S.I. No. 445/2014 - The Solicitors Acts 1954 to 2011 (Professional Indemnity Insurance) Regulations 2014

The Insurance must provide that any dispute between the Insured and the Insurer as to coverage of any Claim or Circumstance under the Insurance shall be heard and determined in conjunction with any other related dispute between any insured party and that party’s insurer.

8.3 Conduct of Claims

The Insurance must provide that, pending resolution of any coverage dispute and without prejudice to any issue in dispute, the Insurer shall if so directed by the Law Society conduct any Claim against the Insured, advance Defence Costs to the Insured and if appropriate compromise and/or pay any Claim against the Insured, such a direction by the Society to be known as a Direction. The Society may make such a Direction if it is satisfied, in its absolute discretion, that:—

8.3.1 the party requesting the Direction has taken all reasonable steps to resolve the dispute with the other party;

8.3.2 there is a reasonable prospect that the coverage dispute will be resolved or determined in the Insured’s favour; and

8.3.3 it is fair and equitable in all the circumstances for such Direction to be given.

The Insurance may provide that the Insured shall be required to afford reasonable co-operation to the Insurer in relation to the handling of any Claim against the Insured, subject to the Insurer agreeing to meet the Insured’s reasonable costs of such co-operation, and the Insurance may further provide that the Insurer shall be entitled to recover from the Insured by way of damages a sum equal to the Insurer’s loss arising from or connected with the Insured’s failure to co-operate as required by the Insurance. For the avoidance of doubt, the Insurance may not permit the Insurer to refuse to pay any claim, or to cancel, terminate or avoid the Insurance, due to the Insured’s failure to co-operate as required by the Insurance.

Appendix 2

Risk Management Audit Terms of Reference

• (a) Each risk management audit report should estimate the number of files held by the firm and break these down statistically, giving the percentage of total files and the percentage of gross fees of the firm falling under such different categories of business as may be appropriate.

• (b) Each risk management audit report should give an account of the methods of file maintenance and post and communications delivery used by the firm and should confirm:—

• (i) that all filing is up to date and is contained in fire-proof storage facilities; and

• (ii) that provision has been made for back-up storage of all electronic files and communication records held by the firm.

• (c) Each risk management audit report should give details of any diary system used by the firm and set out details of how the diaries of any solicitor, registered lawyer, principal or other person employed by or engaged in the practice of the firm (including any consultants) is managed and monitored during any absences.

• (d) Each risk management audit report should set out a list of the principals of the firm and of every staff member employed by or engaged in the practice of the firm (including any consultants) and should list and summarise:—

• (i) their roles and years of service;

• (ii) their qualifications;

• (iii) any other relevant information.

• (e) Each risk management audit report should include an account of interviews held with each principal of the firm and any other staff member employed by or engaged in the practice of the firm believed by the risk management auditor to be relevant to obtain a proper view of the levels of risk management pertaining within the firm.

• (f) Each risk management audit report should include a list of the files closed within the firm during the 12 months preceding the date of the risk management auditor’s visit to the firm and these files should be examined by the risk management auditor to obtain a summary view of them from a risk management perspective.

• (g) Each risk management audit report should include an account of an examination by the risk management auditor of the firm’s accounting system, indicating that access to ledgers, account cards or any relevant electronic record storage system was obtained, and further indicating any areas of concern that arise from a risk management perspective.

• (h) Each risk management audit report should indicate whether a centralised record of undertakings given by the firm is maintained, and should include an examination of such record, indicating any areas of concern that arise from a risk management perspective.

• (i) Each risk management audit report should give an account of any files identified by the risk management auditor as being of concern from a risk management perspective, and should report as to the extent of liability involved in each case.