Indian law firms start taking professional indemnity insurance
There are no recorded cases of a former client suing his or her lawyer in India, but larger law firms across the country have started taking malpractice insurance cover for tens of millions of dollars, following mild pressure from foreign clients. comments powered by Disqus
Akshay Chudasama, Mumbai-based partner and executive committee member at J. Sagar Associates, said that just six year agi it was “very much the exception” for any clients to ask whether Indian law firms had liability insurance. “I think the trend of large multinational clients asking for it more and more has happened over the last two or three years.”
“Not every client asks for it, but some clients ask for it,” explains Mohit Saraf, senior partner at Luthra and Luthra.
Chudasama added: “Normal engagement letters of most firms have clauses in here that pretty much restrict the liability for professional negligence in respect of the fees (received by the firm), so (companies are) getting more and more aggressive on those clauses and more and more you get asked about the amount of insurance cover that you have."
Mohit Saraf says that typical cover for a law firmwould be somewhere between 5% and 25% of the topline revenue of the law firm. India’s largest law firms have an estimated revenue of Rs250-500 crore.