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S.I. No. 351/2018 - Solicitors Professional Indemnity Insurance Regulations 2018

Type Statutory Instrument
Publication 2018-09-14
Last updated 2020-10-13
State Repealed superseded text
Text As published
Source Irish Statute Book
articles 24

This is the act as published. Later amendments are not folded into the text below: each one is a separate act in this repository and an entry in this law's history.

2 amending acts · 2020-10-13, S.I. No. 429/2020 - Solicitors Professional Indemnity Insurance Regulations 2020

Reform history JSON API

14. Membership of the Assigned Risks Pool:

15. Variation of the Minimum Terms and Conditions in respect of cover granted by the Assigned Risks Pool:

16. Defaulting Firms:

shall be calculated by the SPF manager in accordance with the ARP premium schedule determined by the PII Committee from time to time.

17. Insolvency of Participating Insurers and Other Events:

18. Risk Management Audits:

19. Risk Management Audit Reports:

20. Responsibilities of Principals:

21. Professional Indemnity Insurance Committee:

(iii)(to the extent that the 1995 Regulations remain in force by virtue of these Regulations) the committee constituted under the 1995 Regulations and designated as the PII committee thereunder by or under the 1995 Regulations; and

(iv)(to the extent that the 2007 Regulations remain in force by virtue of these Regulations) the committee constituted under the 2007 Regulations and designated as the PII committee thereunder by or under the 2007 Regulations, save in each case for the making of regulations; and

(v)(to the extent that the 2011 Regulations remain in force by virtue of these Regulations) the committee constituted under the 2011 Regulations and designated as the PII committee thereunder by or under the 2011 Regulations; and

(vi)(to the extent that the 2014 Regulations remain in force by virtue of these Regulations) the committee constituted under the 2014 Regulations and designated as the PII committee thereunder by or under the 2014 Regulations; and

(vii)(to the extent that the 2016 Regulations remain in force by virtue of these Regulations) the committee constituted under the 2016 Regulations and designated as the PII committee thereunder by or under the 2016 Regulations; and

(viii)(to the extent that the 2017 Regulations remain in force by virtue of these Regulations) the committee constituted under the 2017 Regulations and designated as the PII committee thereunder by or under the 2017 Regulations.

(ii)(without prejudice to the generality or specificity of any Regulation) directing steps necessary or expedient to be taken to ascertain whether these Regulations or any relevant provisions of the earlier regulations which remain in force are being complied with; and

22. SPF Management Committee:

23. Provision of Information and co-operation with Qualifying Insurers and SPF Manager:

24. Amendment to Independent Law Centres Regulations:

“For the avoidance of doubt, an employed solicitor shall be required to comply with the Solicitors Professional Indemnity Insurance Regulations 2018.”

Signed on behalf of the Law Society of Ireland pursuant to Section 79 of the Solicitors Act 1954 .

Dated this 7 day of September 2018.

MICHAEL QUINLAN,

President of the Law Society of Ireland.

SCHEDULE

Table of Revocations
NAME OF INSTRUMENT EXTENT OF REVOCATION
The Solicitors Acts 1954 to 2015 (Professional Indemnity Insurance) (Amendment) Regulations 2017 (Statutory Instrument No. 389 of 2017) Revoked in its entirety save that:—(i) the instrument (as subsequently amended) shall remain binding upon solicitors and registered lawyers required, prior to the operative date, by virtue of the provisions of the instrument to maintain run-off cover (as defined by the instrument) such that those solicitors and registered lawyers shall be required to continue to maintain such coverage in accordance with the terms of the instrument and that the provisions of the instrument (including provisions relating to the enforcement thereof and the penalties thereunder) shall be fully continued in effect as regards such solicitors and registered lawyers and such run-off cover; and (ii) the instrument (as subsequently amended) shall remain in effect to the extent necessary to permit the proper functioning and operation of the special purpose fund constituted by virtue of the provisions of the instrument to permit the special purpose fund to be administered to fulfil the terms of all coverages granted thereunder (iii) the instrument (as subsequently amended) shall remain in effect to permit the proper functioning and operation of the SMDF (as defined therein) to permit the SMDF to be administered to fulfil the terms of all coverages granted by it.

