Legal Cost Specialists

Professional indemnity insurance for costs draftsmen

I recently had to renew our professional indemnity insurance.  Our brokers sent us a very lengthy document from our insurers even though we were just looking to renew our policy.

Amongst the various questions asked was: “What does the Proposer think are the more significant potential risks associated with their field of work”.

I completed this section with, what I thought was, the rather obvious: “Providing negligent legal advice”.  I did not consider this to be an admission of a risk particular to our firm but simply a recognition of the self-evident main risk any lawyer faces on a day-to-day basis (at least if you do not handle client money); although missing deadlines is perhaps another one.

I was therefore somewhat surprised when our broker returned to us to say the insurer had queried what legal advice we gave as they thought our business was that of costs draftsmen.

Even if you turned the clock back 20 years, where much of the day-to-day work of old-school costs draftsmen was counting letters and estimating how many would be recoverable, the latter task still amounted to legal advice just as much as a solicitor advising a client what damages they might expect to recover in a personal injury claim.

However, for most of the past 20 years a costs draftsman’s job has involved advising on such issues as compliance with the rules and regulations concerning conditional fee agreements, DAB regulations, consumer credit regulations, relief from sanctions applications, etc.

Am I right to be concerned that our insurer is providing professional indemnity insurance for a category of business when they do not seem to know the nature of the work undertaken by such businesses?  And, if that is so, how do they set their premiums?

2 thoughts on “Professional indemnity insurance for costs draftsmen”

  1. Hope they don’t increase your premium (or mine). Maybe you should have written,“Providing negligent costs advice”.

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