Solicitors Professional Indemnity Insurance Regulations 2019.

• Published date: 20 September 2019
• Statutory Instrument No.: 465/2019

Notice of the making of this Statutory Instrument was published in

“Iris Oifigiúil” of 20th September, 2019.

ARRANGEMENT OF REGULATIONS

CONTENTS

Page No 1. CITATION: 3 2. INTERPRETATION: 3 3. FIRM 18 4. MAINTENANCE OF INSURANCE: 18 5. SELF-INSURED EXCESS ON QUALIFYING INSURANCE: 21 6. MAINTENANCE OF INSURANCE IN RUN-OFF: 21 7. DEFAULTING RUN-OFF COVER: 22 8. ESTABLISHMENT OF SPECIAL PURPOSE FUND: 23 9. ENTERING THE RUN-OFF FUND: 23 10. COMPLIANT AND NON-COMPLIANT RUN-OFF FIRMS 25 11. ARBITRATION 26 12. ENTERING THE ASSIGNED RISKS POOL: 27 13. OPERATION OF ARP COVERAGE: 30 14. MEMBERSHIP OF THE ASSIGNED RISKS POOL: 31 15. VARIATION OF THE MINIMUM TERMS AND CONDITIONS IN RESPECT OF COVER GRANTED BY THE ASSIGNED RISKS POOL: 32 16. DEFAULTING FIRMS: 33 17. INSOLVENCY OF PARTICIPATING INSURERS AND OTHER EVENTS: 33 18. RISK MANAGEMENT AUDITS: 35 19. RISK MANAGEMENT AUDIT REPORTS: 36 20. RESPONSIBILITIES OF PRINCIPALS: 38 21. PROFESSIONAL INDEMNITY INSURANCE COMMITTEE: 40 22. SPF MANAGEMENT COMMITTEE: 43 23. PROVISION OF INFORMATION AND CO-OPERATION WITH QUALIFYING INSURERS AND SPF MANAGER: 43 24. AMENDMENT TO INDEPENDENT LAW CENTRES REGULATIONS: 44 SCHEDULE 46 Table of Revocations 46 APPENDIX 1 47 Minimum Terms and Conditions of Professional Indemnity Insurance for Solicitors and Registered Lawyers in Ireland 47 APPENDIX 2 75 Risk Management Audit Terms of Reference 75

THE LAW SOCIETY OF IRELAND, in exercise of the powers conferred on it by section 26 of the Solicitors (Amendment) Act 1994 , hereby makes the following Regulations:-

1. Citation:

(a) These Regulations may be cited as Solicitors Professional Indemnity Insurance Regulations 2019.

(b) These Regulations shall come into operation on 1 December 2019.

(c) The regulations listed in the Schedule to these Regulations shall cease to have effect as and from 11:59:59 pm on 30 November 2019 to the extent set out in the Schedule.

2. Interpretation:

(a) In these Regulations, the following terms shall have the following meanings—

“additional ARP premium” has the meaning ascribed to it in Regulation 12(e)(ii);

“ARP” means the assigned risks pool;

“ARP coverage” means an arrangement for indemnification issued by the SPF manager on behalf of those participating insurers that participate in the assigned risks pool in respect of the indemnity period in which the coverage incepts and incorporating the minimum terms and conditions as varied by these Regulations but shall not include coverage issued to a defaulting firm through the assigned risks pool;

“ARP default premium” means the sums payable by a defaulting firm for any coverage arranged pursuant to Regulation 16(a) from time to time;

“ARP eligibility criteria”, in relation to a firm, means that the firm does not hold qualifying insurance with a participating insurer and:-

(i) (a) in respect of a firm that held ARP coverage from the assigned risks pool for the indemnity period which commenced on 1 December 2010, that the firm has not been in the assigned risks pool for more than 24 (twenty four) of the 60 (sixty) months preceding the date of its application to enter the assigned risks pool and is not a succeeding practice to such a firm; or

(b) in respect of all other firms, that the firm has not been in the assigned risks pool for more than 12 (twelve), or such other period (not to exceed 24 (twenty four) months) as the PII committee may from time to time determine, of the 60 (sixty) months preceding the date of its application to enter the assigned risks pool and is not a succeeding practice to such a firm; and

(ii) in respect of a firm which commenced practice on or subsequent to the operative date, it established qualifying insurance with a participating insurer or more than one (1) participating insurer with effect from the date of commencement of its practice; and

(iii) that no direction in relation to the firm is in effect pursuant to Regulation 18(g) or Regulation 19(e)(iv); and

(iv) that the firm is not a defaulting run-off firm;

“ARP eligibility dispensation” means, in respect of any firm, a dispensation under Regulation 12(b);

