Solicitors Liability

[james_law]

While a solicitor would be covered under a company's insurance if he was to do something negligent. What happens when he acts say out of work and gives advice on which someone relies and it is negligent. Does his employers insurance cover this?

Also what would the case be of an unemployed solicitor or a legal professional acting for themself giving advice, would he need his own PI insurance?

Thanks in advance.

[des8]

This is an extremely complex matter and cannot be answered simply.
For a start all practising solicitors must be covered by a Professional indemnity insurance that complies with the minimum requirements of the SRA.
Different insurers issue policies which will, whilst adhering to the minimum requirements, exceed them in differing respects.

Some solicitors are employed by companies, some are in partnerships and others are practising as individuals.

If any act without PI cover they breach SRA rules

If you are considering an action against an individual for offering negligent advice which caused you loss, it is really of no concern to you about the existence or not of insurance (unless you are concerned the individual does not have the means of compensating you and you will looking to his insurers)

[james_law]

Hi Des,

Thank you for your reply. Fortunately this does not concern action against an individual for negligent advice. To be more specific its about legal professionals, i.e barristers/solicitors, that are practising as individuals. But from what you've said everyone giving advice in any capacity needs to be covered by PI insurance.

[des8]

Hi Des,

. But from what you've said everyone giving advice in any capacity needs to be covered by PI insurance.

Unless you advise under disclaimers such as paras 9 & 10 of the Terms of Use of this site, and the disclaimer at the base of your postings.

[R0b]

If by legal professionals your talking barrister/solicitor and not a paralegal or some other equivalent, then for solicitors, not all that practise are required to have PII.

In-house lawyers for example don't need PII because they will usually be covered by their employer's insurance, although it is possible the company could request the lawyer have PII, never heard of it happening though. There's special rules on in-house lawyers which is probably beyond the remit of your question so I'll leave it at that.

PII is also not necessary where an exemption exists. For example, the PII rules allows a practising solicitor to act for friends or family members without the need for PII provided that they do not charge or receive remuneration.

Have you checked the Law Society website as I'm sure they have a piece of the requirements of PII.

Also take note of the below concerning new rules around PII that's likely to come into force soon.

https://www.lawgazette.co.uk/news/ls...070499.article

[des8]

Hi R0b Where did this info come from?
"PII is also not necessary where an exemption exists. For example, the PII rules allows a practising solicitor to act for friends or family members without the need for PII provided that they do not charge or receive remuneration"
.


SRA RULES ; 1.3 These Rules require solicitors, RELs, RFLs, recognised bodiesand their managers and licensed bodies (in respect of their regulated activities) in private practice in England and Wales to take out and maintain professional indemnity insurance with participating insurers with effect from 1 October 2013. https://www.sra.org.uk/solicitors/ha...s/content.page


As a non-practising solicitor you may do legal work for friends and relatives without a practising certificate, but not in your capacity as a solicitor. You should therefore explain (preferably in writing) at the outset that you are not doing the work as a solicitor and that you are not covered by professional indemnity insurance.
http://www.sra.org.uk/solicitors/cod...etirement.page

[R0b]

https://www.sra.org.uk/faqs/guidance...ing-no-pc.page

The above link is the straightforward answer for the layman.

The actual rule itself is contained in the Practice Framework Rules (10.2):

If you are a solicitor or REL you will not be regarded as practising as a sole practitioner and you are exempt from the obligation for your practice to be a recognised sole practice if:
...
(c) your practice consists entirely of:
(i) providing professional services without remuneration for friends, relatives, companies wholly owned by you or your family, or registered charities; and/or

https://www.sra.org.uk/solicitors/ha...0/content.page

I also queried this at the time with the SRA who confirmed my understanding.

You have to go round the mill of the Rules to fully understand but that's the exemption, however if you are acting under this exemption you should really inform the "client" that you have no PII.

[R0b]

I should also add that doesn't give you carte blanche to try and run a firm either as the end result is you being struck off, as happened to one guy earlier this year.

https://www.legalfutures.co.uk/lates...irm-struck-off

[james_law]

Many thanks for your input, this has confirmed what I thought would be the case. R0b des8

[des8]

Thanks for the clarification R0b

So a solicitor acting solely for friends and family is regarded as non practising and does not need PII, so what I stated originally ( all practising solicitors must be covered by a Professional indemnity insurance) is correct

[R0b]

Semantics but I'm not sure your interpretation is the right one (happy to be corrected) because if I recall, non-practising solicitors aren't entitled to undertake reserved legal activities.

As far as I understand, solicitors who carry out work for friends under this exemption are classified as practising solicitors who would ordinarily be considered a sole practitioner but for those specific purposes, are not regarded as one and so no PII is needed. If you are regarded as non-practising, you wouldn't be able to carry out reserved legal activities.

[des8]

It won't be the first or last time I've been wrong! but it does show how confusing the subject can be.

Anyway this is going nowhere and rather hijacking this thread
apologies to james_law

[james_law]

Please don't apologise. I'm happy to read this discussion.

[R0b]

It won't be the first or last time I've been wrong! but it does show how confusing the subject can be.

Anyway this is going nowhere and rather hijacking this thread
apologies to james_law

Very confusing.. one of the reasons I did not wish to be a regulatory lawyer!