Conveyancing tops indemnity claims

Residential conveyancing triggered more professional negligence claims against solicitors than other sectors last year, according to surveys released last week.

Figures from Zurich Professional - the second biggest underwriter for solicitors' indemnity - showed that 32% of all claims notified against its clients came from conveyancing.

Zurich said most of these claims resulted from: failure to investigate titles and charges; faulty searches and bad advice on these and on co-ownership possibilities; failure to ensure that contracts and plans properly described properties under sale; and failure to register charges and transfers in time.

Litigation-related claims arising out personal injury, employment, landlord and tenant, and commercial property work accounted together for 28% of claims, with 60% of those caused by missed time limits.

More than half of claims arising from probate (which accounted for 7% of total claims) were caused by disgruntled beneficiaries alleging that gifts had failed.

Matrimonial claims accounted for 6% of the total, mostly caused by a failure to disclose matrimonial assets.

Statistics released by broker Alexander Forbes - which compiles figures from the major insurers - also identified conveyancing as the main culprit.

These figures were: 23% conveyancing, 21% litigation, 11% commercial property, 8% trusts and probate, 6% for both company and family, and 2% financial services.

David Coughlan, head of Zurich Professional, said: 'Unless solicitors become better at the management of risk in their businesses, it is likely that premiums will increase further.'

Meanwhile, last week's Law Society Council meeting approved the 2002 minimum terms and conditions for qualifying indemnity insurers, which now include a terrorism exclusion.

Insurers are to be allowed to insist on whatever terrorism exclusion they want, so long as it does not exclude or limit any liability of the insurer for civil liability or related defence costs arising from any actual or alleged breach of duty in the performance of (or failure to perform) legal work or any other duty.

This means that solicitors will not be covered for the loss of any clients' documents arising from a terrorist incident, and should ensure they have other adequate property cover.

The council also pegged the profession's contribution to the Solicitors Indemnity Fund for 2002/03 at 25 million.

The fund has residual liabilities of 35 million, but there is still volatility in the figures.

Jeremy Fleming