4 Situations When Professional Liability Insurance Helps Lawyers

Lawyers or solicitors deal with high-profile cases which are prone to risk. They might commit an act of error or omission while discharging their professional duties. In addition, their client may incur loss or damages due to their negligence. There are several situations when professional indemnity insurance helps lawyers. Therefore, lawyers must subscribe to professional liability insurance in order to avoid legal actions.

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Situation When Professional Indemnity Insurance Helps Lawyers

A Bihar-based lawyer sued Lord Rama under the act of cruelty for abandoning his wife, Devi Sita. However, the apex court rejected the plea of the attorney. Later, several other lawyers sued him for hurting the religious sentiments.

Therefore, the lawyer may also face legal issues for their activities. Hence, they must subscribe to lawyers professional indemnity insurance.

Let us discuss the situation when professional indemnity insurance helps lawyers.

  1. Act of Negligence

    A complainant aggrieved by the conduct or negligence of an advocate may sue or file a complaint against him under the CPC (Code of Civil Procedure). The complainant may file the complaint either in Hindi or English or any other regional language.

    In addition, the complainant is required to pay a prescribed fee according to the IBC (Indian Bar Council) rules. It is one of the situations when professional indemnity insurance helps lawyers.

    Manjit Kaur v Deol Bus Service Ltd, Justice S.S. Sodhi held that an attorney owns a duty of care towards his client. Further, the interests of the party or client should not be hurt by the error or omission of the attorney.

    If a lawyer by his action or omission causes the interest of his client or the party who engaged him in the case, the attorney does so at his own peril. Therefore, he shall be subject to the cases if filed by his client for causing his/her interest.

  2. Breach of Confidentiality

    A lawyer while arguing a case may make an error or omission and divulge the confidential information of the client which may cause him severe damage. The court may impose a penalty for breach of confidentiality by the lawyer.

    Such an act takes place when a lawyer discloses confidential information which he was expected to hide. For example, while approaching a solicitor, a client is expected to divulge confidential information to the attorney in order to win the case. However, the solicitor may fail to do so and face the institution of a lawsuit by the client.

    Nevertheless, it has some exceptions. According to legal confidentiality, a lawyer is required to keep the facts confidential to protect the interest of the client. However, if the lawyer has substantial means to believe that:

    • The client may kill someone
    • Cause a bodily injury or loss to the interest of another person, and
    • He may use the attorney's services to commit such crime of fraud

    The lawyer at his discretion may disclose the same before the court. However, he has no obligation to do so.

  3. Administrative Errors

    An attorney might be sued for losing papers or documents or for causing other administrative errors. It is one of the situations when professional indemnity insurance helps lawyers. Therefore, the lawyer must subscribe to professional insurance.

  4. Defamation

    In Munithaymma and Another v Muddobalappa, the court pronounced that a member of the Bar in India does not possess any absolute privilege against his liability. He shall be subject to the defamation case for the remarks or words spoken or written by him while discharging his professional duty.

    However, the court may presume that he must have acted in a good faith. Hence, the court may not take cognizance of the complaint made against the advocate for his remarks. Nevertheless, there shall be no immunity for the remarks made outside the court. Therefore, it is a situation when professional indemnity insurance helps lawyers.

Conclusion

An individual may find several situations when professional indemnity insurance helps lawyers. It may cause them heavy losses or damages. Therefore, a lawyer must subscribe lawyer professional indemnity insurance.

Written By: PolicyBazaar - Updated: 24 August 2023
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