Minimum £500,000 terms to apply to all BSB-regulated entities
Barrister-owned entities will need to have at least £500,000 indemnity cover per claim, the Bar Standards Board (BSB) has confirmed.
The minimum terms apply to all BSB-regulated entities. Entities are businesses owned and managed by lawyers, which concentrate on activities such as advocacy, client representation in court and giving specialist advice. The BSB, which is due to start regulating entities next month, has received more than 75 expressions of interest and 16 completed applications so far. Providing confirmation about the necessary insurance arrangements is expected to encourage further interest.
The BSB has emphasised that barristers who have professional indemnity insurance in place, covering their practice as a self-employed barrister, can continue to practise in this capacity while they are waiting for entity insurance cover.
Frank Maher, partner, Legal Risk, says the terms are broadly similar to those applying to solicitors. “The cover is only £500,000 as against solicitors’ £2m (sole practitioners and partnerships)/£3m (incorporated practices). That is in line with the Bar Mutual cover which applies to barristers at present.
“This was the figure proposed by the Solicitors Regulation Authority (SRA) which the Legal Services Board rejected last year—not enough in my view, because it includes claimants’ costs, so if a case goes to trial it leaves only half that or less for the claimant.
“There are a few other quirks which are potentially detrimental to consumers and not in the SRA Minimum Terms and Conditions, though they are already in the current Bar Mutual terms.”
These include (at 6.7) that if the insured refuses to settle against the insurer’s recommendation then the insurer’s liability is capped at that amount, and (at 6.8) there may be no cover if the insured offers to settle without the insurer’s authority.”
Maher says the terms contained successor practice provisions “broadly similar” to those for solicitors, which could “cause problems”.
All prospective BSB-regulated entities are urged to contact their insurer as soon as possible so as to start the process of obtaining the appropriate cover.
