Retired solicitors' relief

Post-sif: as conveyancing claims still dominate one insurer considers leaving the market

Law firm principals who retired before the Solicitors Indemnity Fund (SIF) was scrapped are to be protected, the Law Society council decided last week.In separate developments, it emerged that one insurer is considering withdrawing from the solicitors' market, while an analysis of the first six months post-SIF shows that conveyancing claims are still most frequent.

Under the 1996 indemnity rules, the SIF did not seek recovery from retired principals for liability for which they would otherwise be insured by SIF.

Following its abolition last year, retired principals were no longer protected where claims were notified from 1 September 2000.

The Society has been alerted to instances of successor firms attempting to recover deductibles from retired principals as a result.

The council has now agreed to amend the rules so that discretionary payments can be made to principals in these circumstances.Meanwhile, insurer Denham Syndicate Management refused to deny this week speculation that it will retire from the legal indemnity insurance market.

A spokesman for the insurer said Denham is reviewing its strategy and deciding whether it is worth remaining in the market.

Figures from St Paul, on the first six months' post-SIF claims record, found that 40% of its total claims relate to conveyancing, but that they are not dominated by lender claims.

In the main claims have arisen from purchasers bringing actions for mistakes such as a missed right of way, or failure to spot a restrictiv covenant.Ian Bryant, a St Paul's claims manager, cautioned against complacency, saying a downturn in the property market could see the re-emergence of lender claims.Commercial claims had the highest value, and these were caused mainly by simple administrative errors, the St Paul analysis shows.On the bright side, the results show that so far there is little demand for litigation.

Significantly, of the handful of claims that have been recorded, 40% were brought by litigants in person.Jeremy Fleming