SOME Irish solicitors may not be able to practice next year because of difficulties obtaining insurance.

Solicitors with close ties to developers are in the most trouble in what the Law Society of Ireland described as a "potential crisis".

There are fears the situation could echo that of the UK where 500 firms have been left without insurance coverage this month, around 4.5% of the 11,000 companies practising there.

Ireland has around 2,200 firms which require insurance to represent clients.

With a deadline fast approaching for new premiums to be put in place here, insurance companies have yet to offer new rates, which are expected to at least double in cost.

Indemnity insurance coverage is required by law to protect solicitors in the event they are sued for negligence.

However, those firms that have a bad claims record over the last year and those whose dealings are closely linked to the collapsed construction industry may not secure further coverage.

The council of the Law Society of Ireland held an unprecedented meeting last August during which it was agreed to lower the level of required cover from €2.5m to €1.5m in a bid to attract continued coverage.

"This has been seen as a potential crisis," said Ken Murphy, director general of the Law Society. "Certainly there is a deep concern about the availability and likely cost of providing indemnity insurance for solicitors. There is an anticipation that rates will increase greatly next year but they could be double or more. But ultimately the insurers have not decided whether they will be offering premiums for next year, or at what cost."

Much of the problem stems from the insurance sector. Companies use the money paid by clients to invest in stocks which have suffered badly during the recession.

"The society has been monitoring this development since the beginning of the year and we have expert advice from the top broker adviser in London," said Murphy.