Solicitors PI insurers accused of ethnic discrimination

The ABI has hit back at accusations from The Law Society that professional indemnity (PI) insurers are deliberately discriminating against ethnic minority solicitors.

The Law Society is having “urgent discussions” with the ABI, the latest taking place on Tuesday, “about the ways in which BME [black minority ethnic] solicitors appear to have been disadvantaged during the 2009 renewal round with a view to erasing that disadvantage this year.”

In the future, its sister body, the Solicitors Regulation Authority (SRA), may request information from insurers on how they are complying with equality legislation.

But ABI director-general Nick Starling dismissed the accusations, stressing that premium increases in recent years had been driven by factors such as small practices being vulnerable to fraud, rather than ethnic origin.

Starling said: “We would strongly rebut this. It’s a very serious charge, which needs to be backed up with evidence, and none has been forthcoming.”

The Law Society bases its evidence on a survey of solicitors released earlier this year, which found that insurers took 56 days from application to notification of renewal for ethnic minority solicitors, compared with 44 days for the wider profession.

Furthermore, around 16% of ethnic minority firms were refused cover, compared with just 6% for the wider profession.

The Law Society has already drawn a line in the sand by resisting insurer pressure to scrap the assigned risk pool for this year, a last-ditch place where solicitors without cover by the October deadline must be offered a policy.

An SRA spokesman said: “We understand there are concerns about potential difficulties experienced by BME firms and are looking at this as part of a root-and-branch review of financial protection that is underway and as part of our statutory duty to promote equality and diversity.”

But both insurers and brokers stress that pricing is largely based around factors such as claims experience.

One senior insurance executive said: “That’s just laughable. It’s simply not the case. Solicitors’ PI is treated no different to any other class of business.”