Originally published in the Times Newspaper (Digital Edition) on 29/07/2021
When my firm’s PII fees increased by 220% back in April this year, I needed to find out why this was happening. Obviously, I was not alone. Many firms have faced huge increases in PII without a claim to their name, and further rises are anticipated for next year.
If PII costs are allowed to escalate unchecked, I believe it will devastate the UK’s legal sector.
It will lead to only the largest of firms being able to afford the insurance, resulting in less choice, higher costs for consumers who can afford to bear the increases, and many more consumers not getting professional help as they simply can’t afford the high hourly rates. Smaller firms will close, taking with them a massive amount of experience. The other option is for firms to go down the unregulated route, leaving consumers without valuable and necessary protections.
Don’t get me wrong. I am not against unregulated. We were one of the first law firms in England & Wales to offer services on both a regulated and unregulated basis. However, I believe the regulated side of my business provides vital safeguards that I am keen to keep, mainly for private individuals.
The bottom line is that the UK needs to retain a strong and competitive legal market that is accessible to everyone, and we are heading in the wrong direction. This is not a time to wait for the hardened insurance market to balance itself out.
In my quest to discover the cause of the PII inflation, I approached as many of the key stakeholders in the legal sector as I could find. This included industry representatives of both legal and insurance providers as well as the regulators. I also spoke to those who represent the interests of the consumers of legal services.
The culmination of this research led to a virtual roundtable event attended by all these leading players. I was heartened by everyone’s willingness to take part in an open discussion. However, what was evident from the debate is that PII has vexed this group and others for too many years. The most recent attempt to make changes was by The Law Society in 2018 but all their proposals were rejected.
Whilst there was general agreement that changes were needed, each stakeholder was limited by their vested interest to protect their industry, their members, and their constituents. Without comprehensive economic analysis, it was felt that any comprehensive changes or even the smallest of tweaks to PII requirements are likely to have detrimental knock-on effects to other areas.
What is clear is that PII in the legal sector is a hugely complicated beast. That is why no one industry representative, no single industry regulator or powerful consumer group can do it alone. It can only be achieved through collaboration. It needs everyone’s combined desire to drive through what feels like the impossible. I am confident that together there is a solution to the PII dilemma that answers everyone’s issues and concerns, and we will continue to drive for change and a reduction in premiums for the good of both the profession and the legal consumer.
360 Law Group is recognised by The Times as a top 200 UK Law firm in 2020 and 2021.