Proctor : September 2016
It remains a live issue that practitioners are being asked by financiers to provide certifications or warranties regarding the subject matter of (usually) property or commercial transactions. Many of the requested certifications go beyond what a practitioner could say from within his or her own knowledge, for example, certifying that a trust was validly established when that is not within the practitioner’s knowledge or providing an absolute statement that contracts are binding and enforceable. The profession is being increasingly asked to certify matters that are inappropriate and beyond their knowledge, frequently in terms that have no qualifications. Practitioners should be vigilant to only certify matters that are within their own knowledge, retain evidence of the basis for so certifying and caveat the certification appropriately. While this is always good practice, from an insurance perspective failing to do so could potentially activate exclusions within the policy, which would be an undesirable outcome. The Third Party Certificate LastCheck available at our website identifies a number of key concepts to manage. Off-the-plan contracts While the number of conveyancing claims have diminished in recent times, should another property crash occur we would expect to see disgruntled purchasers seeking to exit property deals. This risk is magnified for practitioners acting for sellers in the case of ‘off-the-plan’ contracts which will often have long settlement times and may be the subject of replicated errors. Following the GFC these replicated errors resulted in several multi-million dollar claims impacting practices throughout the state. In late 2013 Lexon rolled out a further free in-practice workshop program to target this specific risk area. Project Stress Test (as it is known) targets sellers’ transactional property work and involves the review of sample contracts followed by a practical, ‘hands-on’ roundtable discussion with authors working in relevant areas. The program seeks to highlight the top possible failure points and allows Lexon to play devil’s advocate to help practices identify and manage any gaps. This initiative represents another partnership Lexon has formed with the profession and has been extremely well received. Please contact Robert Mackay at firstname.lastname@example.org if you are interested in being involved. Solicitor’s certificates September hot topics Lexon Insurance Pte Ltd ARBN 098 964 740 Incorporated in Singapore Registration No: 200104171C • Lexon has long been recognised as a leading innovator in risk management strategies. Flowing from that, we are honoured to now be partnering with a regional insurance scheme in an advisory role as they roll out their own enhanced risk program. The Lexon side of the project is being led by David Durham, the 2015 Risk Management Institution of Australasia Risk Manager of the Year, and we have no doubt that there will be some valuable learnings for us during the process which can be applied back in Queensland. • For the 2016/17 insurance year, QLS Council arranged with Lexon to make top-up insurance available to QLS members who sought the additional comfort of professional indemnity cover beyond the existing $2 million per claim provided to all insured practitioners. Practitioners had the choice of increasing cover under the Lexon policy to either $5 million or $10 million per claim. There was significant interest in Lexon’s offering and more than 90 practices signed up in the first year. This was beyond our expectations and realised a goal of making affordable top-up cover available to all practices in Queensland. • Lexon has in place a sophisticated reinsurance program with highly rated international reinsurers who deal with professional indemnity insurers throughout the world. Feedback from our most recent presentations to those reinsurers in April 2016 included that Lexon’s “risk and claims management are second to none” and that we have the “best managed risk program [they] have seen”. Did you know? Lexon Insurance Pte Ltd is a wholly owned subsidiary of Queensland Law Society.