Walton, Alastair --- "Indemnity Insurance & Practicing Certificates" [1986] AboriginalLawB 51; (1986) 1(22) Aboriginal Law Bulletin 6

• Indemnity Insurance &Amp; Practicing Certificates

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Indemnity Insurance & Practicing Certificates

by Alastair Walton

Recently in Sydney representatives from over twenty community legal centres (CLC's) and the Aboriginal Legal Service (ALS) met to consider the problems of professional indemnity insurance (see [1986] AboriginalLB 43; 1(21)pg4, 'Professional Indemnity Insurance') and attempts by the Law Society of NSW to impose restrictions on practising certificates above those guidelines in the Lawyer's Practising Act, that are issued to solicitors working for CLC's or the ALS' s.

In summary the Law Society seems intent on unnecessarily restricting and interfering in the operations of both the CLC's and the ALS, and seemingly not understanding the ALS and CLC role in legal service delivery.

Examples of the proposed restrictions are:

1(b) Employ one or more solicitors full or part-time who are holders of unqualified practising certificates, to supervise and control the work done;

2(v) That the centre confirms it will not undertake work for persons or associations who are able to afford the proper and usual fees;

2(vii) The Law Society of New South Wales be given the option to review the continuing operation of the centre at the end of each 12 months.

In responding to these impositions the following remarks have been made by representatives of the ALS and the CLC's:

'1(b)' As all the CLC and ALS solicitors work for corporations all their certificates are conditional. This clause neglects present and past conventions where the ALS's have had principal solicitors with restrictions on their certificates approved by the Law Society to act as Principal solicitors of an ALS.

'2(v)' This condition is unacceptable and a restraint. It only shows that the Law Society does not understand the CLC's or the practice of the ALS It shows a lack of comprehension of why the ALS exists and its relationship with the Aboriginal communities. The CLC's and the ALS reserve the right to act according to their own guidelines: as an indication of their i independence.

'2(vii)' The representatives of the CLC's and the NSW ALS considered this clause to be outrageous. It was seen as unnecessary and unacceptable as the solicitors are bound by the Lawyer's Practicing Act and subject to the ordinary discipline of the Act. The Law Society has absolutely no power whatsoever over the Centres themselves while their power over certificates is questionable. It is an attack on the independence of the CLC's and the ALS and Aboriginal self-determination.

These restrictions have been circulated by the Rulings Committee of the Law Society and are the possible result of the increasing number of Centre's seeking exemption from the Law Society's rule that to be a practicing solicitor, you need to be insured with a scheme approved by the Law Society. The exemption is sought so a more comprehensive insurance for corporations and one that covers the non-legal workers in the services can be obtained.

However there are alternative views to why the law Society is imposing these restrictions. It could be political or the response of the private profession's concern about the expansion of salaried legal services.

Nationally CLC's and the Aboriginal Legal Service pay over $100,000 in Professional Indemnity Insurance (PI). The high premiums are blamed on the fact insurers reinsure overseas and because with the exception of Victoria (see [1986] AboriginalLB 43; 1(21)pg4) all the CLC's and the ALS's insure individually. North American PI claims have pushed up premiums. Thus in an international financial system high premiums in the USA affect the rates of the whole international scene.

After several meetings between the Commonwealth Attorney-General Department, the Aboriginal Legal Service. the Insurance Industry, the CLC's, the Department of Finance with the Department of Aboriginal Affairs, the Attorney-General has asked for tenders from the Insurance Industry to prepare a report considering three possibilities:

i) Bulk buying insurance for all services;

ii) Create a fund for self insurance for small claims combined with taking out disaster insurance claims above the small claim level;

iii) A government Indemnity for most claims with additional top up for private cover for major claims.

The A LS and the CLC's are pressing for a total indemnity though the government is resisting.

In addition the Commonwealth would like to centralise the policing of any scheme, despite the proven ability of the service to be self-regulating as exemplified by the Victorian Services, who have done so successfully for a long time.

Negotiations are continuing in relation to the national PI schemes and the matter of imposed restrictions in NSW by the Law Society. They will be reported in the next issue of the AboriginalLB.