With the Legal Services Act reaching its full potency this coming October, hot on the heels of the solicitors’ professional indemnity insurance renewal date, the legal profession is awash in fears of its impending doom at the hands of outsourcing companies, banks, and grocers through such facilities as Tesco Law.
Industry experts may differ on what the advent of the new legislation may mean for the legal profession and the related professional liability insurance industry, they are united in saying that times indeed are a-changing. The deregulation brought by the Legal Services Act turns out to be only one of several issues that could create what many are calling the ‘perfect storm’ for the legal industry.
In addition to Tesco, which still may or may not commit to selling legal services along with tins of kippers,there are several other entrants that have already developed consumer engagement strategies. As a result, insurers have begun to shift uncomfortably at the prospect of the influx of new entrants, especially so close to the October 1 business liability insurance renewal date for solicitor firms.
Some 10,000 legal firms in Wales and England will face having to renew their compulsory insurance cover or risk being unceremoniously binned into the insurer of last resort, the Assigned Risks Pool. The ARP is set to swell with reduced fluidity in the solicitors’ insurance market due to insurers hiking premium rates in an effort to cherry-pick firms with low risk profiles, industry experts predict.
While there have been some new entrants into the solicitors’ insurance market this year, many others have decided to decline writing new book for the upcoming renewal year due to growing liability concerns.