Brian Marson is not impressed by the Law Society's attempt at a debate on the indemnity shortfall and neither is he happy with SIF's explanations. Brian Marson is managing partner of Marsons.
It is still unclear exactly how large the shortfall is on our self-insured fund. If we accept the figure of £433m, which is the one most commonly quoted, it means that at the present time every solicitor in practice in England and Wales can look forward to a bill of about £50,000 or thereabouts on top of the annual premium.
So when I attended the Law Society's recent “Great Debate” on indemnity insurance, I expected that it had been necessary to hire the Albert Hall or a similarly large venue to accommodate all the angry solicitors armed with rotten eggs.
In the event, the Law Society common room was probably half full, making me wonder precisely how important a debate has to be to attract maximum interest.
As it turned out, those who did not attend did not miss much. In fact, had I bought a ticket I would have asked for a refund. For the first half hour or so nothing more than a history lesson was delivered, dealing with the 1970s and 1980s and how our self-insured fund came into existence.
The next speaker was introduced as “the person who expressed the minority view”. This turned out to be an argument in favour of our being allowed to insure in the general marketplace instead of in a self-insured fund. Considering that the discussion papers do not have to be returned until the end of July, I wonder how a minority view actually exists at all.
Next we were introduced to the managing director of the Solicitors Indemnity Fund, Elizabeth Mullins.
She fired facts and figures at us for more than 30 minutes. Words and phrases like “reinsurance”, “marketplace”, “commission” and “general value for money” were delivered loud and clear.
But by the end of Mullins' speech, I was left with a single thought: this had all been a mighty cock-up by SIF.
SIF has only existed 11 years or so, has taken hundreds of millions of pounds in premiums from our profession and seems, through general bad management, to have stuck us with a massive shortfall in funds.
The general problem seems to be that no reinsurance was taken in the early 1990s in particular. At that time, there was a hard core of solicitors – people like Paul Marsh and myself – who warned that claims against the fund would rise.
One sentence used several times during the debate was “risk management for all”. Somehow the mess we are in is purely our problem. Bearing in mind the amount recovered from us by the lending industry, I thought risk management would include standard mortgage instructions, but it does not.
To cap it all, instead of a lively debate, there seemed to be no chairman to control the meeting after the final speaker.
I expected to hear answers to questions at the debate, not weak explanations and very little in the way of answers.
All of us need to know the truth. There can be little confidence remaining in the ability of SIF to manage insurance affairs. And while Mullins did not actually apologise for all the mistakes, she did admit they had happened.
It was a shame that a big event like this, about a problem which could drive many smaller and less successful firms out of business, was not well attended and not very well presented.