Solicitors (Scotland) Act 1980

44 Professional indemnity.S

(1)The Council may make rules with the concurrence of the Lord President concerning indemnity for solicitors and former solicitors [F1and incorporated practices] against any class of professional liability, and the rules may for the purpose of providing such indemnity do all or any of the following things, namely—

(a)authorise or require the Society to establish and maintain a fund or funds;

(b)authorise or require the Society to take out and maintain insurance with [F2an authorised insurer];

(c)require solicitors or any specified class of solicitors [F1and incorporated practices or any specified class thereof] to take out and maintain insurance with [F2an authorised insurer].

(2)The Society shall have power, without prejudice to any of its other powers, to carry into effect any arrangements which it considers necessary or expedient for the purpose of the rules.

(3)Without prejudice to the generality of subsections (1) and (2) rules made under this section—

(a)may specify the terms and conditions on which indemnity is to be available, and any circumstances in which the right to it is to be excluded or modified;

(b)may provide for the management, administration and protection of any fund maintained by virtue of subsection (1)(a) and require solicitors or any class of solicitors [F3and incorporated practices or any class of incorporated practices] to make payments to any such fund;

(c)may require solicitors or any class of solicitors [F3and incorporated practices or any class of incorporated practices] to make payments by way of premium on any insurance policy maintained by the Society by virtue of subsection (1)(b);

(d)may prescribe the conditions which an insurance policy must satisfy for the purpose of subsection (1)(c);

(e)may authorise the Society to determine the amount of any payments required by the rules subject to such limits, or in accordance with such provisions, as may be prescribed by the rules;

(f)may specify circumstances in which, where a solicitor [F3or incorporated practice] for whom indemnity is provided has failed to comply with the rules, proceedings in respect of sums paid by way of indemnity in connection with a matter in relation to which he [F3or, as the case may be, it] has failed to comply may be taken against him [F3or, as the case may be, it] by the Society or by insurers;

(g)may specify circumstances in which solicitors [F3and incorporated practices] are exempt from the rules;

(h)may empower the Council to take such steps as they consider necessary or expedient to ascertain whether or not the rules are being complied with; and

(i)may contain incidental, procedural or supplementary provisions.

(4)Failure to comply with rules made under this section may be treated as professional misconduct for the purposes of Part IV, and any person may make a complaint in respect of that failure to the Discipline Tribunal.

(5)In this section [F4“authorised insurer” means a person who—

(a)is permitted under the Insurance Companies Act 1982 to carry on insurance business of class 13 in Schedule 2 to that Act or, being an insurance company the head office of which is in a member State, is permitted under the law of a member State other than the United Kingdom to carry on insurance business of a corresponding class; or

(b)is permitted under the Insurance Companies Act 1982 to carry on insurance business of classes 1, 2, 14, 15, 16 and 17 in that Schedule or, being an insurance company the head office of which is in a member State, is permitted under the law of a member State other than the United Kingdom to carry on insurance business of corresponding classes;]