Appendix 1

Minimum Terms and Conditions of Professional Indemnity Insurance for Solicitors and Registered Lawyers in Ireland

2 INTERPRETATION

2.1 In these terms and conditions, the following expressions shall have the following meanings:—

“Amount Insured” means the limit of liability of each Insurer under the Insurance, including, for the avoidance of doubt, the aggregate limit of liability of all Insurers where the coverage is provided on the basis of co-insurance;

“Authorised Insurer” means an insurer that holds an authorisation to carry on insurance business for the purposes of Directive 73/239/EEC or that is otherwise entitled to carry on non-life insurance business in the State;

“Circumstance” means an incident, fact, occurrence, matter, act or omission that may give rise to a Claim in the context of civil liability;

“Claim” means a request or demand for, or an assertion of a right to, or an intimation of an intention to seek:—

For the purposes of this sub-paragraph (b), the discharge of an obligation of an Insured, following receipt by an Insured of a Notification of a Requirement to Rectify, shall be treated as a “Claim” (subject to the provisions of the Regulations and/or Minimum Terms and Conditions) notwithstanding that a formal award pursuant to the provisions of the Solicitors Acts 1954 to 2015, or any regulations made thereunder, has not been made;

“Claimant” means a person or entity that has made or may make a Claim (including a Claim for contribution or indemnity);

“Client Account” shall have the same meaning as prescribed in the Solicitors Accounts Regulations or the meaning prescribed in any statute or statutory instrument amending or replacing the Solicitors Accounts Regulations;

“Commercial Property Regulations” means the Solicitors (Professional Practice, Conduct and Discipline — Commercial Property Transactions) Regulations 2010;

“Coverage Period” means the period for which the Qualifying Insurance or the ARP coverage (as the case may be) held by a Firm affords cover;

“Defence Costs” mean legal costs and disbursements and investigative and related expenses reasonably and necessarily incurred with the consent of the Insurer in relation to a Claim including without limitation the costs of:—

but the term “Defence Costs” does not include:—

“Direction” shall have the meaning ascribed to it in clause 8.1;

“Employee” means any person, other than a Principal, employed or otherwise engaged in the Firm’s Practice, including, without limitation, solicitors, registered lawyers, other lawyers, trainee solicitors, consultants, associates, locum staff members, persons seconded to work in the Firm’s Practice or persons seconded by the Firm to work elsewhere, office and clerical staff or otherwise;

“Financial Institution” means any of the following:—

but, for the avoidance of doubt, does not include a Minister of the Government in the exercise of the functions, powers or duties of his office;

“Firm” means:—

where the relevant partnership or relevant sole practitioner, as the case may be, carries on a practice;

“Firm’s Practice” means the practice carried on by the Firm, and includes the business of any trustee, nominee, service or administration company owned by the Principals of the Firm;

“Historic Circumstances” has the meaning ascribed to it in Clause 2.3.6;

“Historic Claim” has the meaning ascribed to it in Clause 2.3.1;

“Insurance” means the professional indemnity insurance or coverage required by each Firm pursuant to the Regulations;

“Insured” means, in respect of a Firm:—

“Insurer” means the underwriter of the Insurance or the provider of the coverage the subject of the Minimum Terms and Conditions;

“Investment Advice” has the meaning ascribed to such term in the Regulations;

“Investment Business Service” has the meaning ascribed to such term in the Regulations;

“Law Society” means the Law Society of Ireland;

“Lead Insurer” means the Insurer named as such in the contract of Insurance but if contrary to clause 3.6.2 no Lead Insurer is named as such, means the first-named Insurer on the relevant certificate of insurance;

“Legal Partnership” has the meaning ascribed to it in the Legal Services Regulation Act 2015 ;

“Legal Services” means services of a legal or financial nature and includes any part of such services, and for the avoidance of doubt, includes (without limitation):-

“Minimum Terms and Conditions” means the minimum terms and conditions set out in Appendix 1 to the Regulations with which a Qualifying Insurance (or, in the case of a Qualifying Insurance provided as a coinsurance, any part thereof) underwritten by a Participating Insurer is required by these Regulations to comply, or in the case of ARP coverage and run-off cover, such minimum terms and conditions, as varied by or pursuant to these Regulations, to apply in respect of such cover;

