Solicitors (Amendment) Act, 1994

PART IV

Protection of Clients

Provision of professional indemnity cover.

26.—(1) The Society may make regulations (in this section referred to as “indemnity regulations”) making provision for indemnity against losses arising from claims in respect of any description of civil liability incurred—

(a) by a solicitor arising from his practice as a solicitor, or

(b) by a partner, clerk or servant or former partner, clerk or servant of a solicitor arising from that solicitor's practice as a solicitor.

(2) For the purposes of providing such indemnity, indemnity regulations may do any one or more of the following, namely—

(a) authorise the Society to establish and maintain any indemnity fund or funds, including a mutual fund;

(b) authorise the Society to effect and maintain a general policy of indemnity insurance making provision for indemnity against losses arising from claims in respect of any description of civil liability, in which solicitors would be required to participate;

(c) require solicitors or any specified category of solicitors to effect and maintain a policy of indemnity insurance with insurers approved of by the Society or to participate or to continue to participate in a fund or funds established or maintained pursuant to paragraph (a) of this subsection or in any other fund approved of by the Society, including the mutual fund known as the “Solicitors Mutual Defence Fund Limited”.

(3) The Society may, without prejudice to any of their other powers, carry into effect any arrangements which they consider necessary or expedient for the purpose of ensuring that there is indemnity against losses pursuant to this section.

(4) Without prejudice to the generality of subsections (1), (2) or (3) of this section, indemnity regulations may—

(a) specify terms and conditions on which indemnity against losses is to be available to solicitors from any indemnity fund or funds or under any general policy of indemnity insurance or under any policy of indemnity insurance with insurers approved of by the Society and any circumstances in which the right to such indemnity is to be excluded or modified;

(b) specify minimum levels of cover for indemnity against losses arising from claims or different classes of claims;

(c) provide for the management, administration and protection of any fund maintained under subsection (2) of this section and require solicitors or any specified category of solicitors to make payments to any such fund;

(d) require that solicitors or any specified category of solicitors make payments by way of premium in respect of any general policy of indemnity insurance maintained by the Society by virtue of subsection (2) of this section;

(e) specify conditions which indemnity cover shall satisfy for the purposes of subsection (2) of this section;

(f) provide for the determination by the management of any fund maintained by the Society under subsection (2) of this section of the contribution payable by solicitors or any specified category of solicitors in respect of each description of civil liability for which cover is provided by such fund;

(g) specify the circumstances in which, where a solicitor for whom indemnity cover is provided has failed to comply with the indemnity regulations or with the terms and conditions of such indemnity cover, proceedings for the recovery of sums paid by way of indemnity against losses in respect of that solicitor may be taken against him by the providers of such indemnity cover or by the Society, as may be appropriate;

(h) specify circumstances in which any solicitor or specified category of solicitor may be exempted from the indemnity regulations;

(i) enable the Society to take such steps as they think necessary or expedient to ascertain whether or not the indemnity regulations are being complied with;

(j) include arrangements for the submission to arbitration of any dispute arising between a solicitor and his client in relation to any claim or claims by the client against the solicitor in respect of civil liability to which the indemnity regulations apply by reason of the provisions of this section, where both the solicitor and the client have agreed in writing to submit the dispute to arbitration;

(k) specify the manner in which solicitors or any specified category of solicitors shall bring their compliance with, or exemption from, the indemnity regulations to the notice of their clients or the Society; and

(l) include incidental, procedural or supplementary provisions in relation to any of the matters set out in paragraphs (a) to (k) of this subsection.

(5) Notwithstanding the foregoing provisions of this section, the Minister may direct the Society to make or amend indemnity regulations.

(6) It shall be misconduct for a solicitor to whom indemnity regulations apply knowingly to make a false or misleading declaration of a material nature for the purpose of obtaining indemnity against losses arising from claims in respect of any description of civil liability incurred by him.