FIGURES published by the Law Society, which purport to show that most firms would be worse off buying insurance on the open market, are biased in favour of the Solicitors Indemnity Fund (SIF), it has emerged.
The figures are presented in the form of a table which has been sent out to every solicitor in the country along with the society's consultation paper on the future of professional indemnity insurance. The table compares how a “range” of firms would fare if they sought insurance on the open market. But an analysis of these firms shows they are getting a better-than-average deal from SIF exaggerating the difference between the two options.
On average, firms contribute 3.5 per cent of their gross fees to SIF, but the average contribution being made by firms on the table was half that.
SIF makes much of the table in a strongly worded statement calling for the profession to stick with the fund.
Elizabeth Mullins, director of SIF, conceded that the sample was not representative of the profession as a whole.
She said: “The firms were not chosen to replicate a cross-section of the profession. We tried to give a complete spread of type of firms, with varying gross fees and claims records. We acted in good faith.”
Mullins also pointed out that a separate report, compiled last month by Sedgewick Risk Consulting, showed that SIF would cost the profession overall 30 per cent less than the open-market option.
But Trevor Moss, director of broker Nelson Hurst & Marsh, which has published a report claiming that the private market can give most firms a better deal, has written to more than 1,100 firms offering to provide a quotation on premiums.