“ARP eligible firm” means a firm that satisfies the ARP eligibility criteria or in respect of which an ARP eligibility dispensation is in effect;

“ARP premium” means, in respect of each firm which has been issued with an ARP coverage, the initial ARP premium and the additional ARP premium in respect of an indemnity period (or part thereof);

“ARP premium schedule” means the schedule to be determined by the PII committee and published by the Law Society from time to time which sets out the terms pursuant to which premium levels, in respect of firms which are issued with coverage in the assigned risks pool, are to be determined by the SPF manager in accordance with these Regulations;

“ARP run-off cover” means run-off cover from the run-off fund on like terms and conditions to ARP coverage;

“ARP run-off eligibility criteria” means in relation to a firm:-

(i) a firm which held ARP coverage on the date of cessation of its practice; and

(ii) in respect of a firm which held ARP coverage prior to the operative date, continued to satisfy the ARP eligibility criteria on the operative date; and

(iii) a firm in respect of which there is no succeeding practice; and

(iv) a firm which is not a defaulting firm;

“ARP run-off eligible firm” means a firm which satisfies the ARP run-off eligibility criteria;

“assigned risks pool” means the assigned risks pool referred to in Regulation 8 through which an ARP eligible firm or a defaulting firm may obtain or be granted coverage that incorporates the minimum terms and conditions as varied by these Regulations;

“authorised insurer” means an insurer that holds an authorisation to carry on insurance business for the purposes of Directive 2009/138/EC or that is otherwise entitled to carry on non-life insurance business in the State;

“claim” means a request or demand for, or an assertion of a right to, or an intimation of an intention to seek:-

(i) civil compensation of any nature or civil damages of any nature; or

(ii) any award to be made pursuant to the provisions of the Solicitors Acts 1954 to 2015, the Legal Services Regulation Act 2015 , or any regulations made thereunder, for compensation or restitution to clients or any other obligation that may be imposed on solicitors or registered lawyers to compensate or make restitution to clients by statute from time to time, but for the avoidance of doubt, the term “claim” does not include any claim for the payment of costs incurred by any insured in defending or resisting proceedings seeking an award against that insured of the nature described in this sub-paragraph (ii) where the insurance, in accordance with the minimum terms and conditions, excludes the insurer’s liability to indemnify the insured in respect of such costs.

For the purposes of sub-paragraph (ii) above, the discharge of an obligation of an insured, following receipt by an insured of a notification of a requirement to rectify, shall be treated as a “claim” (subject to the provisions of the regulations and/or minimum terms and conditions) notwithstanding that a formal award pursuant to the provisions of the Solicitors Acts 1954 to 2015, the Legal Services Regulation Act 2015 , or any regulations made thereunder, has not been made;

“client account” shall have the same meaning as prescribed in the Solicitors Accounts Regulations or the meaning prescribed in any statute or statutory instrument amending or replacing the Solicitors Accounts Regulations;

“close of practice guidelines” means the close of practice guidelines to be published by the PII committee from time to time;

“Commercial Property Regulations” means the Solicitors (Professional Practice, Conduct and Discipline — Commercial Property Transactions) Regulations 2010;

“compliant run-off firm” means a firm which is designated as a compliant run-off firm by the SPF manager pursuant to Regulation 10(a) or 10(b);

“compliant run-off firm eligibility criteria” means, in relation to a run-off firm, a run-off firm which:

(i) (a) complies with the close of practice guidelines; and

(b) notifies the SPF manager of its intention to cease practice in accordance with Regulation 9(a); and

(c) sends its most recently completed proposal form to the SPF manager in accordance with Regulation 9(a); and

(d) ceases to practice on the date specified in the written notice of its intention to cease practice provided by the firm to the SPF manager; or

(ii) ceases to practice due to the death of a principal of the firm who was in practice at the time of his or her death or the critical illness of a principal of the firm who was in practice at the time he or she became critically ill; or

(iii) ceases to practice due to the occurrence of matters personal to the sole principal of the firm which, in the opinion of the SPF Manager, did not allow sufficient time for the firm to comply with the criteria listed in (i)(a) to (d) above, including, but not limited to, the appointment of the sole principal of the firm to the judiciary or other public office or the election of the sole principal to public office; or

(iv) ceases to practice due to the suspension or strike-off of the sole principal from practice and:

(a) complies with the close of practice guidelines; and

(b) notifies the SPF manager of its intention to cease practice prior to the end of the indemnity period in which it ceases to practice; and

(c) sends its most recently completed proposal form to the SPF manager prior to the end of the indemnity period in which it ceases to practice; and

(d) ceases to practice on...