Solicitors’ PI brokers list removed as some brokers sold it as ‘Law Society approval’
The Law Society will urge its members to ask their brokers for commission disclosure as part of the trade body’s wider reforms to the solicitors’ professional indemnity insurance market.
The Law Society will include the commission disclosure guidelines in its rewritten broker handbook for law firms. The new handbook will encourage solicitors to get the best value out of their brokers.
A Law Society spokesman said: “There will be tips to ensure that brokers are providing solicitors with a level of service that meets their specific needs, more detail about the different types of intermediaries that are in the market, and consideration of the pros and cons of continuity of service.”
The Law Society will also stop publishing a list of solicitors’ PI brokers on its website and will instead refer its members to the FSA register and Biba’s list of brokers. The decision has angered many solicitors’ PI brokers, many of whom are not members of Biba.
The trade body said it was scrapping the list because some lawyers thought the trade body was vetting the brokers, which was not the case. The Law Society spokesman said: “A small number of brokers have given the impression that their inclusion on the list made them ‘Law Society approved’.”
UIB divisional director Simon Lovat said: “It’s another example of The Law Society coming out with ill thought-out concepts without due consideration to the insurance profession. This only serves to damage the legal industry’s ability to search for those brokers capable of helping them.”
Pass notes: Commission disclosure
What is the current status of commission disclosure in solicitors’ PI?
The FSA requires brokers to disclose commissions if asked, but brokers say the majority of law firms never ask.
What could happen if commission disclosure becomes commonplace?
Some brokers have run projects disclosing commission to gauge law firms’ reactions; many did not agree with brokers’ fees. Some brokers have warned that if commission disclosure increases, brokers will start restructuring fees to appear to be charging less.