Sole practitioners and their families are 'facing ruin and penury' because of high insurance premiums on retirement, a former Law Society treasurer warned this week.

Geoffrey Sandercock said the situation was 'a disgraceful state of affairs for people who have given their lives to the profession.'


Solicitors are required to take out 'run-off' cover for six years after they cease to practice. The cost of this cover for the run-off period is often three times the last annual premium.


Mr Sandercock said: 'Before the move to the open market, the six years' run-off cover was provided for free through the Solicitors Indemnity Fund (SIF). But after 2000, solicitors have had to pay this extra charge simply as a price for retiring.


'I have been told about one 75-year-old solicitor in Bristol who could not afford to retire because of this - no one would take over his practice. I have also been informed about the estate of another solicitor who was ruined by indemnity problems.'


He added: 'Insurers do not routinely offer cover after the six years, which means solicitors often have no insurance after that period. Solicitors should be free of that worry, especially if they are elderly. It is important to be able to close the book.'


Peter Farthing, chairman of the Society's indemnity insurance committee, said: 'The premium that is charged is a matter of negotiation between solicitors and insurers. Two-and-a-half times or three times the normal premium is a common multiplier. That means 4-5% of gross fees is being asked for. There is no means of knowing whether that is affordable.'


He added: 'SIF did not charge a run-off cover contribution, and so the cost of retirement fell on all members of the profession, rather than the solicitor who benefited from retirement.'