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E-mailAN unknown number of solicitor firms are thought to be operating illegally without insurance cover following an unprecedented overrun on the deadline for renewing premiums.
The Law Society of Ireland has described the situation as "completely unacceptable" and said it would pursue any company identified as doing so.
Insurance cover for the country's 2,200 law firms ran out on 1 December, and while the majority are now thought to have renewed premiums for 2010, the number of those without insurance remains unclear.
The deadline by which the insurance industry must inform the Law Society of what companies have been offered renewed premiums and who has taken them up is 15 December.
There is some confusion, however, as to how many firms are operating in the two-week interim without appropriate coverage in the event of a malpractice suit.
"We suspect there are [firms operating without insurance] but we don't know for sure," Ken Murphy, director general of the society, told the Sunday Tribune.
"We are going on the basis of what brokers are telling us.
"It may well be, for example, that firms have an offer of insurance but they think it's too high and they are applying for a new one. Certainly firms shouldn't be operating without insurance.
"If a claim is made against them and they don't have insurance, the firm's assets and those of the partners in the firm are at risk."
It is the first time in Ireland that offers of premium renewals and acceptances have not been put in place by the 1 December deadline.
It will be at least another week until the Law Society has concrete information on the position of its members.
One of the reasons for the delay is that insurance companies are awaiting the positions of their own insurers, all of whom have been hit hard by global economic conditions.
"The insurance market has been running very late this year and we are told that it will continue to operate yet," said Murphy.
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The situation is indeed 'completely unacceptable' that solicitors are left uninsured and it would be easy to have a go at the Law Society but the Insurers are the ones who hold all the cards.
Unable to deliver that last minute reprieve and then talking of going after solicitors left uninsured for these two weeks seems a bit unfair.
There was some confusion as to whether the cover had been extended or not and I would not be surprised if this is the first some solicitors have heard that they are uninsured.
Walking into the four courts last week I witnessed more than one zombie solicitor roaming the halls in a state of shock unable to accept that these were the last days of their careers.
I especially liked the idea that firms had been offered insurance 'but they think it's too high' as if they were surly teenagers. There is no 'thinking' about it; we are going out of business.
An increase in premiums of just over 2800% will do that for you. Have the Insurance companies been looking to Zimbabwe for inspiration?
I know of another firm as well who are in trouble, with five solicitors to be covered the premium has leapt from around €30,000 last year to an eye watering, €240,000 this year. Looks like some of them will be joining me on the dole queue.
These solicitors are not operating uninsured because they are haggling to get a good deal from the insurers, like everyone else they are finding it hard to get bank loans.
Having to secure bank loans to cover your insurance premium is not sustainable and people are hoping against hope that things will return to normal next year.
During a recession it’s always nice to see everyone share the pain and it brings a warming glow when professionals are brought low as well.
I know the public will have little sympathy for solicitors, but spare a thought for those of us who work for them and are facing into Christmas with 100% wage reductions and indefinite unpaid leave.
The last thing the economy needs is more empty office space, unemployed cleaners, secretaries, office staff, accountants and less than sprightly office juniors like myself turning up to sign on.
The other real losers are the clients whose properties won’t be registered anytime soon, those whose cases will temporarily enter limbo or will find themselves turning up alone at court in January expecting to meet their solicitor as the Law Society scrambles to sort out the workload left behind.
A workload of an as of yet undetermined size until we find out who can afford their insurance.
In addition businesses that survive will be letting staff go but keeping the workload and the quality of service to clients will inevitably suffer.