The Gazette 1973

marginal cost of prisoners was so low was because of the readiness of the Prison Department to allow over- crowding in prisons. But the paper helps penal reformers in their cam- paign because its main message is that it is no use transferring a few prisoners to probation schemes and expecting to save money. To achieve any economy, radical transfers have to be made. No one now doubts that there is a large number of people in prison who do not need to be there. Police, probation, and prison officials are all agreed that the homeless, the alcoholic, and the mentally sick should be somewhere else. Mr. Nuttall's contribution has been to show that it may be cheaper to be radical than timid. The Guardian (18 September 1973)

Cost of Prison Perhaps the biggest fillip to the penal reformers' campaign to cut down the number of people in prison was a paper produced by Christopher Nuttall, a Home Office senior research officer. Ironically the paper took issue with the penal reformers' claim that, because it cost £35 a week to keep a man in prison (not including supplementary benefits which have to be paid to his wife and children) and only £4 a week to keep him on probation, it was cheaper to place a man on probation. The paper showed that the marginal cost of one extra prisoner was much less than £35. The extra pris- oner did not require extra staff, facilities, or in some prisons, food. The marginal cost of one extra prisoner could in fact be less than £4. As Edmund Dell, the Labour MP for Birkenhead, pointed out at the conference, one reason why the

PROFESSIONAL NEGLIGENCE INSURANCE AND THE LAW SOCIETY IN ENGLAND by GEORGE B. BATES

liable to be forced into paying disproportionate prem- iums. Certain it is that compulsion will not reduce premiums, which are already a heavy burden on prac- titioners. It would be interesting to know what percen- tage of solicitors do, as not effect professional negligence insurance. I suspect that the percentage is very low. The Council of the Law Society obviously gave consid- eration to one or other of these schemes in the (I think mistaken) belief that professional negligence insurance was becoming more and more difficult to obtain and might become eventually unobtainable. Specialist insurance market I doubt whether this is so. What has happened in practice is that many of the larger insurance groups have left the underwriting of professional negligence insurance to the specialist insurance market and this has led to the mistaken belief that the capacity for this class of insurance would eventually disappear. In recent years there has been a withdrawal from the market of non-specialist insurers, but this is entirely justified in the light of the necessity to underwrite professional negli- gence insurance upon the basis of a wide portfolio. I am advised that correctly underwritten professional negli- gence insurance is both attractive and profitable to the specialist insurer. On the other hand the increasing cost of insuring against professional negligence is a matter of concern for nearly all practising solicitors, particularly those who have had the misfortune to have one or two claims in the past. It seems self-evident, however, that to give the mono- poly of this type of insurance to one or even two com- panies (i.e. the master policy scheme) will certainly not reduce the cost of the premiums owing to the removal of the competitive element which alone keeps premiums down, although it may be beneficial to the companies concerned on the basis of the premise stated above, that it is necessary if professional negligence insurance is to 249

It now seems almost certain that the Solicitors (Amend- ment) Bill, albeit after a change of clothes, is unlikely to pass into law owing to opposition from certain non- legal members of Parliament who will persistently block the Bill on the second reading. However, it seems not unlikely that if the Bill is pre- sented again next session it will at least have Govern- ment backing if a Government Bill does not take the place of the present private member's Bill. The demise of the Bill cannot be a matter for regret for, although it contains some useful provisions, there is nothing in it which could not wait for a couple of years if necessary for implementation, and other provisions which ought never to be made law. However, there is one clause in particular which did not appear in the first Bill, but appears in the current one, namely Clause 7, which gives the Law Society wide powers i n regard to professional indemnity insurance. Law Society's proposal Readers will remember the announcement which appeared in the Law Society's Gazette on 11 October 1972 to the effect that the Council of the Society had it in mind to consider taking care of solicitors' profes- sional indemnity insurance either by itself establishing a scheme or fund for this purpose or (more likely) negotiating a single master policy with the insurance market for the profession as a whole. Whichever scheme is adopted, it is proposed that in any event insurance against professional negligence should be made compulsory for solicitors and that a solicitor would not be able to obtain a practising certi- ficate without effecting satisfactory insurance. It is questionable whether the idea of compulsion is a good one, having regard to the effect it may well have on the size of premiums, since practitioners will be