Undertaking C: Conflict of Interest Loading
As in previous years, the professional indemnity insurance premium is subject to a “Conflict of Interest” loading to be payable by a Law Practice unless a written undertaking is given by a principal on the firm’s behalf. Each principal should carefully read the undertaking below.
I undertake on my behalf and on behalf of all members of the law practice that no person indemnified under the Certificate of Insurance will, in the 12 months commencing 1 July 2022:
- act in any transaction, or in any series of transactions related to each other, for any two or more parties who are opposite parties in any such transaction, or
- provide to the lender named in any instrument securing or guaranteeing repayment of a loan, a certificate that the terms and effect of the instrument have been explained to the borrower and/or guarantor.
For the purposes of this undertaking “opposite parties” includes:
- vendor and purchaser pursuant to a contract of sale of land, or transferor and transferee of land, for value at arm’s length
- vendor and purchaser of a business at arm’s length
- lessor and lessee pursuant to a lease or agreement for lease
- financier and borrower in connection with a loan of money or agreement to lend
- purchaser of land and lender of money, or provider of finance, to be secured by mortgage
Provided always that nothing in this undertaking will prevent a member of the Law Practice from acting for:
- two or more executors of a deceased estate (provided their interests are the same)
- two or more trustees of a trust together (provided their interests are the same)
- persons who are married or engaged in a significant relationship together, in the sale or purchase of any property, giving or discharge of any mortgage, or lease or agreement for lease of any property
- clients making mutual wills
IMPORTANT: The submission of your firm renewal application will constitute the giving of this undertaking if applicable.