Successor liability

During the 1990s this firm took over two other firms, both of which were owned by a sole practitioner.

Neither solicitor joined our practice and in the acquisition contracts it was an express term that we would not take over existing liabilities or claims.

Under the present rules we are not liable for their claims but, as we understand it, with effect from 1 September 2000 we become liable under paragraph 8.17 of the minimum terms as a successor practice.

This is because we have on our notepaper held ourselves out as incorporating the practices that we acquired.

We urge any practice which has taken over another practice to consider whether it is caught by the 'successor practices' rules, and make sure that it has reviewed its insurance arrangements, as the financial consequences could be quite catastrophic.

We know that in at least one case our quoted insurance premium has increased by 33% when the claims records of the acquired practices have been taken into account.

Nigel Steed and Ruth Jenkins, Nigel Steed & Co, Ipswich