Lawcovernotes October 2014

Lvl 13, 383 Kent St, Sydney NSW 2000 Australia DX 13013 Sydney Market Street Telephone (02) 9264 8855 | Facsimile (02) 9264 8844 lawcover@lawcover.com.au | lawcover.com.au Lawcover Pty Ltd | ABN 48 003 326 618 Lawcover Insurance Pty Ltd | ABN 15 095 082 509 Welcome This edition continues the theme of reporting Lawcover’s activities in support of our insured law practices together with what I hope are interesting and useful cautionary tales about contemporary practice of law. OCTOBER 2014 EDITION 5 Policyholder Rebate By now, all eligible insured law practices will have received their Policyholder Rebate cheques which were issued in the week commencing 22 September. Information relating to the Policyholder Rebate was provided with each cheque and is reproduced in part for information in this issue of Lawcovernotes. It has been a genuine pleasure for all of us at Lawcover to be able to provide the policyholder rebate as doing so aligns exactly with the mutuality ethos that sits alongside our rigorous prudential management of the insurance business. Risk Management and Claims Prevention One of the key drivers in the lower than expected claims costs over recent years, which gave rise to the Policyholder Rebate this year, is the falling frequency and severity of claims against insured law practices. Lawcover commissioned actuarial analysis of the effectiveness of our core risk management activity for periods commencing 2005. This analysis was recently updated for 2014 and confirms previous findings that law practice participation in our Risk Management Education Program can reduce the frequency and severity of significant claims (in excess of $50K) by up to 15%. The combination of our proactive claims management and quick response to trends identified in actuarial analytics, together with the efforts of the profession at large to practice the law in a risk averse way, provides positive outcomes for both – and indeed for the consumers of the legal services you provide. Decision: Fischer v Howe This year Lawcover appealed a decision that, in the eyes of many lawyers and of Lawcover itself, extended the duty of care for lawyers to an unreasonable extent. The decision by the Court of Appeal to overturn the lower court finding was an important one and provides another example of Lawcover meeting a key obligation to the legal profession. (At the time of writing, we understand that the plaintiff has filed a special leave application to the High Court). Lawcover’s vision states that we will provide quick and fair compensation to consumers of legal services for legitimate claims; ie: where loss as a consequence of a negligent act or omission occurs. However, Lawcover will continue to mount rigorous defence of unmeritorious claims and continue to appeal findings which have the potential to create unreasonable precedents in the practice of law. A brief summary of the matter is on page 12. 2014 Annual Review In addition to providing details of Lawcover’s performance in 2013/14 via the Law Society of NSWAnnual Report, this year Lawcover has also produced its own Annual Review (see link below). 2014 is the 10 th anniversary of the establishment of Lawcover Insurance in 2004, a decade of considerable challenge and change for lawyers from a professional indemnity standpoint. I hope you will find time to read the Annual Review and I welcome any feedback. Michael Halliday Chief Executive Officer CLICK HERE TO VIEWA COPY OF THE 2014 ANNUAL REVIEW PDF VERSION