Lawcovernotes October 2013

Practitioners’ reactions can vary when faced with a claim by a client or former client: - shock; horror; anger; disappointment. Whatever the reaction, it is important to deal with the claim and not to ignore it. The Lawcover Claims team is here to help. It is always the easiest way and most effective response to simply notify the teamby email, fax or letter and let us speak to the claimant and investigate the claim. Each year a number of claimants, either in person or through their lawyers, approach Lawcover directly in their efforts to pursue a claimagainst a practitioner. Nearly always this is on an unlitigated or pre-litigation basis. Unfortunately, inmany instances they have alreadywritten to the practitioner setting out their claimand have received no response. Lawcover, as the well known insurer of solicitors, is their next port of call in the attempt to be heard. However, Lawcover cannot deal with claimants directly unless there has first been a notification by the practitioner or the law practice against whom the claim is made. On receipt of a claim, it is the law practice/practitioner who makes the decision to notify Lawcover and seek indemnity under the insurance policy. In some circumstances, lawyers may choose to deal with a complaint or claim themselves. But, why would you want to handle the claim yourself? Even when the amount of the claim falls within your excess with only a small likelihood of exceeding it, in most circumstances, the worry, effort and expense involved, as well as the potential liability, is best shared with your insurer. In a recent case the insured solicitor acted for a client in relation to a loan secured by way of a caveat over a property. The insured allowed the caveat to lapse. The borrower went into liquidation and the client’s loanwas not repaid. The client made a claim against the solicitor who ignored it. The client commenced proceedings and eventually obtained default judgement against the solicitor. As a result of the solicitor’s silence, the client sought to make a claim directly against Lawcover. After a lengthy period of time the solicitor finally notified the matter to Lawcover. By this time the interest on the damages had substantially increased the quantum of the claim. The solicitor was also in breach of the terms and conditions of his policy for late notification and substantially prejudiced Lawcover’s ability to investigate liability and resolve the matter advantageously. In another recent case, the solicitor simply refused to notify Lawcover or provide any assistance in relation to a significant claim arising from a failure to register a mortgage or obtain deeds of priority from the prior mortgagees on title. The claimant’s only recourse was to obtain judgement against the solicitor personally, bankrupt him, and then obtain an assignment from the trustee tomake a claimon the solicitor’s insurance. The outcome would have been quite different and far less harsh if only the solicitor had cooperated with his insurer. Professional indemnity insurance exists to protect practitioners in the unfortunate event of a claim. Lawcover’s Claims team is dedicated to assist and support practitioners with professionalism and empathy, so that a claim is not ruinous to their financial position or reputation. In the event that you are faced with a claim, the first step is always speak to Lawcover. Peter Driessen General Counsel Don’t hesitate – notify Lawcover