Conveyancing triggers most claims - but fears of huge increase prove unfounded

INDEMNITY: until repeated errors are resolved, solicitors' premiums will continue to rise

Conveyancing triggered more professional negligence claims against solicitors than other sectors as usual last year, according to surveys released last week, but fears of a big leap in such claims have proved unfounded.

Figures from Zurich Professional - the biggest underwriter for solicitors' indemnity - showed 31% of all claims notified against its clients came from conveyancing.

Last year's figure was 32%.

Fears that conveyancing claims might rise sharply followed news in April from the St Paul - the Law Society's joint venture partner - that the number of lender-based claims incurred by its clients had increased from 10% to 17% of its total conveyancing claims (see [2003] Gazette, 25 April, 1).

Litigation-related claims arising from personal injury, employment, landlord and tenant, and commercial property work accounted together for 27% of Zurich's claims.

Statistics released by broker Alexander Forbes - which compiles figures from the major insurers - also identified conveyancing as the main culprit, but with only a small increase to 24% of the total claims, from 23% last year.

After conveyancing, Alexander Forbes found the main causes of claims to be: trusts and probate (12%), litigation (11%), commercial property (10%), personal injury (9%), matrimonial (6%), company, employment, and landlord and tenant (4% each), and financial services (3%).

David Coughlan, head of Zurich Professional, said: 'These figures are similar to last year's.

Mostly the same small errors are being made, such as a failure to register a charge.

Until we resolve these simple errors, premiums will continue to rise.'

Peter Farthing, chairman of the Law Society's professional indemnity committee, said: 'These figures show stability in the incidence of claims, and - although conveyancing still accounts for the most claims by sector - that reflects the fact that it accounts for the largest proportion of work done by solicitors.'

A spokesman for the St Paul said: 'While the spread of claims from St Paul clients has remained pretty much the same since last year, the actual value of claims in certain areas, such as company/commercial, has increased quite dramatically.

I think this has to be taken into account when viewing the overall picture.'

Jeremy Fleming