Solicitors should always carefully consider their own position, and whether they should decline to act, where:
- they are aware of information that if concealed could amount to dishonesty under the policy;
- a client asks them to falsely witness a document that has already been signed;
- the facts of the underlying matter suggest that criminal conduct could be present in any way.
Lawcover’s professional indemnity insurance policy indemnifies solicitors against civil liability for claims arising from the provision of legal services. While it is rare for Lawcover to decline indemnity, there are occasions in which we cannot extend cover. An important exclusion applies for claims involving dishonesty and fraud. While clause 10 operates to exclude liability in the case of dishonesty or fraud, clause 11 operates to protect innocent partners and directors of a law practice. Clause 13 provides that, where Lawcover makes a payment under the policy that arises from a dishonest or fraudulent act or omission of an insured, Lawcover has the right to recover payment from the individual responsible.
It should come as no surprise that dishonesty and fraud are excluded from cover, as this accords with public policy and is a standard feature of insurance policies. However, solicitors are sometimes unaware of the type of conduct that can be described as dishonest within the meaning of the policy, so it is worth reviewing some areas in which it can apply.