Solos warned of indemnity hike

Professional indemnity insurance premiums could rise by as much as 40% this September, experts predicted at a meeting of sole practitioners last weekend.

Leading practice management adviser Jane Ridley told delegates at the Sole Practitioners Group (SPG) conference in Cheltenham that solicitors across all levels of practice faced a distinct hardening in the insurance market.

She reinforced general industry predictions that the 2002 renewal round could present practitioners with their highest premium rates since the profession went to the open market following the demise of the Solicitors Indemnity Fund (SIF) two years ago.

Ms Ridley - who specialises in providing consultancy on the Lexcel practice management quality mark - forecast that solicitors in England and Wales would face premium hikes averaging about 40%.

She pointed out that legal profession indemnity premiums in the Isle of Man had recently risen by 60%.

Her view was generally supported at the conference by insurance specialist solicitor Nick Williams, a partner at City firm Kennedys.

Mr Williams told delegates to prepare for 'an expensive year for buying indemnity insurance'.

But he tempered his prediction by saying that relative to the final years of the SIF, solicitors could still be marginally better positioned.

Mr Williams said it was unlikely that premiums would 'leap ahead of what they were before the change to the open market'.

Mr Williams also pointed out that one of the unexpected by-products of open-market insurance for solicitors was the area of coverage disputes.

He said that there is no method for resolving disputes between insurance companies where a law firm has changed insurers and a claim falls in a grey area between them.

Addressing delegates, Law Society President David McIntosh praised sole practitioners as being the 'linchpins of their communities'.

l Susan Carter of Ross Carter Solicitors in Brockenhurst, Hampshire, took over from Ian Lithman as SPG chairman at the group's annual general meeting.

Jonathan Ames