PII – equality issues

In the light of the 2009 PII renewal round and difficulties reported by black and minority ethnic (BME) solicitors, the Law Society has been implementing the action plan set out below. Case studies were submitted to the Association of British Insurers (ABI) from BME solicitors who believe that decisions about their 2009 PII renewal were made on grounds related to their race.

The ABI has now submitted a response to the Society's research carried out in 2009 into the PII renewal round and a separate response on the case studies.
Read the ABI's response (PDF, 288kb) to the Society's research (PDF, 89kb).
Please note: the response on the individual case studies cannot be published because solicitors firms are identified.

We are considering the ABI's response in close collaboration with members of the Law Society's BME Forum, made up of the groups representing BME solicitors and the SRA. We remain in close contact with the Equality and Human Rights Commission who are advising us on possible courses of action.

We will keep you updated as the situation develops.

PII helpline

To help during the 2010 renewal process, the Society is again running a helpline, which opened on the 16 August. The number is 0207 320 9545. The helpline will be able to offer advice and information on any problems being experienced and suggest alternative insurers for those who are turned down or faced with an unacceptably high quote.

Case studies

We will also be collecting information from solicitors who believe that they have been treated unfairly on grounds of their race, age or gender or any other reason that is irrelevant to their firm's risk profile. If you believe that you have been affected, you can complete this questionnaire (WORD, 86kb) which will help us to understand your situation and how best to help you.

General advice

The Society has been providing general advice and tips on preparing for PII renewal.
Read our advice

The key points for every solicitor to remember are:

  • get your proposal in as soon as possible
  • ensure that the proposal form is fully completed – answer all the questions as fully as you can
  • ensure that your proposal is accurate – discrepancies can give the impression of heightened risk

PII action plan - review of progress

Key step 1

Asking solicitors to send us information about their experience of the PII renewal round if they believe they have been discriminated against in some way.

Action

Illustrative case studies have been collected. Case studies have been passed to the Association of British Insurers (ABI) who in turn are working with the named insures to investigate the circumstances. A report on the outcome of the investigations and a response to the issues raised by the renewal research report has been received. All case studies have been passed to the Equality and Human Rights Commission (EHRC).

Key Step 2

Urgent discussions with the Association of British Insurers (ABI) about the ways in which BME solicitors appear to have been disadvantaged during the 2009 renewal round with a view to erasing that disadvantage this year.

Action

A number of meetings have taken place and correspondence between the ABI and the Law Society has been successful in securing investigative action from the ABI with its members. Working with chairs of the minority lawyers groups, SRA, the Law Society and the ABI, agreement has been reached on the following:

  • The Law Society policy team are liaising with the ABI to produce a briefing for distribution to solicitors setting out the ABI's high level prognosis for the PII insurance market in 2010.
  • The ABI will work with the broker representative groups on timelines and transparency in their communications with clients and to raise awareness of the issues identified and steps being taken.
  • The Law Society will report to the ABI during the renewal process any trends emerging from calls to the PII helpline.
  • The Law Society and the SRA will pass on any issues raised about individual cases during the PII renewal to the relevant qualifying insurer.
  • We will ensure that communications are timely and that there are regular updates on activities.

Key step 3

Seek the formal advice of the EHRC further to very helpful informal discussions.

Action

Copies of the PII renewal process report and the case studies have been provided to the EHRC. We are keeping them up to date on the progress being made to address concerns with the ABI and ensure that the 2010 renewal process is fair and transparent. The EHRC will review whether or not to take action dependent on the outcome of our work to ensure the 2010 renewal process is free of any potential to unlawfully discriminate.

Key step 4

Review the way that insurers assess risk.

Action

Legal advice had been sought and passed on to the ABI. It specifically highlights areas of the underwriting criteria which may result in discrimination.

The main points in brief are:

  • Turnover - BME firms tend to have smaller turnovers than non-BME firms. Therefore, differential treatment by insurers in terms of level of premium or availability of insurance cover at all will be prima facie indirect discrimination. That means that insurers will need to show an objective justification for the differential requirement they apply in respect of turnover.
  • Name - Differential treatment by insurers based on whether the applicant firm has a foreign-sounding name will be direct discrimination. The same will apply if such treatment is based on the ethnic make-up of the members of firm. Direct discrimination can never be justified. This will be a clear case of discrimination.
  • Geographical location - BME firms tend to have a greater presence in probably the same geographical areas as the communities they serve. Therefore, differential treatment by insurers in terms of level of premium or availability of insurance cover at all will be prima facie indirect discrimination. That means that insurers will need to show an objective justification for the differential requirement they apply in respect of postcode areas or other geographical locations.
  • Type of work - BME firms tend to specialise more in certain types of work, for example, immigration. Therefore, differential treatment by insurers in terms of level of premium or availability of insurance cover at all will be prima facie indirect discrimination. That means that insurers will need to have an objective justification for the differential requirement they apply in respect of different types of work.
  • Size of firm - A greater proportion of BME firms are smaller in size. Therefore, differential treatment by insurers in terms of level of premium or availability of insurance cover at all will be prima facie indirect discrimination. That means that insurers will need to have an objective justification for the differential requirement they apply in respect of postcode areas or other geographical locations.

Key step 5

Discussing with the SRA steps it can take with Qualifying Insurers (QIs) to eradicate discrimination.

Action

The SRA has advised the QIs of the addition of an equality rider to the Qualified Insurers Agreement. The purpose of the rider is to ensure that they are in a position to satisfy them that the arrangements for facilitating solicitors gaining professional indemnity insurance is free from discrimination and will promote equality and good race relations.

We will be monitoring the 2010 renewal process carefully through the PII helpline and raise concerns with insurers while the process is ongoing. We will publish the next steps in the action plan shortly.