“Misconduct” has the meaning ascribed to such term in the Regulations;

“Multi-Disciplinary Practice” has the meaning ascribed to it in the Legal Services Regulation Act 2015 ;

“NAMA” means the National Asset Management Agency;

“Notification of a Requirement to Rectify” means a notice in writing (including email) from the Registrar of Solicitors or from such other person as may be appointed by the Law Society for that purpose:-

“Participating Insurer” means, in respect of an Indemnity Period,

“Participating Insurers Agreement” means an agreement in such terms as the PII Committee may from time to time designate setting out the terms and conditions on which a Participating Insurer may provide Qualifying Insurance to Firms in the State and the terms on which such Participating Insurer shall participate in the Special Purpose Fund;

“Partner” means a partner in a Firm;

“Partnership” means an unincorporated firm;

“Personal Insolvency Practitioner” has the meaning ascribed to such term in the Personal Insolvency Act 2012 ;

“Policy” means a contract of professional indemnity insurance made between a Participating Insurer (whether alone or in conjunction with other participating insurers) and a Firm, and “Policies” shall be construed accordingly;

“Practice” means a business (which term includes any gainful occupation) or any part thereof consisting of the provision of Legal Services from an establishment in the State and where such Legal Services (as they involve the provision of legal advice) relate to the law of the State (including European Union law as it forms part of the law of the State);

“Practice Manager” has the meaning ascribed to it in the Regulations;

“Preceding Practice” means each Practice:

“Principal” means:—

“Qualifying Insurance” means a Policy or Policies of insurance which (in the case of a single such Policy) includes the relevant Minimum Terms and Conditions or (in the case of a number of Policies) taken together include the Minimum Terms and Conditions in effect at the date of inception, extension, renewal or replacement of the Policy or Policies of insurance;

“Registered Lawyer” means a lawyer that has been granted a registration certificate by the Law Society and has been entered onto the register maintained by the Law Society within the meaning of and in accordance with the European Communities (Lawyers’ Establishment) Regulations 2003 (Statutory Instrument No. 732 of 2003) and a reference to a registered lawyer in these Regulations, where consistent with the context thereof, includes a former registered lawyer or a deceased registered lawyer;

“Registrar of Solicitors” means the holder of the office of Registrar of Solicitors appointed by the Law Society pursuant to section 8 of the Solicitors Act 1954 ;

“Regulations” means the Solicitors Professional Indemnity Insurance Regulations 2018, as the same may be amended from time to time;

“Relevant Period” has the meaning ascribed to it in Clause 2.3.1(a);

“Relevant Policy” has the meaning ascribed to it in Clause 2.3.1(a);

“Self-Insured Excess” means an amount that the Insured is required by the terms of any contract between the Insured and the Insurer to pay to the Claimant in the event of a Claim;

“Solicitors Accounts Regulations” means the Solicitors Accounts Regulations 2014 ( S.I. No. 516 of 2014 ) or any statute or statutory instrument amending or replacing the Solicitors Accounts Regulations 2014 ( S.I. No. 516 of 2014 );

“Special Purpose Fund” has the meaning ascribed to it in the Regulations;

“Succeeding Practice” means a Practice that satisfies any one (1) or more of the following conditions in relation to another Practice (such other practice being a Preceding Practice for these purposes):—

but, notwithstanding the foregoing, a practice shall not be treated as a Succeeding Practice for the purposes of the Minimum Terms and Conditions pursuant to paragraphs (b), (c), (d), (e) or (f) of this definition if another practice is or was held out by the owner of that other practice as the Succeeding Practice;

“the 1995 Act” means the Consumer Credit Act 1995 (as amended);

“the 1997 Act” means the Central Bank Act 1997 (as amended);

“Working Day” means every day, not including a Saturday, Sunday or public holiday, on which banks generally are open for the transaction of normal banking business in the State.

2.

2In these Minimum Terms and Conditions, unless the context otherwise requires:—

3 SCOPE OF COVER

3.1 The Insured

The person insured under each Insurance must include, and coverage under the Insurance as joint insureds must extend to, all those persons and entities set out in clause 1 under the definition of “Insured”.

