The Gazette 1978

GAZETTE

MARCH 1978

sue him, I play golf with him twice a week, anyway he is married to my wife's cousin, things will work themselves out. In my opinion, these days are coming to an end. No longer have you only got families living in an area who have lived there for generations, but you have Americans, Germans, French, Dutch, Belgians, Japanese and heaven knows who else. But, as with all good things, there are bound to be some disadvantages. When a person has lived in a country for all of his working life he is bound to pick up some of its bad habits. There is a saying in a lot of the big cities in the U.S.A. where a man will show you a dollar bill and ask you to read what it says on the back, which bears the inscription "In God We Trust" to which he will add "All others pay cash." Maybe that is a bit cynical but it is an attitude of mind which is not that uncommon. Now I am quite sure that all of the gentlemen here have P.I. insurance but I wonder how many of you carry high enough limits. My own philosophy (and that is shared by our group world-wide) has two basic principles in this regard. Firstly, we in Minets buy the maximum limits that are available in the world-wide market, and secondly, we self-insure the largest deductible that we think that we can afford. Ignoring our size we have one very real advantage over a firm of solicitors. We are a limited liability company, wjiereas you are either sole practitioners or partnerships, both with unlimited liability. A firm of solicitors has one other disadvantage in that, if you are made bankrupt you are automatically disbarred and are unable to carry on earning your living in probably the only way you know. Now I can't tell you how high you should go, you are in a much better position to do this yourselves by looking at some of the numbers involved with your larger clients. As an example, I have more than one client in the U.K. who has asked us to place limits of £100,000,000. (We are unable to place such high limits but we can place very substantial limits.) The attitude of these clients is that they don't think they are going to make a mistake, however they say they are involved in huge property deals,fleets of supertankers and aeroplanes where the values run into hundreds of millions and if they do make a mistake on one of these it could be a big one. When they find oil in Irish waters there is going to be some very large business for the Irish legal profession on top of business that is already here from large inter- national companies. This should be of great financial benefit to the Irish legal profession. Gentlemen, don't ruin it for yourselves by not buying enough insurance.

in the U.K. they were most insistent that insurance claims must not be used for this purpose. Only time will tell who was right. Europe When Ireland the the U.K. joined the EEC we signed the Treaty of Rome and by doing so voluntarily agreed to give up part of our sovereignty. As I understand the situa- tion (and I am not a lawyer) one of the things we have done is to transfer thefined court of appeal from our own countries to the European Court in Luxembourg. As a result of this, who knows what the legal poosition in any one country is going to be in five to ten years time. We have already had a test case of a lawyer being able to move from France to Belgium or vice versa. Let me quote a hypothetical case: we have a large U.S. client firm with subsidiaries in several European countries including the U.K. and Ireland. The U.S. parent approaches a firm of English solicitors to look after their European affairs. The English solicitor appoints an Irish firm to look after the Irish subsidiary's legal affairs. In presenting their consolidated report, the English .firm includes the report of the Irish firm. Now let us suppose in this fairy story that the Irish firm has made a mistake. The U.S. client sues the English solicitor in the U.S. courts and is awarded $10,00,000 (not an excessive sum for professional negligence). The U.S. client then goes to the U.K. courts who have no option but to ratify the decision. The English solicitor is left with no option but to seek redress against the Irish firm. Now I will admit that this has not happened yet, but bear in mind that if you become aware of a mistake today it will probably be anything from five to ten years before the matter is finally resolved. Is there anyone here who is brave enough to say that in five to ten years time it could not happen? Ireland As you know, Minet Ireland are the official brokers to the Law Society of Ireland. It is rather difficult to be precise, but our best educated guess is that only 30% to 40% of firms of solicitors carry any indemnity insurance at all. This state of affairs cannot be in the interests of the profession as a whole. I know that quite a large number of solicitors have country practices, in what for centuries have been very close-knit communities that stick very closely together especially in times of adversity. And that, in the past, if the local solicitor made a mistake the client's attitude was — oh well, it was just one of those things, anybody can make a mistake, I could not possibly

This Is a slightly edited text of a speech, delivered by Michael Brooks of Minets, International Insurance Brokers, London, to representatives of professional firms in Dublin on 20th January 1978.

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