The Gazette 1978

Professional Indemnity Insurance By MICHAEL BROOKS

actions and lawyers working on a contingency fee basis which are not permissible here in Ireland, at least not yet. The government is actively encouraging foreign companies to open up in Ireland and through the efforts of the I.D.A. has had some very notable successes with companies; for example, there were over 200 U.K. companies and 200 U.S. companies operating in Ireland at the end of 1976. What happens, may I ask, if a solicitor makes a mistake with one of these clients? I will deal with possible answers when I get on to the third part of my talk. Staying on the international scene and turning to lawyers in other countries, there are more and more countries turning to compulsory insurance. I believe that the first compulsory lawyers' insurance scheme was for the Upper Canada Law Society (Ontario). This was quickly followed by all the rest of Canada except Quebec. In 1975 in England and Wales the Law Society brought in compulsory insurance. Northern Ireland and Scotland have now followed suit. This year sees the State of Victoria introduce a compulsory scheme and all the rest of the States in Australia have indicated that they will follow suit. The reasons for compulsory insurance in England and Wales was strong government pressure to protect the public. There were a few cases of "widows and orphans" unable to collect from solicitors who were negligent as either there was no insurance or the insurance was avoided for one reason or another. Much nearer home there was the case in New Ross which received so much national publicity. The current Law Society insurance cannot be voided for any reason. If this scheme had not been put into effect the government (both Conservative and Labour) made it quite clear that they would bring in their own solutions. Once again we see how consumerism is very popular with governments — it gets votes. There is one very significant difference between Upper Canada and Victoria where they use knowledge obtained from insurance claims for disciplinary purposes, whereas There are many more opportunities than risks in the pressure for opening up the Bar. For one thing, the profes- sion's record is far from bad. Much needs to be examined and restructured, but going public can only help those ef- forts. No one expects miracles or total consensus, but the public has the right to expect professional exposition of is- sues. This is what attracted the 340 media representatives to the recent Annual Meeting. Good lawyers have no trouble with the idea of an open profession. For the most part, they've been struggling for years against the apathy of fellow professionals, including that of a few partners obsessed with recording billable hours. They also have encountered resistance from some hidebound law professors and judges. These lawyers know better than the critics the problems and failures of the profession. But they also believe in its potential and are committed to its development. They recognize that going public can only help.

I would like to divide my talk into three main headings: (1) International; (2) European; and (3) Irish. Of necessity there will be some over-lapping, but this is hard to avoid. International About fifteen to twenty years ago Mr. Ralph Nader came on to the American scene, fired with the zeal of youth he was going to get a better deal for the American public. This is now known as consumerism. There is no need here to go into what happened as it is well known to all of you, but the stone that Mr. Nader threw into that American pond produced ripples that have apread far beyond the shores of the U.S.A. Nader's initial attack was against large manufacturing companies and defective or shoddy goods, but the ripples have now gone far beyond this and spread to professional firms. This started about ten to fifteen years ago when the large U.S. accounting firms began to get numerous law suits against them with ever increasing settlements against them. Last year, we had the settlement in the Equity Funding debacle which resulted in three accounting firms having to pay $39 million between them (the amounts paid by each firm were not disclosed). In the "U.S. Financial" case last month there was an award against one of the big eight accountants in the California State Courts of $30,000,000 with a Federal Court case still to come. Rumour has it that a law firm also involved in the State Court case settled out of court for somewhere between six and eight million dollars. Now you may well say that these figures are fine in the U.S.A. but they could never happen in Ireland. I would agree that there are many factors which in the U.S.A. lend themselves to large awards. Factors such as class Continued from page 32 sionalism accordingly. It is served by the media in passing judgment on the powerful. Justice Steward finds historic roots for this role: "The British Crown knew that a free press was not just a neutral vehicle . . . Instead, the free press meant organized, expert scrutiny of government. The press was a conspiracy of the intellect, with the courage of numbers. This formidable check on official power was what the British Crown had feared — and what the American founders decided to risk". In our day the media are pursuing more than the "eyes and ears" role of an earlier era. They have become a "special prosecutor" searching out the evidence concern- ing the doings and failings-to-do of major American in- stitutions. This is a righteous as well as heady function that members of the fourth estate will not likely disclaim in the near future. We lawyers, closely tied to the third branch of government as well as to powerful clients, are a ubiquitous target.

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