3.2 Civil Liability

The Insurance must indemnify each Insured against civil liability incurred by an Insured arising from any provision of Legal Services provided that:—

3.3 Continuous Coverage

Historic claims

3.3.1 Notwithstanding the provisions of clause 2.2 and subject to the provisions of clause 2.3.2, the Insurance must indemnify the Insured against civil liability incurred by the Insured arising from any provision of Legal Services where:

such a Claim to be referred to herein as an “Historic Claim”.

3.3.2 Where the Insurance is underwritten on a co-insurance basis, the Insurance may provide that an Insurer shall only be liable in respect of an Historic Claim where the Insurer provided cover to the Insured continuously and without interruption from the Relevant Period until the date of notification of the Historic Claim.

Limit of liability

3.3.3 The liability of an Insurer in respect of any one Historic Claim referred to in clause 2.3.1 shall not exceed the lesser of the limit of liability of the Insured under the Insurance and the limit of liability of the Insured under the Relevant Policy.

3.3.4 In the case of co-insurance, the liability of an Insurer in respect of any one Historic Claim referred to in clause 2.3.2 shall not exceed the lesser of the Insurer’s proportion of the limit of liability of the Insured under the Insurance and the Insurer’s proportion of the limit of liability of the Insured under the Relevant Policy.

Self-insured excess

3.3.5 Notwithstanding the provisions of clause 4, the self-insured excess payable by the Insured in respect of a Historic Claim referred to in clause 2.3.1 shall be the higher of the self-insured excess applicable to the Insurance and the self-insured excess applicable to the Relevant Policy.

Historic circumstances

3.3.6 Notwithstanding the provisions of clause 2.2 and subject to the provisions of clause 2.3.7, the Insurance must indemnify the Insured against civil liability incurred by the Insured arising from any provision of Legal Services where a Claim in respect of such liability is first made against the Insured during or after the Coverage Period and:

such Circumstances to be referred to herein as “Historic Circumstances”.

3.3.7 Where the Insurance is underwritten on a co-insurance basis, the Insurance may provide that an Insurer shall only be liable in respect of a Claim arising from Historic Circumstances where the Insurer provided cover to the Insured continuously and without interruption from the Relevant Period until the date of notification of that Claim.

Limit of liability

3.3.8 The liability of an Insurer in respect of any one Claim referred to in clause 2.3.6 arising from Historic Circumstances shall not exceed the lesser of the limit of liability of the Insured under the Insurance and the limit of liability of the Insured under the Relevant Policy.

3.3.9 In the case of co-insurance, the liability of an Insurer in respect of any one Claim referred to in clause 2.3.7 arising from Historic Circumstances shall not exceed the lesser of the Insurer’s proportion of the limit of liability of the Insured under the Insurance and the Insurer’s proportion of the limit of liability of the Insured under the Relevant Policy.

Self-insured excess

3.3.10 Notwithstanding the provisions of clause 4, the self-insured excess payable by the Insured in respect of a Claim referred to in clause 2.3.6 arising from Historic Circumstances shall be the higher of the self-insured excess applicable to the Insurance and the self-insured excess applicable to the Relevant Policy.

3.4 Defence Costs

The Insurance must indemnify the Insured against Defence Costs in relation to:—

and the Insurance shall provide that such Defence Costs will be met by the Insurer as and when they are determined, due and payable.

3.5 Preceding Practice

3.5.1 The Insurance must indemnify each Insured against civil liability to the extent that such liability arises from any provision of Legal Services in connection with a Preceding Practice, provided that:—

3.5.2 For the purposes of such cover as is contemplated in clause 2.5, the Insurance must include:—

3.

5.3The Insurance may permit the Insurer to charge an additional premium in respect of coverage for a Preceding Practice provided pursuant to this clause 2.5, but the Insurance may not provide that the Insurer can decline to indemnify the Insured or cancel, terminate or avoid the Insurance due to non-payment of any such additional premium when due.

