A two-partner firm is set to sue its broker after its professional indemnity insurance (PII) premium quadrupled, the Gazette has learned – while in a parallel development, the Law Society has created a PII crisis group and hinted it could launch its own action.

Joe Golstein (pictured), partner at London firm B&G Solicitors, alleged his PII broker’s failure to provide him with premium quotes quickly enough meant he missed the 1 October renewal deadline and was forced to pay for more expensive cover. He said his premium leapt from £20,000 to £80,000.

Meanwhile, Society chief executive Des Hudson told the Gazette that there appear to be ‘inconsistencies’ in the way indemnity cover has been applied across small firms, and that legal action ‘could be a possibility’.

He said a special PII crisis group, comprising members of the Society’s Regulatory Affairs Board (RAB) and President Paul Marsh, would look into the difficulties faced by solicitors following a chaotic renewals season.

‘The problems in terms of access to cover and the price of that cover seem to be largely concentrated in small firms,’ Hudson said. ‘We know some people have withdrawn cover from certain firms, but as far as we can see, that’s not being applied evenly.’

Golstein said he wrote to his broker last week, and that if they fail to respond, he will pursue legal action.

Golstein said his previous PII provider was Norwich Union, which pulled out of the market at the end of the summer. He said he asked his broker for quotes from other insurers immediately, but waited until late September to receive a £40,000 quote, which was conditional on him completing a conveyancing questionnaire. He said the questionnaire was returned on the same day, but the insurer declined cover less than 48 hours before the renewal deadline. He eventually found cover through another broker a week after the deadline had passed.

He declined to name the broker or the company that declined cover.

The Society’s group will look at the hardening of the run-off market, and the impact this has on sole practitioners looking to retire. Hudson has asked affected firms to contact the Society through normal channels.