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The NSW Parliament’s inquiry into potential competition reforms for solicitors’ professional indemnity insurance deserves close attention from the profession, writes Angelique Nesbitt.
The issue is not whether compulsory insurance should be weakened. It should not. Strong minimum cover, reliable claims handling and continuity for clients must remain central.
The real question is whether the current effective sole-provider model remains necessary, proportionate, and supported by current evidence, or whether carefully managed competition could preserve consumer protection while improving transparency, accountability, and choice.
Why this issue matters
Professional indemnity insurance is a condition of private legal practice and a central consumer protection measure. When the settings are right, they support confidence in the profession, continuity of cover and appropriate protection for clients. When the settings are not regularly tested, they can affect practice costs, the viability of small and regional firms, innovation in the market, and, ultimately, the cost and availability of legal help for individuals, small businesses, and community organisations.
What managed competition could mean
Managed competition does not mean deregulation. It means allowing additional providers only if they meet strict minimum standards, including policy terms, prudential requirements, claims handling, run-off arrangements, data reporting, and consumer protection safeguards.
A staged approach could allow competition to be tested carefully against objective measures such as premium movement, availability of cover, claims handling performance, insurer solvency, reinsurance arrangements, consumer protection outcomes, and the effect on small, sole practitioner and regional firms.
Why the profession should make submissions
Good submissions do not need to be lengthy. They can identify what is working well, what should be preserved, where the current arrangements create practical pressure, whether approval criteria and premium settings are sufficiently transparent, and whether reform could improve competition without weakening consumer protection.
If the current model remains the best way to protect clients and maintain stability, that should be demonstrated by clear and current evidence. If a better model can preserve consumer protection while improving choice, transparency, and accountability, it deserves careful consideration.
Solicitors with practical experience of the current arrangements should make submissions. The committee will be best assisted by evidence about cost, availability of cover, transparency, claims handling, regional and small firm impacts, and the safeguards needed to preserve strong consumer protection.
Angelique Nesbitt is the principal of Augmena.
