CONTRIBUTION SYSTEM FOR LAWYERS' COMPULSORY PROFESSIONAL LIABILITY INSURANCE

Abstract

In many Commonwealth jurisdictions, lawyers are required to pay contributions to fund compulsory professional liability insurance (CPLI) schemes. As the number and severity of claims against lawyers increase the size of each lawyer's contribution increases. Many lawyers are concerned about whether the system used to calculate the amount of their contribution is, given the level of risk in their legal practices, a fair one. A survey of the legal profession in several Commonwealth jurisdictions reveals two systems for calculating CPLI contributions. The most common, the fixed-rate contribution system, is administratively simple but unfair to lawyers involved in low-risk practice. The variable-rate contribution system is arguably more fair, but administratively complex. The purpose of this article is to review these systems and to suggest ways for designing a contribution system that is both administratively simple and fair to all lawyers.