ANALYSIS OF CLAIMS REPORTED – 2012 - 2015 | 1

Professional Indemnity Insurance and Conveyancing ClaimsRICHARD BROWN & JO CRACKNELL

PROFESSIONALINDEMNITY

ANALYSIS OF CLAIMS REPORTED – 2012 - 2015 | 2

Basic Principles of PII

• You Owe Your Clients A Duty of Care• You don’t have to be 100% right, 100% of the time• Test of Negligence – Have you done what a reasonably competent

fellow professional would have done given the same set of circumstances?

• Clear rules and requirements make it harder!• Can you prove it? – Now! and in the Future!

• Claims Made Basis

• Policy in force at the time the claim is made responds

• Notify Circumstances as well as Claims

ANALYSIS OF CLAIMS REPORTED – 2012 - 2015 | 3

Causes of Claims

A significant number of notifications relate to failure to advise and/or advising incorrectly. These are categorised as issues concerning “advice”; they may also fall under “omission”. These types of notifications cover a wide range of matters including:

• the failure to advise on co-ownership issues, in particular the risks involved in not having a declaration of trust in place;

• the failure to ensure restrictions are removed/an undertaking is in place to deal with this;

ANALYSIS OF CLAIMS REPORTED – 2012 - 2015 | 4

Causes of Claims

• the failure to advise clients to check boundaries or identify where there are inconsistencies in the plans (we have had a few claims where the whole of the property being conveyed has not been included in the seller's title and where this ought to have been identified by the purchaser's conveyancer);

• the failure to undertake sufficient searches and/or report on the risks of searches not being done e.g. mining; environmental (e.g. flood risk) – we have seen a few claims concerning the failure to identify and report on the risks of s.106 agreements. We have seen claims where matters in the local authority searches have not been properly addressed e.g. planning issues;

ANALYSIS OF CLAIMS REPORTED – 2012 - 2015 | 5

Causes of Claims

• leasehold properties, concerning the failure to advise on pertinent provisions in a lease e.g. onerous rent review provisions, use, ability to sublet; failure to ensure a purchaser has the benefit of obtaining a lease extension; failure to ensure that a proper retention is in place to ensure the purchaser does not assume an unfair liability in respect of repair works;

• fraud – e.g. inadequate verification of client’s identity;• new properties – failure to obtain NHBC or equivalent

insurance; failure to explain the limitations of e.g. an architect’s certificate.

ANALYSIS OF CLAIMS REPORTED – 2012 - 2015 | 6

Don’t Make Yourself an Easy Target

For• PII Claims• Lenders• Fee Disputes• Increased Premiums

Don’t Make Yourself An Easy Target

ANALYSIS OF CLAIMS REPORTED – 2012 - 2015 | 7

What's Coming At You

• Risk Management

• File Review

• When you’re busy you’re making mistakes!

• Cybercrime

• Thursday afternoon, Friday Morning