Solicitors PI: Access To Documents Seized By The Law Society Following Intervention

Solicitors PI insurers are not entitled to blanket access to documents seized by the Law Society following an intervention in the practice of a firm.

Claims were made under a PI policy relating to a two-partner firm, South Bank Solicitors. Insurers alleged that large sums of money in client account had been paid away dishonestly by one partner, a Mr Onobrakpeya. He was a conveyancer, whilst the second partner, a Mr Ikoku, specialised in immigration. The Law Society had intervened in the practice and insurers applied for access to all documents seized by it so that they could see whether there was evidence that Mr Ikoku had been involved in or condoned any of the dishonest actions alleged against Mr Onobrakpeya. The application went beyond access to files where there were claims and extended to files where there were no existing claims and where there were issues of client confidentiality.

The PI insurer's application was dismissed and the Judge (Peter Smith) made the following key findings and observations:

the fact that a solicitor is obliged under the Solicitors Act 1974 to maintain PI insurance does not mean that the insurers are automatically entitled to access to clients' confidential or privileged documents; the Law Society's primary concern must be to protect the interests of the solicitor's (innocent) former clients. In this case the insurer's application was seeking to override the privilege of all clients of the firm for its own particular purposes; the judge characterised the application to a "fishing expedition", by which the insurers hoped they might find material that would implicate Mr Ikoku of dishonest conduct. An assertion by the insurer that 'he must have known what was going on' was predicated upon a false assumption of dishonesty on the part of every partner in a small firm. Comment

Lender claims against solicitors are increasing and are likely to continue to rise as the banks crystallise losses accrued over the years of easy credit. Small conveyancing firms are frequently a target of such claims and the...