Professional Indemnity Insurance

With professional indemnity insurance renewal a little way behind us now it does seem correct to stop and take stock. At the time there were many reports in the press, legal magazines and Law Society Gazette confirming the feeling of many firms that it had been a difficult year for the renewal and a great deal of dissatisfaction with the renewal premiums. There is always an opposite position and there were a number of firms who felt that stable rates and sensible terms had been forced upon insurers and were going to be a benefit for the profession in general.

It is 10 years (almost) since the beginning of the end of the Solicitors Indemnity Fund and the market rate is still lower than the SIF in its final year! In a nutshell the revenue of the profession has grown, the limit of indemnity increased (as have claims and defence costs) but the premiums are still lower so, what is all the moaning and groaning about? Well, at the time renewal was occurring insurers were adjusting their rates and trying to protect themselves which had quite an effect on the small and medium sized firms, especially those with a property base.

So, is this year’s renewal going to be better or worse? Some press are saying that the sensible option for insurers is to not offer cover next year and wait for the good times to come again but the top end insurers who do actually take their business seriously say they are not going to let their customers down. They do however advise that the profession should be considering their options early.

In reality insurance is a necessity – the profession buy it and the insurance companies sell it and we need to work together to make it work.

Individual Fines for MLRO's

There is now a risk that a law firms MLRO (Money Laundering Reporting Officer) will be personally fined if they do not insist on having adequate procedures in place so that anything (or anyone) suspect will be reported to them by colleagues although currently this is only applies to firms who are regulated by the FSA as well as the Law Society.

The FSA (Financial Services Authority) have handed down its first fine under the new rules and although they do not expect to be making prosecutions as a matter of course they have been empowered to make professionals take this matter very seriously and face up to the responsibilities involved.

Last week Sindicatum Holdings were fined £49,000 and their Money Laundering Reporting Officer was fined £17,500 personally for not having adequate procedures for controlling money laundering risks even though no evidence of actual money laundering was found.

Although this has started with the financial institutions it is a big wake up call to all law firms. I am just off to check our procedures now.......

Health and Safety - Getting it Right

Health and Safety is an essential part of everyday working and does need to be taken seriously. Providing that you put the right policy in place and take the matter seriously then the process is often not as much hard work as employers initially believe.

The Health and Safety Executive (HSE) have published a ‘ten point plan’ for businesses to ensure they protect the health and safety of their employees as well as people visitng offices and businesses in general.

Their key recommendations are that:

1. All new businesses register with the appropriate authority ie the HSE or the local authority;
2. You take out adequate employers’ liability insurance and display the certificate where everyone can see it (this is actually a legal requirement);
3. Make sure you have someone capable to help you comply with health and safety regulations;
4. Decide on and prepare a health and safety policy which should help you manage health and safety issues;
5. Carry out an assessment of risk (potential dangers and appropriate precautions) and act on the findings;
6. Provide basic welfare facilities ie washing and toilet facilities, remember, different business may require different facilities;
7. Provide appropriate health and safety training for employees;
8. Consult your employees or worker force on health and safety matters, afterall, health and safety is everyones responsiblity;
9. Display the required health and safety law poster and give employees a leaflet covering the basic information;
10. Report as required any work-related accidents, diseases or dangerous incidents as soon as possible.

The HSE has many useful leaflets accessible online at http://www.hse.gov.uk/pubns/