David Niven & David O’Brien consider the obstacles ahead for PII claimants
Professional negligence claims are an unfortunate fact of professional life: unfortunate for the professional and client alike. Professional indemnity (PI) insurance exists, in theory at least, to protect those unfortunate clients and to ensure that they recover the losses which they have suffered as a result of negligent advice or service. In practice, many claimants find themselves fighting a second and/or simultaneous battle with the PI insurers. This article focuses on professional negligence claims against solicitors.
Fully covered?
The first stumbling block for a claimant is that neither the defendants nor their insurers are required to confirm that the claim will be covered by the PI policy, nor to disclose the terms of indemnity under the policy, until the defendant solicitors have gone into insolvent liquidation. At that point, and having proven their claim, claimants can pursue the insurers directly under the Third Party (Rights Against Insurers) Act 1930.
There is therefore a very real risk that a claimant can incur substantial costs bringing a claim to trial,
