PII cover for solicitors working abroad

Are there fee earners in your firm who want to work permanently from their home office abroad? What is the PII position?

The pandemic has demonstrated that remote working is a viable option for the legal profession and some individuals are keen to continue working remotely on a full-time basis. If a fee earner is working from home in England and Wales, then under the Minimum Terms and Conditions (MTCs) for primary PII insurance, cover will apply in the same way it would if they were working in the office. But what about a fee earner who has relocated to another country and wants to continue working from home abroad? Are there any issues? This is a question we have been asked on more than one occasion in the last few months.

What is the position under the MTCs?

The basic starting point is that the MTCs provide cover for work that is undertaken from an office in England and Wales. This point is somewhat “buried” within the SRA glossary[1] that defines certain words used in the MTCs. Here is the trail that takes us to this position:

The next question is, what does “carried on from one or more offices in England and Wales” actually mean? If an individual needs to go abroad to attend to matters on a file (eg briefing witnesses or a mediation), or is responding to emails during a holiday abroad, then that would be covered but is that still the case where an individual decides they want to work abroad on a more permanent basis?

What is the situation where fee earners have chosen to work permanently from home abroad?

The position where a fee earner has decided that their full-time place of work is a home office outside England and Wales, is not quite so clear.

One would hope that a common sense approach would be taken and an individual would be considered within scope of cover when “working from home abroad”, if they are a principal or employee of a practice located in England or Wales and working on files where the engagement is between the office in England or Wales and the client. However, we cannot rule out the potential for insurers to take the point and there will inevitably be cases in a “grey area” that result in policy disputes. For that reason, if you do have any fee earners who are working consistently or permanently from a home office that is abroad, it would be wise for you to consider what action you need to take.  

What steps should your firm take?

Firstly, it would be wise to begin by specifically asking us to note this with PII insurers and request them to confirm cover, subject to usual policy terms and conditions. We also recommend you review whether the same approach is needed with regard to any other policies you have, such as office or cyber.

Insurers will want to be satisfied that appropriate arrangements are in place for issues such as supervision, document storage, confidentiality and cyber security. It would therefore be prudent to ensure that arrangements to address these issues are well-documented, and that you include the relevant details when raising the matter with insurers. 

It would also be prudent for firms to mandate that any individual working from a home office abroad should not give out their foreign address as being an office of the firm, or solicit local clients by virtue of their foreign address. All postal communications relating to matters they are dealing with should also continue to be sent to your office in England or Wales, which should also be the case for those working from home in England and Wales. 

To discuss anything covered in this article or to speak to one of our team about your professional indemnity insurance renewal, please get in touch. 

[1] www.sra.org.uk/solicitors/standards-regulations/glossary/