The breadth and extent of cover under the Solicitors Regulation Authority (SRA) Minimum Terms and Conditions (MTC) continues to attract attention in many ways. Aggregation, under which multiple claims may be subject to one policy limit, continues to occupy us in several cases where it can mean firms have inadequate cover. There have been many articles on the recent Court of Appeal decision in Baines v Dixon Coles & Gill [2021] EWCA Civ 1211, holding that multiple claims arising from acts of theft from a solicitor’s client account could not be aggregated because they did not arise out of a series of related acts or omissions. A link is on www.legalrisk.co.uk/News.
The judgment of Nugee LJ also touches on, without deciding, the issue of allocation of money following multiple thefts from a mixed account and whether a shortfall should be allocated across all clients, or merely the one in respect of whom the solicitor has made the relevant entry in the firms’ ac-counts (suggesting the latter is less likely).
The extent of cover under the MTC for cyber incidents is under consideration by the SRA with refinements to the provisions expected, but not before many firms renew on 1 October 2021. The SRA intends only to provide clarification, and not to alter the scope of cover or exclusions. Nonetheless, it remains the case that firms should take out separate cyber cover, particularly to provide access to emergency support in the event of an incident.
Many firms are finding insurance market conditions challenging, particularly those who have been involved in investment schemes. Great care needs to be taken when notifying insurers of these, and in any subsequent proposal for renewal. In order to maximise the prospects of them being effective, block notifications require a thorough understanding of insurance law, the policy wording and the probable basis of future claims. We have advised several firms on these issues, and on a large number of substantial coverage disputes.
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