firm has an African & Asian sounding name. We had no problems getting indemnity insurance, obtaining very competitive quotes from a number of brokers (one quote was even 20% less than last year's premium). Perhaps I was just very lucky and that my firm was the rare exception.
Good on you Mr Savage, Nick
Good on you Mr Savage, Nick Griffin would be proud.
To Mr Savage
Everyone else has been so polite, but I have to say that you are bigot, Mr Savage, and have a very narrow mind. You really are in the right company with Mr Griffin. Sad to say, there exist many misinformed and ignorant lawyers like you- a real shame.