It is important for solicitors practising outside private practice to understand how professional indemnity insurance (“PII”) matters affect them. The PII regulations provide that a practising certificate may be refused to a solicitor unless the firm in which they practise provides evidence of PII to the Law Society or the solicitor is exempted from PII requirements because they provide legal services to their non-solicitor employer only.

Solicitors employed in the full-time service of the State

Solicitors employed in the full-time service of the State are exempt from the requirement to have PII cover in place. Therefore, the compulsory PII provisions do not affect them.

Solicitors employed in the corporate and public sector

Regulation 4(e) of the Solicitors Professional Indemnity Insurance Regulations 2020 (S.I. 429 of 2020) provides an exemption for practising solicitors employed in the corporate sector, as follows:

(e) Subject to Regulation 24, Regulation 4(a) shall not apply to or in respect of any solicitor or registered lawyer who provides legal services only as part of an employment within the State to provide legal services to and for his or her employer, provided that:-

(i) the solicitor’s or registered lawyer’s employer is not a solicitor or registered lawyer; and

(ii) the solicitor or registered lawyer confirms to the Law Society in a manner acceptable to it that, for the duration of a relevant indemnity period, the solicitor or registered lawyer has not and will not engage in the provision of legal services to or for any person other than his or her employer.

Solicitors with a contract for services with a non-solicitor employer (a contract for service applies in the case of an independent sub-contractor while a contract of service applies to an employee-employer relationship) can be exempt from the requirement to have PII in place provided the following criteria are met:

1. The solicitor provides legal services only to the company or group with which they have a contract for services,
2. The indemnity provided by the company forms a deed of indemnity between the solicitor and the company and is dealt with by way of private company contract law,
3. The company is aware that the solicitor does not hold any PII and is required to confirm same in writing directly to the Society, copying the solicitor,
4. The solicitor does not, and the company is aware that the solicitor cannot, provide legal services to third parties, including clients or customers of the company, and the company is required to confirm same in writing directly to the Society, copying the solicitor,

The PII waiver for in-house solicitors extends to services provided during the course of the solicitor’s employment with the employer (that is, a contract of service) to or in respect of the employer, any subsidiary or holding company, or any subsidiary of such holding company of the employer, within the meaning of sections 7 and 8 of the Companies Act 2014.

If a joint venture is entered into with another company or group of companies, where the group company is not within the employer’s group of companies, then no PII waiver shall extend to this joint venture where the employer’s group does not have a majority stake.

Personal liability

Although a solicitor may benefit from an exemption in respect of compulsory professional indemnity insurance, it is still important for corporate solicitors to ensure that there are, in fact, adequate arrangements in place to protect that solicitor’s own personal liability. There are two aspects to this: employer’s indemnities and employer’s waiver.