The Ombudsman on the liability insurance of lawyers

Press Release:

The Ombudsman on the liability insurance of lawyers

According to the Constitutional Court[1] compulsory liability insurance, the payment of the liability insurance fees and the maintenance of the liability insurance legal relationship have the purpose to serve the financial security of lawyers and their clients; in the absence of a liability insurance legal relationship covering all members of the bar association public trust could be shattered if claims for possible damages against individual lawyers could not be settled for lack of funds.

According to the Court the continuity of the liability insurance legal relationship guarantees on a permanent basis the financial background of trust between lawyers and their clients, as well as the ability of lawyers to compensate for the damages caused by their harmful behaviour.   

The report has established that the present legal regulation of liability insurance for lawyers is not in compliance with the relevant fundamental rights. It infringes the requirement of legal certainty, which constitutes an immanent part of the notion of the democratic state under the rule of law, if such a public body (professional association) receives authorisation to determine the (professional) conditions of liability insurance of lawyers the members of which are at the same time also members of the association organised for providing (professional) liability insurance for lawyers, and this association, as it can be established with certainty, is in a dominant position in this field.

Consequently, the enforcement of the right to due process cannot be ensured neither for lawyers and lawyers' offices obliged to take out liability insurance, nor for clients who may suffer damages.

Therefore the Commissioner for Fundamental Rights, pursuant to Section 37 of Act CXI of 2011 on the Commissioner for Fundamental Rights, has requested the Minister for Public Administration and Justice to revise, on the basis of the points mentioned in the report, the entire legal regulation on the (professional) liability insurance of lawyers and to draw up in consultation with the professional organisations and public bodies such amendments which would exclude the improprieties related to fundamental rights mentioned in the report and would enforce the requirement of legal certainty through accurate, adequate and consistent regulation.

19 /09/ 2012