NEGLIGENCE: personal injury up, litigation down

A sharp rise in commercial conveyancing negligence claims over the past year has seen them catch up with domestic conveyancing as the principal cause of indemnity notifications, figures indicated this week.

Alexander Forbes Claims Services said that 40% of its professional indemnity notifications in the year ending 1 September 2003 related to commercial or residential property work.

Although property claims overall were 2% down on last year, the proportion of commercial property claims has jumped from 11% of all claims last year to 20%.

It now stands level with domestic conveyancing - which correspondingly dropped from 29% in 2001-2002 to 20% of Alexander Forbes claims this year.

Fluctuations in the numbers of claims varied considerably according to the size of firm.

The most extreme change came in the smaller firms, where the proportion of claims for commercial property more than trebled - from 11% and 8% among sole practitioners and firms with one to four partners in 2001-2002, to 34% and 33% respectively in 2002-2003.

At the same time, the proportion of domestic conveyancing claims halved in these two sectors.

There was virtually no change among firms with 20-plus partners.

There were shifts in other fields.

In 2000-2001, litigation accounted for 21% of all notifications; last year this had fallen to 14%, and this year it slipped further to 8%.

Personal injury rose from 5%, through 8%, to 11% as a proportion of all claims over the same period.

Glenda West, a director at Alexander Forbes, said the trend in property claims 'could be partly an indicator of the economy in general and also the lessening of the housing boom'.

The reduction in litigation claims could be down to more use of pre-action protocols, she added.

Jeremy Fleming