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Professional liability predictions 2024

23 January 2024
Issue: 8056 / Categories: Legal News , Profession , Insurance / reinsurance
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‘Deep pocket’ professional indemnity claims could ‘re-emerge’ this year due to economic ‘headwinds’, according to DAC Beachcroft’s ‘Informed insurance’ predictions for 2024

‘Deep pocket’ professional indemnity claims could ‘re-emerge’ this year due to economic ‘headwinds’, according to DAC Beachcroft’s ‘Informed insurance’ predictions for 2024

The potential is ‘real’ due to ‘the highest quarterly insolvency numbers since Q2 2009’ when the last economic downturn was at its peak combined with an ‘apparent slowing in the real estate sector’ and consequent defaults, climate change risks, sustainability demands from clients, and concerns about cyber risks.

The firm’s insurance specialists also warn it is ‘likely that claims will be made against solicitors arising from new requirements under the Building Safety Act 2022’, regarding cladding and fire-related remediation work. Conveyancers who mistakenly identify a property as protected when it’s not could be caught out. DAC says: ‘The risk for solicitors is checking whether the information provided is accurate.

‘Solicitors acting for sellers may be put under pressure to sign undertakings, pursuant to which strict liability for errors would result—something to be avoided!’

Another cause of professional negligence claims is ‘the lack of clarity around the threshold for improper conduct’ regarding Strategic Litigation Against Public Participation (SLAPPs).

DAC recommends firms and in-house teams ‘upskill’ their climate-related advice or else face increasing claims in this area. It suggests not only extra training for solicitors in this area but also ensuring clients are clear about the ‘limits of the advice they will receive and when they may need to instruct a specialist’.

Also lurking in the undergrowth for solicitors this year is generative artificial intelligence (AI), which will ‘fundamentally alter the practice of law’ but also bring ‘the prospect of claims’. The risk of ‘hallucinations’ where AI invents content means lawyers must verify all content, and there are further risks such as breach of confidentiality, intellectual property infringement, breaches of cybersecurity and privacy laws and publication of defamatory content.

View more at: https://insurance.dacbeachcroft.com/predictions/professional-liability.

MOVERS & SHAKERS

Gilson Gray—Linda Pope

Gilson Gray—Linda Pope

Partner joins family law team inLondon

Jackson Lees Group—five promotions

Jackson Lees Group—five promotions

Private client division announces five new partners

Taylor Wessing—Max Millington

Taylor Wessing—Max Millington

Banking and finance team welcomes partner in London

NEWS
The landmark Supreme Court’s decision in Johnson v FirstRand Bank Ltd—along with Rukhadze v Recovery Partners—redefine fiduciary duties in commercial fraud. Writing in NLJ this week, Mary Young of Kingsley Napley analyses the implications of the rulings
Barristers Ben Keith of 5 St Andrew’s Hill and Rhys Davies of Temple Garden Chambers use the arrest of Simon Leviev—the so-called Tinder Swindler—to explore the realities of Interpol red notices, in this week's NLJ
Mazur v Charles Russell Speechlys [2025] has upended assumptions about who may conduct litigation, warn Kevin Latham and Fraser Barnstaple of Kings Chambers in this week's NLJ. But is it as catastrophic as first feared?
Lord Sales has been appointed to become the Deputy President of the Supreme Court after Lord Hodge retires at the end of the year
Limited liability partnerships (LLPs) are reportedly in the firing line in Chancellor Rachel Reeves upcoming Autumn budget
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