3.6 Succeeding Practice

3.6.1 Where there is a Succeeding Practice to the Firm’s Practice, the Insurance must indemnify each Insured against civil liability arising from any provision of Legal Services in connection with a Succeeding Practice to the Firm’s Practice, provided that:—

3.6.2 For the purposes of such cover as is contemplated in this clause 2.6, the Insurance must include:—

3.6.3 The Insurance may permit the Insurer to charge an additional premium in respect of coverage for a Succeeding Practice provided pursuant to this clause 2.6, but the Insurance may not provide that the Insurer can decline to indemnify the Insured or cancel, terminate or avoid the Insurance due to non-payment of any such additional premium when due.

4 MINIMUM LEVEL OF INSURANCE COVER

4.1 Minimum Level of Cover

The Amount Insured for each and every Claim (exclusive of Defence Costs) must be at least €1,500,000 (one million five hundred thousand euro).

4.2 Cover for Defence Costs

There must be no limit on the cover for Defence Costs.

4.3 Proportionate liability for Defence Costs

The Insurance may provide that liability for Defence Costs in relation to a Claim that exceeds the Amount Insured is limited to the proportion of such Defence Costs that the Amount Insured bears to the total amount paid or payable to dispose of that Claim.

4.4 No retrospective dates

The Insurance must not exclude or limit the liability of the Insurer in respect of Claims arising from incidents, occurrences, facts, matters, acts and/or omissions that occurred prior to any specified date.

4.5 No other limits

The Insurance may not apply any monetary exclusions or limits except as provided for by clauses 3.1 and 3.3 and where the Insurance is underwritten on a co-insurance basis, to the extent provided for in clause 3.6.2. For the avoidance of doubt, this clause 3.5 shall not be construed to prevent an Insured and an Insurer from agreeing that the cover shall provide for a Self-Insured Excess where this is otherwise permitted under these Minimum Terms and Conditions.

4.6 Co-insurance

4.6.1 The Insurance may be underwritten by more than one (1) Insurer, each of which must be a Participating Insurer and the Insurance may in such circumstances provide that the Insurer shall be severally liable only for its respective proportion of liability in accordance with the terms of the Insurance and shall state the respective proportions of liability of each of the relevant Participating Insurers.

4.6.2 Where the Insurance is underwritten jointly by more than one (1) Insurer, the Insurance must state which Participating Insurer shall be the Lead Insurer and in addition to any proportionate limit of Defence Costs in accordance with clause 3.3, the Insurance may provide that each Insurer’s liability for Defence Costs is further limited to the extent of the proportion of that Insurer’s liability (if any) in relation to a relevant Claim.

5 SELF-INSURED EXCESSES

5.1 Self-Insured Excess

The Self-Insured Excess (if any) applicable to the Insurance is a matter of contract to be determined between the Insurer and the Firm in each case.

5.2 Effect of Self-Insured Excess

5.2.1 The Insurance must provide that the Self-Insured Excess does not reduce or limit the liability of the Insurer contemplated by clause 3.1.

5.2.2 The Self-Insured Excess must not apply to Defence Costs.

5.2.3 The Insurance may provide for multiple Claims to be treated as one (1) Claim for the purposes of the Self-Insured Excess on such terms as the Insurer and the Firm may agree.

5.2.4 In the case of Insurance written on an excess of loss basis, there shall be no Self-Insured Excess except in relation to the primary layer.

5.3 Payment of Self-Insured Excess to Claimant

In the event that an amount which is within the Self-Insured Excess is not paid by a Firm to a Claimant within 30 (thirty) Working Days of its becoming due, the Insurer must redress the default on the part of the Firm and make payment thereof to the Claimant, and in such circumstances, the Insurance may provide that the Insurer shall be entitled to recover any amount so paid from the Firm.

6 Special Conditions

6.1 Minimum Terms and Conditions must prevail

6.1.1 The terms and conditions of the Insurance must comply with the Minimum Terms and Conditions as and to the extent prescribed by the Regulations.

6.1.2 Any provision of the Insurance that is inconsistent with the Minimum Terms and Conditions shall either be severed from the terms of the Insurance or the Insurance shall be rectified so as to comply with the Minimum Terms and Conditions.

6.1.3 The Insurance must provide that the Minimum Terms and Conditions shall always prevail in the event of a conflict between the terms and conditions of the Insurance and the Minimum Terms and Conditions.

6.2 No cancellation

6.2.1 The terms of the Insurance must provide that the Insurance or coverage cannot be cancelled unless:

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