Are insurance companies deliberately driving black and ethnic minority law firms out of business?

A study by The Law Society last month found that black and ethnic minority firms were being treated differently to white firms by insurance companies and charged higher rates which leads to this uncomfortable question, was this a deliberate tactic by insurance companies to drive black and minority ethnic law firms out of business?

Black and minority ethnic (BME) lawyers have complained that they are being racially discriminated against by insurance companies in the legal profession prompting an inquiry by the The Law Society.

Dele Ogun, a partner at Akin & Law LLP told the Guardian (Hirsh: 6 June) that his insurance jumped from £6,000 to £24,000 this year despite not having a single claim.

Laitan Eyiowuawi, a partner at Crowther solicitors in the City of London was established in 2007 and have had no complaints and no claims, yet not a single insurance company would give a quote.

In a study by The Law Society last month it was found that BME ethnic firms were being treated differently to white firms by insurance companies.

Sixteen percent of  BME firms were not covered by their previous insurer compared to just 6 percent of white firms and BME firms were informed of insurer’s decisions much later making it much harder for them to look for insurance elsewhere.

BME lawyers are more likely to practise in areas such as immigration and crime which means many of their clients are most likely from BME backgrounds, if these firms are no longer able to offer a service because of rising costs their clients will be forced to be represented by white lawyers.

Eyiowuawi told the Guardian, “The starting point for a lot of BME firms is that we don’t generate as much fees as white firms, so any major increase in overheads can bring us out of business.”

Eyiowuawi added, “If we go out of business, then there is also an access to justice question – many of our clients want to instruct people who look like them but it is becoming harder and harder for minority firms to operate.”

While The Law Society has said that it is committed to getting to the roots of this problem one simple question renders any inquiry or investigation into this matter pointless. There is no reason for insurance companies to treat BME law firms differently or charge those firms at a higher rate so what is The Law Society looking for? The only factor which figures in the differential treatment of BME law firms is race and the next logical question The Law Society must ask is why insurance companies discriminated against these firms to the point that it could drive them out of business?

The only conclusion that the Law Society can draw from the evidence is that insurance companies were attempting to drive BME law firms out of business which would make this matter a serious case of institutional racism.

The legal system has been proven time and time again to be institutionally racist, in August 2008 a review by former chairman of the Commission for Racial Equality, Lord Herman Ouseley, said that black solicitors in the UK are overrepresented in areas of regulatory activity.

The Solicitors Regulation Authority (SRA) is responsible for ensuring that all solicitors meet the highest standards when representing the public, however a review by Lord Ouseley has found that black and minority ethnic (BME) solicitors are overrepresented in the areas of regulatory activity by the SRA.

The review found that a disproportionate number of BME solicitors were referred to disciplinary trials, and a high number of BME student applicants are referred for character or sustainability assessments.

The review said that the disproportionate levels in which the SRA target BME solicitors could not only be interpreted as discrimination, but also justifies charges of institutional racism. (London Evening Standard: 14 August 2008)

Coincidentally enough The Law Society say that they will work closely with the SRA and insurance companies to get to the root of why BME law firms are being discriminated against. However, in light of the evidence presented which clearly reveals the racial discrimination of both the SRA and insurance firms there is little hope of an objective outcome.

The actions of these insurance companies if it had gone undetected would have driven BME law firms out of business, you have to ask yourself was that their intentions? Their actions also provokes deep and disturbing questions about racism in Britain. If insurance companies are doing this against BME law firms there could be other racist actions being taken against other BME businesses and services that we are yet to be aware of. It is a scary prospect and one, that in light of these revelations should be taken very seriously by BME communities.

For further research:

http://www.guardian.co.uk/law/2010/jun/06/black-minority-lawyers-race-row

http://www.thisislondon.co.uk/standard/article-23532346-racism-concerns-over-legal-watchdog.do


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