Friday, 3 June 2022

If you are considering changing the structure or ownership of your practice or joining or merging with another practice, you should consider the definition of “Predecessor of the Legal Practice” in the Definitions section (clause 17) of the Certificate of Insurance (Schedule 1 to the Master Policy) and the impact that may have on a continuing legal practice. The definition is set out below.

“Predecessor of the Legal Practice means any Legal Practice that the Law Society determines to be a predecessor of the Legal Practice.

In so determining, the Law Society may take into account any circumstances it reasonably considers relevant, including whether the Legal Practice, at the relevant time:

1. holds itself out as the successor of, or as incorporating, the predecessor practice;
2. employs, or has as Partners, all or a majority of the Partners of the predecessor practice immediately prior to the predecessor practice ceasing to carry on business;
3. employs all or a majority of the Practitioners employed by the predecessor practice immediately prior to the predecessor practice ceasing to carry on business;
4. employs, or has as a Partner, a Practitioner who was the subject of an outstanding Claim against the predecessor practice immediately prior to the predecessor practice ceasing to carry on business;
5. uses the name or a name which incorporates all or part of the name used by the predecessor practice;
6. carries on business from the same premises as the predecessor practice carried on business immediately prior to the predecessor practice ceasing to carry on business;
7. acquired the goodwill, assets, or a majority of client files of the predecessor practice;
8. assumed the liabilities of the predecessor practice.

The Law Society’s determination is final and binding.”

Importantly, a Predecessor of the Legal Practice, as determined by the Law Society, and any Partner or employee of it, will be an Insured under the Certificate of Insurance in place at the time a Claimant makes a claim (or circumstances are notified). This means a claim made under the Certificate of Insurance by a Legal Practice arising from work carried out by a Predecessor will be a claim on that Certificate of Insurance (not a previous Certificate of Insurance issued to the Predecessor). Accordingly, all the provisions that apply to an Insured in respect of a claim, including calculation of any Claims Loading or Insured’s Contribution (excess), will apply to a claim arising from the Predecessor’s work.

Some examples of the possible application of these provisions follow:

1. A claims free practice merges with a practice that has been the subject of two recent claims. As a result, the merged practice may attract a claims loading in the next insurance year depending on the calculated loss ratio.
    
2. A practice acquires the business of another practice. Subsequently, a claim arises from work previously carried out by the other practice. The insured’s contribution of the acquiring practice will apply to the claim and the claim will be included in any calculation of claims loading (if other qualifying claims have been or are made).

So, for example, if the acquiring practice’s GFI is between $5,000,000 and $6,000,000, the claim will attract an Insured’s contribution of $25,000 even if the other practice’s GFI was less than $5,000,000 (see clause 11.2 of the Certificate of Insurance).

If you have any queries regarding this issue, please call Law Mutual on (08) 9481 3111 or email us at info@lawmutualwa.com.au

Phishing is a way cyber criminals trick you into giving them personal information. They send you fraudulent emails or text messages often pretending to be from large organisations you know or trust. They may try and steal your online banking logins, credit card details or passwords.

Phishing can result in the loss of information, money or identity theft.  

Spear-phishing is when these emails and text messages are highly targeted to the recipient.

Spotting phishing attempts can be harder than you think.  The Australian Cyber security Centre (ACSC) has developed a quick quiz to assist in identifying phishing emails you may receive to your personal or work emails.

 Take the quiz now and share with your colleagues to see how you do.

Client Engagement under Uniform Law Including Costs Disclosure

Law Mutual panel solicitor Sean Popperwell, Director Popperwell & Co will present two webinars in June with Dale Wescombe, Manager Dispute Resolution, and Anthony Hevron, Senior Resolution Officer from the Legal Practice Board to introduce practitioners to a generic template Client Engagement (‘retainer’) Agreement created to assist practitioners to manage the client engagement process and meet their statutory obligations under Uniform Law. 

The webinar will focus on the client engagement process addressing:

1. Client identification, client capacity and securing a valid retainer;
2. The client’s objective, the scope of the retainer and a practitioner’s obligations when accepting instructions;
3. Establishing the lines of communication;
4. Discharging the practitioner’s costs disclosure obligations.

For more information or to register to attend click here.

