PII: proposals for direct access barristers to reveal PII cover

We remind barristers of their professional indemnity insurance obligations - and the regulator’s proposals to make direct access barristers more transparent with their clients.

The Bar Council’s Direct Access Portal (DAP) has recently revealed an increase in members of the public and small businesses who are contacting barristers directly for legal help. The DAP says that between 1 July 2016 and 1 July 2017, the public searched for a barrister almost 150,000 times on the DAP (in the second quarter of this year, there were 3,600 searches for family law barristers by the public).

Furthermore, the Bar Council says many public access barristers are seeing repeat instructions from organisations, businesses and the general public, reflecting the potential efficiencies for clients to be had from bypassing solicitors.

PII proposals
All barristers must have professional indemnity insurance for the protection of consumers’ interests and to protect their own interests. With the surge in popularity of direct access barristers, the regulator is now consulting on whether to make direct access barristers reveal to clients their PII cover.

First, a reminder of the minimum requirements for PII laid down by the regulator. The regulator requires all self-employed barristers in England and Wales to take out PII with Bar Mutual. All self-employed barristers renew their professional indemnity insurance with Bar Mutual on 1 April each year.

Bar Mutual provides a minimum cover of £500,000 up to a maximum of £2,500,000. It is the barrister’s responsibility to ensure they have adequate insurance (taking into account the nature of their practice) which covers all the legal services they supply to the public)

The BSB Handbook also makes clear that barristers must not mislead, or cause or permit to be misled, their clients about the extent to which they are covered by insurance against professional negligence claims.

Public access
Under Rule C125 of the BSB handbook, once barristers have accepted public access instructions, they must notify their public access clients in writing, in clear and readily understandable terms, of a number of particulars. This includes ‘the fact that you are self-employed, are not a member of a firm and do not take on any arranging role’.

Now, the regulator is currently consulting on whether to replace its existing requirement for barristers of less than three years standing to maintain a public access log, with a more ‘effective’ means of seeking client feedback. Importantly, it is also proposing requiring barristers to disclose the level of PII they have to public access clients. The proposals are in line with the continuing drive towards an outcomes focused, risks based regulatory regime.

Whilst the BSB makes clear there is no evidence of widespread under-insurance by public access barristers, it says that the CMA says (in its review of the legal services sector) consumers should be able to expect legal services providers to disclose the level of professional indemnity insurance they hold.

The consultation therefore proposes amending the public access rules so that they are in line with the more outcomes-focused approach of the rest of the BSB Handbook. The aim of the proposed changes would be to assure lay clients (in the absence of professional clients such as solicitors) that public access barristers have adequate insurance which covers all the legal services they are supplying.

Malcolm Cree, Chief Executive of the Bar Council, said: “Traditionally, a member of the public or a small business owner would go to a solicitor with their legal problem and the solicitor would turn to a barrister when needed for their expertise and advocacy skills. That remains the way most barristers work today, but several thousand barristers are now trained to take work directly from the client.

“The Direct Access Portal statistics indicate this approach is gaining traction with the public and members of the profession. Potentially, by going directly to a barrister a client could save money because they don’t have to pay a solicitor as well. Barristers are predominantly self-employed and therefore have lower overheads and may cost less. There will be many cases where the barrister cannot take on the work and will refer it to solicitors. However, direct access does provide an alternative way for the public to access legal services rather than via the traditional route.”

The BSB’s proposals are, therefore, not surprising given the drive for transparency in the legal sector, as well as across the corporate and commercial sectors.

All members of the bar will welcome any proposals to enhance consumer protection, particularly given the recent fraud conviction of Michael Cremin, who posed as a barrister and whose ‘credentials’ were listed on the website of a genuine chambers. Had he been obliged to disclose PII cover, could his fraud have been avoided?

Barristers can see the full consultation document here. Note that the Consultation closes on 26 September 2017.

 

 

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