Lawyers study compulsory insurance idea

Press, 14 July 1980, Page 27

Lawyers study compulsory insurance idea

-?)PA Wellington *■*' A committee of the Law Society is investigating the practability of estab- . lishing a compulsory-in-<rdemnity insurance scheme ’land the possibility of /‘■•insuring its fidelity fund. Indemnity claims can \arise from, among other ’•/’things. conveyancing and w from the failure to commence court actions with- ? in the prescribed times. The society’s fidelity fund protects clients whose funds are em.zbezzled by law prac.■•’fjtioners.

i" Mr B. Brown. the society's public relations officer, said that the increasing complexity of legislation had made the society aware of the need for a compulsory-indem-nity insurance scheme. The society did not have a voluntary indemnity insurance scheme, but probably some law practitioners had taken out their own professionalindemnity insurance. The question of a compulsory or voluntary scheme depended ■ on the amount of the premiums. “Obviously the more

people there are, the lower the individual premium.’’ Mr Brown said. There was also the matter of an increasing drain on the solicitors’ fidelity fund within the society, and there was some concern about the possibility of getting this fund insured. .Mr Brown said the Law Society committee's concern about the need for insuring the fidelity fund arose from the size of some of ihe claims.

■‘We are almost waiting for the first claim in excess of $1 million,’’ he said. “Hopefully, it will never come, but the odds are against it. judging by the magnitude of the funds being handled. “The management committee of the fund is going to have another look at the possihiiitx of insuring the fund. They have looked at it in’ the past, but it has been too expensive.” One option viewed by the society was obtaining permission to use some of the unpaid interest on solicitors’ trust funds to contribute to the fidelity fund.