We invite you to read Howden’s response to the SRA consultation on proposed changes to the Minimum Terms and Conditions (MTCs) for solicitors’ professional indemnity insurance.
Increasing access to justice is one of the main drivers for the proposals, which include reducing the minimum limit of indemnity to £500,000, and removing cover for conveyancing services and business clients with a turnover greater than £2m.
The SRA believes that the changes will achieve premium savings that could be passed on to consumers. They also argue that lower premiums could remove barriers to entry to the legal profession and encourage new firms, increasing competition and the opportunity for people to access more affordable legal services.
Howden does not agree that the changes will result in any meaningful reduction in premium. We are also concerned that the proposed changes will:
- Compromise public protection which was the cornerstone of the MTCs when they were established back in 2000;
- Compromise the protection of solicitors and law firms;
- Create uncertainty;
- Lead to claims that will not be covered either in whole or in part, compromising the “solicitor brand” in the legal services market place;
- Increase the incidence of coverage disputes, which will increase costs;
- Create a two tier profession as sophisticated buyers move their business away from smaller practices that reduce their cover, or are more likely to do so in the future;
- Make the PII purchase more complex.