The Gazette 1967/71

being made up. The premiums must inevitably bear some relationship to these increasing awards, as so many claims result from personal injury writs going out of time. 3. Premiums are calculated on a per capita basis. With the inevitable inflation which is built into our economy, the sums which solicitors handle certainly rise, but solicitors do not necessarily have to employ more staff to deal with the situation. 4. Many of the larger firms with offices in the centres have been employing organisation and methods men to have themselves computerised and automated. One firm is reported as having effected a twenty per cent reduction in staff. There is hardly a reduction in risk to the insurer. 5. The Companies Bill and the corporation tax and the vast quantities of paper now emanating from Whitehall makes the solicitor's life extremely complicated. It is almost too much to ask to keep up with it all, but potential risk to his professional indemnity policy is increased. Not only are some of these additional risks in themselves, but they also contribute to the fre quency of the traditional claims. Each year in creasing amounts are paid out as a result of failure to institute proceedings within the statutory period for personal injury claims. This situation could be further aggravated by recent court decisions. The Law Society has this situation under close surveil lance, as failure to reverse the decisions will make the pitfalls of personal injury claims even greater. Failure to make adequate searches in conveyanc ing matters and failure to register hire purchase companies under the Moneylenders Act are other causes of very substantial losses to insurers. Inevitably the solicitors who have been insuring for a considerable number of years and who have never had a claim will feel that they are financing their careless colleagues, and should not, them selves, be called upon to pay additional premiums. The principle of insurance is, however, that the misfortunes of the few should be spread among the many. Instead of having an average scale to which percentage reductions are applied following a good record, a minimum rate is charged and so firms which have a worse than average claims experience must have terms applied. These usually take the form of a compulsory uninsured excess or a precentage increase in premium. Thus a sort of no claimes bonus in reverse is established and there 13

Oulton Road, Clontarf, Dublin, 3. Robert Michael Flynn, Ballyhaunis, Co. Mayo. John Patrick Gaffney, 10, Harcourt Terrace, Dublin, 2. Brian Gartlan, 11, Killarney Parade, N.C. Road, Dublin, 7. Garrett Gill, 30, Merlyn Road, Ballsbridge, Dublin, 4. John N. R. McM. Glynn, B. G. L., LL.B,. Ballinacarrig, Killiney Road, Co. Dublin. Anthony T. Hanahoe, 35, Hollybrook Road, Clontarf, Dublin, 3. John F. Hayes, B.C.L., LL.B., Tyrone, Nenagh, Co. Tipperary, Silver Medal. James Heney, B.G.L., LL.B., Kilfeacle House, Tipperary. Declan A. Howley, Wine Street, Sligo. Desmond Houlihan, B.C.L., LL.B., Cragleigh House, Ennis, Co. Clare. James W. Houlihan, B.A., 10, John's Place, Birr, Co. Offaly. William A. James, La Verna, Mountgorry, Swords, Co. Dublin. John H. Matthews, River Hill, Baltray, Co. Louth. Donnchadh O'Buachalla, 12, Ardagh Park, Blackrock, Co. Dublin. Maeve Therese O'Donoghue, B.C.L., 13, Brighton Vale, Monks- town, Co. Dublin. Malachy J. O'Kane, B.A., "Sanzio", The Crescent, Ballintemple, Co. Cork. The solicitors and their friends were subequently entertained to tea in the Council Chamber. PROFESSIONAL INDEMNITY INSURANCE The Case for a Rate Increase. All leading insurers have increased the premiums on Solicitors' indemnity policies with effect from 1st December, 1967. Although this is in fact the first general increase in rates since 1st January, 1962, it will inevitably be the cause of much con cern in the profession. Such questions as: "Are the increased premiums justified? "What can be done to prevent further increases?" "Are solicitors with a good record unduly subsidising those with a bad record? are sure to be asked. The reasons for the immediate premium in crease can be given in three words, namely, "in creased claims payments". With the present position worsening the follow ing considerations also weigh heavy with insurers: 1. Undoubtedly the professional man has an in creased burden of responsibility under the Hedley Byrne v. Heller principle. There has not yet been a case in court of a claim against a solicitor re lying on the principle, but there have been many cases advised to insurers of such circumstances. 2. Court awards in this country are still far lower than comparable cases in France, Ireland and, of course, America. The leeway is, however, rapidly