The webinar is free for Law Mutual insured practitioners and qualities for 1 Hour of Law Mutual (WA) approved Risk Management Training.

We are currently in the process of finalising the full Risk Management Programme for 2022/2023; further details will be released in July. 

Every insured practitioner is entitled to two hours of low-cost seminars.

In addition, your firm may be entitled to a Risk Management Discount on its next insurance application if it meets the principal and practitioner attendance requirements, in the period 1 March 2022 to 28 February 2023.

This year, 334 firms received the 5% discount on the Annual Contribution and enjoyed discounts ranging from $14 to many thousands of dollars.

To qualify for a Risk Management Discount on their 2023/2024 Annual Contribution, practices must ensure that all the Partners or Practitioner Directors and at least 80% of the employed Practitioners of the Law Practice have attended at least two (2) hours of Law Mutual (WA) approved risk management training during the period 1 March 2022 to 28 February 2023.

Unfortunately, several practices missed out on the Risk Management Discount this year for various reasons:

1. Partners or Practitioner Directors, and Practitioners failed to attend two hours of risk management training during the qualifying period.  Many attended one hour of training but failed to complete the second.
    
2. Practitioners failed to apply for prior approval of their attendance at the College of Law Legal Practice Management Course, to count towards their risk management training.
    
3. Law Practices failed to ensure that newly employed practitioners attended two hours of risk management training during the qualifying period.
    
4. Practitioners returning from leave failed to attend two hours of risk management training.  Practitioners are still required to attend two hours of risk management training in the qualifying period even if their CPD point requirement has been reduced.
    
5. Law Practices failed to reassess their eligibility for the Risk Management Discount after an employed practitioner had ceased employment.  Some practices tried to ensure that 80% of employed Practitioners attending training. However, when the Risk Management Discount was calculated during the renewal, the Law Practice fell short of the requirement as one of the qualifying Practitioners had ceased employment.  The remaining 20% of Practitioner had not attended the required training.

For example, 4 out of 5 employed practitioners had attended training so that the practice apparently 'qualified' as it reached the 80% level. However, one of the 'trained' practitioners ceased employment in the qualifying period. This means the calculation was based on 3 out of 4 practitioners i.e., 75% and the practice did not receive the discount.

To ensure that your practice qualifies for the Risk Management Discount on the 2023/2024 Annual Contribution, we recommend that all Partners or Practitioner Directors, and employed Practitioners at your practice attend two hours of risk management training during the qualifying period 1 March 2022 to 28 February 2023.

Further information regarding the Risk Management Discount requirements and the options available for approved risk management training can be found on the Law Mutual (WA) website.

Law Mutual (WA) is committed to assisting insured firms to manage professional liability risks through practical, tailored and interactive training.

We may be able to arrange an in-house workshop for your firm, depending on the number of practitioners in your firm (minimum 15 attendees required), where we focus on risks that are of most concern to your practice.

It is important to conduct the in-house seminar early enough in the insurance year, to ensure that there is time for any practitioners that have unfortunately missed the in-house seminar, to fill the risk management training gaps by utilising the remainder of our face-to-face Risk Management seminar programme before the 28 February 2023 deadline, if your practice is intending on applying for the Risk Management Discount.

To arrange an In-House Risk Management Seminar for your practice, please contact a member of the Law Mutual Team via email risk@lawmutualwa.com.au.

Insureds are reminded that they should notify Law Mutual of facts that might give rise to a claim, even if they think that a claim would be unreasonable, baseless or ultimately likely to fail. That is because every possible claim needs to be recognised, whether it is a good claim or not. This will allow the Insured and Law Mutual to further investigate the possible claim if thought necessary.

The pertinent question to ask yourself when making a decision whether to notify is, “Might a claim be made at some point because of what has occurred?”

There is no penalty in notifying facts that might give rise to a claim. This should be done as soon as reasonably practicable.

We suggest that managers of Law Practices consider whether there is a need to obtain PI top up insurance. This is not offered by Law Mutual (WA); we suggest you contact your insurance advisor.

Managers might also like to consider joining the Law Society of WA’s Professional Standards Scheme which may enable the Law Practice to limit its liability in the event of a claim. If you are interested, please contact Vicki Coles, Manager Risk Law Mutual (WA) on (08) 9324 8653 or via email at vcoles@lawmutualwa.com.au