Exposure to the open marketplace is definitely not on the agenda for a Law Council of Australia committee seeking greater freedom of choice in compulsory professional indemnity (PI) cover.

PI insurance committee chairman Ron Heinrich says uniform national standards are on the way, and the next logical step is to give national law firms more choice about where they obtain their first layer of insurance.

He says his preferred approach would be self-auditing, in which national firms could choose from the range of state-based monopolies associated with law councils – without the need for regulatory approval as long as the cover complies with set standards.

The shape of things to come will depend ultimately on the national regulatory framework that emerges from the current Council of Australian Governments taskforce.

But Mr Heinrich says Australian lawyers are keen to avoid a situation like that in Britain where PI cover is bought on the open market.

Caught in the grip of a hard market, some small UK law firms are reportedly being squeezed out of business because they cannot obtain cover.

“We’ve also got the example of history in this country,” Mr Heinrich told insuranceNEWS.com.au.

“The state schemes all came into being about the same time in the 1980s because insurance for solicitors was compulsory in most states yet they could not obtain insurance from the general market.”