Both Geoffrey Sandercock and Peter Fowler, in his recent letter (see [2005] Gazette, 29 September, 4; 13 October, 16) are under the mistaken impression that the Law Society has done nothing to protect solicitors from claims, especially after the expiry of the six-year run-off cover provided by qualifying insurers under the minimum terms and conditions of professional indemnity insurance. This is not so.

The first period of six-year run-off cover will expire on 31 August 2007, relating to solicitors who retired without successor during the indemnity year 2000-2001. With effect from 1 September 2007, the Law Society, through the Solicitors Indemnity Fund (SIF), has placed with a leading European insurer a policy that will indemnify those solicitors against claims first made against them (or circumstances discovered by them) on or after that date until the policy expires on 30 September 2017. And, of course, it will apply to solicitors whose run-off policy expires in 2008, and so on.


The premium for this policy has been paid out of the SIF surplus to which Mr Fowler refers. These arrangements were agreed by the main board of the Law Society, and were reported to the council in 2005. Of course, in 2017 further arrangements will have to be made, but, 12 years in advance, one cannot say what they might be.


Diane Long in her recent letter (see [2005] Gazette, 13 October, 16) is correct to say that when the open market scheme was introduced there was no mention of the run-off premium being three times the final annual premium.


This is because the Law Society did not and does not have any influence on premiums, which are a matter of negotiation between solicitors and insurers, and are, of course, influenced by the insurers' perception of risk and other market forces.


Across the profession as a whole, the cost of compulsory insurance as a proportion of gross fees is about half what it was under the SIF. This year, the level of indemnity per claim has been doubled to £2 million, yet it is estimated by qualifying insurers that the total premiums paid by the profession will be no more than they were last year.


Some insurers indicated before the open market scheme started that they thought they would not charge any premium for post-retirement run-off cover. Experience has taught insurers that an ageing sole practitioner in poor health is not a good risk, and premiums are charged accordingly.


The Law Society's indemnity insurance committee is looking into the matter again, and would welcome factual evidence of difficulties with run-off insurance experienced by solicitors retiring without successor, bearing in mind that such solicitors may have other, perhaps greater, difficulties with their practice management.


Information should be sent to Andrew Darby, head of professional indemnity, at the Law Society at Redditch (andrew.darby@lawsociety.org.uk).


Peter Farthing, chairman of the Law Society's indemnity insurance committee, London