A Legislative Study On Lawyers’ Professional Liability Insurance

With a long history, lawyers’ professional liability insurance is a traditional solutionto effectively dispersing lawyers’ civil liability in western countries, and it is also animportant sign indicating whether the a country’s legal system is well established. Aslawyers’ professional liability insurance has not yet been legally regulated in China, it,on the other hand, lacks the most powerful support, leading to the reality that it cannotbe able to effectively protect the interests of insurance-related parties. Therefore, it isquite necessary to have a further study on the legal construction of lawyers’professional liability insurance in China.In the developed countries, the legislation of lawyers’ professional liabilityinsurance dated back to an earlier time and grew rapidly, and up to date, most of thesecountries have well developed their own legal system of lawyers’ professionalliability insurance. However, the practice of the lawyers’ professional liabilityinsurance in China remains undeveloped, though it is almost twenty years ago whenthe lawyers’ liability was first introduced to China. This is shown by the facts that theinsurance models of different insurance companies are substantially differentiated,that insurance market is not yet fully fostered, and that the insured are absent of riskawareness, etc. All of these are primarily attributable to the following facts. First, thepractice of lawyers’ professional liability insurance in China is not legally regulated,and second, insurance policies are not reasonably tailored, resulting in its inabilityto satisfy the insured’s need for effective and efficient resolution of practice disputesthough the lawyers’ professional liability insurance.The establishment of the legal system of the lawyers’ professional liabilityinsurance has its legitimacy. First of all, it conforms to the value of justice, i.e., it canachieve the distributive justice by identifying the legal rights and obligations of theinsurance parties. Second, it satisfies the value of legal order. It will make up theabsence of relative laws and regulations, and it will also effectively avoid theinsurance market failure and guarantee the lawyers’ professional liability insurancemarket in order. Last but not the least, it is consistent to the value of efficiency.Through the clear division and distribution of rights and obligations among theinsurance parties, it can effectively shield the insurance parties from evadingliabilities, help the insured disperse professional liability, and be favorable for thethird party-victims in getting timely remedy.While the new Insurance Law is on the top of the insurance law hierarchy, the lawof lawyers’ professional liability insurance, as a lower-level law in the hierarchy, will be more operative. On the one hand, it may help promote the uniform application ofthe Insurance Law and other relevant laws. On the other hand, it can ensure thedevelopment of the professional liability insurance and the cultivation of insurancemarket. In addition, it is also in line with international trends and the interests of all ofthe insurance parties. What’s more, with the accumulation of relevant experience athome and abroad, the increasingly improved legislative technique in our country, thepositive attitude of the insured in purchasing professional liability insurance, as wellas the improvement of environment for the practitioners in insurance industry, thelegislation of lawyers’ professional liability turns to be more probable now than ever.The division and distribution of rights and obligations is vital to, and the core of, alegal regulation. But in present China, the rights and obligations of the parties inlawyers’ professional liability insurance are only seen in the policies, not yet beingsystematically codified. This paper aims at the legislative proposal for lawyers’professional liability insurance, focusing on the parties, their rights and theirobligations, and with the expectation that it will be of some benefit for thedevelopment of lawyers’ professional liability insurance in China.