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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.

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NEWS
Writing in NLJ this week, Kelvin Rutledge KC of Cornerstone Barristers and Genevieve Screeche-Powell of Field Court Chambers examine the Court of Appeal’s rejection of a discrimination challenge to Tower Hamlets’ housing database
Michael Zander KC, Emeritus Professor at LSE, tracks the turbulent passage of the Terminally Ill Adults (End of Life) Bill through the House of Lords in this week's issue of NLJ. Two marathon debates drew contributions from nearly 200 peers, split between support, opposition and conditional approval
Alistair Mills of Landmark Chambers reflects on the Human Rights Act 1998 a quarter-century after it came into force, in this week's issue of NLJ
In his latest Civil Way column for NLJ, Stephen Gold surveys a raft of procedural changes and quirky disputes shaping civil practice. His message is clear: civil practitioners must brace for continual tweaks, unexpected contentions and rising costs in everyday litigation
Barbara Mills KC, chair of the Bar 2025 and joint head of chambers at 4PB, sets out in this week's NLJ how the profession will respond to Baroness Harriet Harman KC’s review into bullying, harassment and sexual misconduct at the Bar
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