Legal services claims trends in 2023

Property notifications

• Property-related notifications continue to be the main contributor in number, and often severity. These notifications are consistent with long-term trends and economic conditions.
• Firms are increasingly aware of these risks and are taking proactive measures to mitigate them. This includes careful onboarding, utilising case management tools, close supervision, and specialisation within departments.
• In the realm of landlord and tenant work, in both commercial and residential settings, preparing and responding to notices remains a critical challenge.
• Firms are employing risk reduction strategies, including transferring technical notice work to litigation colleagues, due to the precision required in identifying parties and adhering to timelines.

Impact of the Building Safety Act

• The Building Safety Act has been a prominent topic of discussion at this renewal.
• The Law Society issued a detailed note in July, offering further insights. For more information on what you need to know, you can refer to the Law Society's note here^[1].
• Insurers closely scrutinised how firms responded to the challenges posed during the October renewals and we anticipate this will continue to be on the radar for the April renewals. Firms who have identified associated risks and have well-thought-out mitigation strategies in place will garner underwriter confidence.
• The consensus is that specialists are essential for undertaking and supervising this work.

Employee inappropriate behaviour claims

• Despite efforts by firms to curb inappropriate behaviour, allegations, including those of sexual misconduct, continue to surface.
• These allegations have serious personal and regulatory implications for individuals and pose risks for firms.
• Securing coverage for costs incurred during regulatory investigations remains a challenge.
• Continued vigilance and proactive measures that educate and promote an inclusive culture appear key. The SRA updated their guidance on workplace environment in May and have provided clear expectations for both firms and individuals. Workplace environment: risks of failing to protect and support colleagues

Presentation of claims

• A successful claims profile at renewal hinges on proactive year-round management, close collaboration with insurers, and regular claim reviews.
• It's crucial to consider all acquired practices, especially when successor practice liabilities are assumed, as they impact the firm's claims profile.
• Interpreting insurers' claim summaries requires caution, as they often present data differently.
• Co-insurance of the primary layer has increased in recent years, emphasising the importance of proactive financial data management.
• Collaborating with co-insurers to create a combined claims summary can be beneficial.
• The primary focus is on presenting an accurate claims summary that reflects costs to insurers.
• Firms should provide detailed information about significant claims, demonstrating that lessons have been learned from past experiences.