Property outed as negligence magnet

Law firms specialising in property work are most likely to find themselves on the wrong end of a professional negligence claim.

A review of the first full year since the demise of the Solicitors Indemnity Fund (SIF) has been conducted by insurance broker Alexander Forbes. It rev-ealed that 40 per cent of all notifications made to professional indemnity insurers related to prop-erty instructions.
At firms with at least 16 partners, the figure for property-related problems fell slightly to 38 per cent. Residential and commercial property were combined for the purposes of the research. Following these chief culprits for negligence claims was litigation and then company and commercial work in third place. The practice area that gave rise to the least professional indemnity notifications was personal injury.
Tony Blyfield, managing director at insurance broker Alexander Forbes Professions, said: “The chances are that, over the next 12-24 months, the market will consolidate, with fewer insurers writing solicitors' professional indemnity insurance. In view of current market conditions, premiums are likely to rise in the foreseeable future.”
He added that knowing which practice areas are most prone to claims will encourage firms to improve risk management and consequently benefit from lower premiums.