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11 February 2022 / Veronica Cowan
Issue: 7966 / Categories: Features , Profession , Insurance / reinsurance
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Small law firms: running for cover?

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Are increasing professional indemnity insurance premiums posing a threat to small law firms? Veronica Cowan investigates
  • Reports show that professional indemnity insurance (PII) has increased by an average of 30% among small and medium firms, with the cost of PII identified as one of their biggest threats.
  • The increasing premiums may be fuelling a rise in legal practitioners leaving private practice and becoming consultants for larger firms.

News that law firms have struggled during the COVID pandemic is hardly surprising, given the importance of face-to-face contact for many clients in certain specialities. But physical interaction apart, it seems that a major reason is because they cannot afford the professional indemnity insurance (PII) premiums required by the Solicitors Regulation Authority (SRA). This mainly covers civil liability claims, and usually professional negligence, in private legal practice. Since insurance is compulsory, if a lawyer cannot buy it, they cannot be in business. Looking ahead to April 2022, law firms will be assessing their risk and seeking cover for it. 

Minority rule

‘The question

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NEWS
The Law Society RFC Festival of Sport returns next month, bringing together legal and financial services professionals for one of the sector’s largest annual sporting events
Legal aid deserts leave almost one in four without adequate access to justice
The Solicitors Regulation Authority (SRA) has warned solicitors and law firms that using artificial intelligence does not alter their professional obligations, amid concerns over inaccurate legal material and client confidentiality
From forgotten interest claims to case-management appeals, a string of procedural developments offers useful—and occasionally cautionary—lessons for practitioners

Jonathan Fisher KC highlights that it now accounts for around 40% of criminal offences, with roughly 70% involving technology, and argues that the UK cannot simply prosecute its way out of the problem. Detection, investigation and prosecution all require improvement, while different fraud types demand tailored responses.

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