Cover story

Bill Holohan SC, chair of the Law Society’s Professional Indemnity Insurance Committee, speaks to the Gazette about its work

Every solicitor complains about the price of their professional indemnity insurance at renewal time. However, the chair of the PII Committee, Bill Holohan SC, notes that premium renewal prices have come down somewhat in recent years. 

“The most recent PII renewal saw a further stabilisation of the market and a significant reduction in overall premiums paid by the profession as a whole,” he says. 

There was a 20% increase in the premium pool for the 2020/21 indemnity period, a 5.5% increase for 2021/22, but a reduction of 8.4% for 2022/23 and now a reduction of 16.15% for 2023/24.

“This brings premiums to their lowest level since 2018/19,” he says, with stabilisation coming because of leveraging the legal profession’s strong relationships with insurers. “We made clarifying changes to the minimum terms and conditions without reducing PII cover for the profession or the public.” 

There are currently 13 insurers and three insurance facilities in the Irish solicitors’ PII market. Competition increased through the arrival of two new A-rated insurers and one new insurance facility. 

Firms that shop around, rather than staying with the same insurer, see the greatest reductions in premium, he says, urging solicitors to pick up the phone to their broker. And don’t be shy about asking your broker what their cut is, Bill Holohan advises. 

Behind the scenes 

Some of the pleasing reduction in cost can be attributed to the behind-the-scenes work of the PII committee, supported by the expert work of Law Society executive and committee secretary Sorcha Hayes. 

Committee functions include monitoring the implementation of PII regulations and associated documentation, maintaining a stable market, providing guidance to the profession, and attending to all PII queries arising. 

The committee reviews, drafts, and publishes updated PII regulations and associated documentation each year. A regular dialogue is also maintained with insurers in the Irish market for solicitors’ PII. 

Also under committee scrutiny are the management and running of the ‘assigned risks pool’ and the ‘run-off fund’, which covers retiring solicitors for some years after they step down.

Members of the committee are drawn from a variety of practice sizes around the country. Vice-chair Sonia McEntee is a sole practitioner based in Cavan. 

The rating of any individual proposal for insurance depends on the type of work that solicitor does and the profile of their practice. Sole practitioners have a higher risk profile because of a perceived lack of checks and balances from others involved in the firm. 

Holohan notes that complaints about legal services often relate to poor communications, or litigation failures to initiate a claim properly or at all, missing a statute date, for example. 

“My advice is to keep the client informed of every step you take. I do this on a regular business – it might take you another 30 seconds to a minute, but it’ll avoid the ten-minute phone call more often than not,” he says. “You can just do a quick bullet-point communication of what’s going on.” 

Common proposal 

Holohan points to the common proposal form as a sign of progress. “There used to be a system where every insurance company would have its own form, and if you wanted to put in proposals to multiple insurers, you’d have to do multiple forms. Now, in recent years, there is what’s called the common proposal form, which simplifies things,” he said. 

Insurers will also update premiums based on firm turnover and the type of work that is being done. 

“I remember a former attorney general saying that a busy lawyer will make ten mistakes every day. Some could be as simple as a typo. Nine of them will never cross their mind again. But one of ten of those might come back in some way. 

“The one that comes back might result in the claim, but that’s just the occupational hazard of being a professional advisor. That’s why we have the insurance. It’s for the protection of the clients and for the protection of the individuals.” 

The bulk of legal practices countrywide are small, with fewer than ten partners, he says. Usually, small practices do non-specialised work, such as personal injuries, conveyancing, boundary disputes, family law, and employment issues. 

“My neck, my back, my house, my hedge,” Bill quips. He believes that doing regular CPD is another protection for practitioners. 

“There can be changes to the law that people don’t understand or know about. As a result, they may do something that they’ve been used to doing, but which is now no longer the appropriate practice,” he says. 

“Every seminar I go to, I have one of two reactions – ‘that’s good information, that will come in handy’ and/or, more importantly, ‘oh, my sweet God, there’s a file I must check when I get back to the office’.” 

Holohan points to a recent cost penalty imposed by Kennedy J for failure to advise about mediation (see the cover story in the July Gazette). “The warning marker has been set down now, so in the future there could be a case adjourned with cost implications,” he says. 

“My doctoral research shows that the majority of solicitors are aware of mediation, but it’s a bit of a cloud on the horizon, and they are not too sure what’s in the cloud.” 

Cost complaints 

“Everybody complains about the cost but, relatively speaking, the cost of insurance for solicitors is low in comparison to other professions,” Bill continues. 

Recent increases have been due to the global insurance market becoming more expensive across the board, rather than to the costs of the defence of professional indemnity insurance claims, he says. 

“The increase in premiums over the last few years was not caused by an increase in claims, or a poorly performing domestic market, but rather due to an increase in base rates across all books of insurance arising from global insurer losses and solvency requirements.” 

Increased turnover will increase the premium, and a good broker will explain the connection.

“Engage with your broker,” he says. “Get the broker’s advice on it. Find out what the broker is being paid as well. And then find out which insurance companies the broker is dealing with too,” he concludes. 

For further information, all practitioners are encouraged to visit the Law Society’s PII resource pages at lawsociety.ie/ solicitors/business-career-resources/PII. 

Mary Hallissey is a journalist with the Law Society Gazette.