The Law Society is to warn law firms against the potentially illegal practice of self-insuring through 'ghost policies' or 'speccing', after the issue was raised by Insurance Times (News, 24 February).

The trade organisation called the practice of ghosting or buying cut-price after-the-event (ATE) policies in the understanding that no claim would be made, a "potential nightmare". It is also warning against speccing, or self-insuring by law firms.

A Law Society spokesman said: "These practices certainly have regulatory ramifications and could have legal ramifications."

The Law Society statement went on to say that the regulatory body was "urgently considering what regulatory action may be necessary".

' Allianz Cornhill Legal Protection has reported a surge in the take-up of before-the-event legal expenses policies on home insurance business.

While penetration of legal expenses policies on the Cornhill Direct motor book has remained almost static at over 90%, home business has increased to more than 60%.