Insurance premiums for lawyers could increase dramatically following a Court of Appeal decision for no time limits for professional negligence claims.
Until now all claims were barred 15 years after the events happened unless facts had been deliberately concealed by the lawyers involved.
But Reynolds Porter Chamberlain partner Jonathan Davies says this case has reinterpreted the rule to lift the time bar altogether on “acts deliberately done” that cause a breach of the duty. So any negligent act now has no time bar, rather than just those deliberately intended to breach the duty. “Any act will now be deliberate. Negligence amounts to a breach of duty,” he says.
Most firms have policies that give six years' cover after people stop practising. As well as increasing premiums the decision means law firms will have to keep documentation forever to protect against future claims.
Davies says: “For professional firms it's frightening. They could face a host of claims rising from the dead. If it isn't appealed the Law Commission should look at it.”