Thursday, 9 April 2020

Changes to Payment for 2020/2021 Insurance Arrangements

The Law Society of WA recognises the impact of the COVID-19 Crisis

Taking into account the extraordinary circumstances caused by the COVID-19 crisis, the Council of the Law Society of WA as Trustee of the Law Mutual Fund has agreed a number of measures to relieve the financial pressure on insured practices, help protect jobs in the legal profession and support the continued availability of legal services to members of the community.

1. Deferral of Payment until 16 November 2020

Law Mutual (WA) will offer all practices the option to defer payment of their annual contribution and administration levy to 16 November 2020.

Practices who do not need to defer payment, or who wish to pay by monthly instalments through a premium funder will still be able to do so.  We would encourage all law practices that can pay by 15 May to do so as this will enable us to offer more support to those most needing it.

2. Reapply by 30 September 2020 if numbers have reduced

Although practices will be invoiced based on the information provided in their applications for insurance that were due to be submitted by the end of March 2020, they will be entitled to re-apply by the end of September 2020 based on then current numbers of partners, employed practitioners and general employees. If a practice does so, it will receive an amended invoice, reflecting those numbers. That amended invoice will be due for payment on the 16 November, as outlined above.

Please note that a practice cannot re-apply if it has already paid the original invoice.

3. Repayment of Administration Levy for Law Society members

The Administration Levy of $100/practitioner will be reduced to nil for practitioners who are members of the Law Society on 31 December 2020 and have been a member for the preceding three months (i.e. from 1 October 2020). Practices will be entitled to a repayment of the levies they have paid for qualifying practitioners. The repayment will be made after 1 January 2021.

What will you need to do?

By now, all practices should have submitted applications to be covered by the insurance arrangements for the 2020/2021 insurance year. If you have not done this, we urge you to do it as a matter of urgency.

Most practices that have applied will have already received an invoice. If not, you will be receiving one soon. You do not need to pay this invoice until 16 November 2020. Of course, you can pay before then if you wish to.

If you have not already paid and your practice reduces the number of partners, employed practitioners or general employees from those listed on your original application form, you can resubmit an application form by the 30 September 2020 that lists the reduced numbers (noting all practitioners must be specifically named). Please note that the ‘deeming’ date for the number of general employees will be 1 September 2020.

If you resubmit, an amended invoice will be issued that must be paid by 16 November 2020.

You do not need to do anything in relation to repayment of the administration levy for qualifying practitioners. The Law Society will review memberships after 31 December 2020 and calculate any repayments due. Law Mutual will make those repayments soon thereafter. Do not deduct the amount of any administration levy from payment of your invoice.

Compliance Notices to the Board

The usual practice is that once a practice pays its invoice, Law Mutual provides a compliance notice to the Board to enable the issuing of a practising certificate for all listed practitioners (subject to the practice and practitioners having met all other Board requirements).

The notice is usually provided to the Board within a few days of payment. This will still be the case for practices that make payment of their invoice although Law Mutual cannot guarantee that a notice will be provided by 30 June 2020 if payment is not made by 15 May 2020.

For all practices that have been invoiced but have not paid by 30 June 2020, Law Mutual will be providing compliance notices to the Board in early July 2020. The Board have informed the Law Society that they will not grant or renew a practising certificate until all requirements (including insurance compliance) have been met. However, provided a practitioner has applied for the renewal of a practising certificate within the Board’s required timeframe (the standard renewal period), they will be entitled to continue to practice under their certificate expiring on 30 June 2020.

Please note that if practices do not pay invoices for additional practitioners employed after 30 June until 16 November 2020, it may be the case that Law Mutual is unable to provide a compliance notice to the Board for any additional practitioners until 31 December 2020 (although Law Mutual will endeavour to do it sooner). The effect of this is that a practising certificate cannot be issued before that date (again subject to meeting all other Board requirements).

Contact Law Mutual

If you have any questions regarding this announcement, please contact Law Mutual by email at info@lawmutualwa.com.au. Please do not telephone as Law Mutual will be unlikely to have the capacity to respond due to restrictions as staff are currently working from home.

Yours sincerely

Nicholas van Hattem
President, Law Society of Western Australia

Dudley Stow
Chairman of the Professional Indemnity Insurance Management Committee