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After pressure from lobby groups at the commercial Bar, DAC Beachcroft has amended its contractual arrangements with its preferred sets of chambers to reinstate a key contract clause that gives barristers insurance cover.

The clause in question falls under the Commercial Bar (Combar)/City of London Law Society rules, which detail the standard terms of work under which members of chambers will accept instructions. In 2013, the firm moved to delete clause 12.4 from its working contracts with chambers, which had the effect of removing the insurance liability cap for barristers.

Three years later the issue has now come to a head. An email seen by Legal Business was circulated by the Institute of Barristers’ Clerks (IBC) chair Nicholas Hill to members on Monday (11 July). The email said: ‘it has been drawn to our attention by a number of chambers that DAC has issued a new version of their terms which is causing concern.’

The firm’s terms were described as ‘unattractive for many reasons,’ in particular, the fact the liability clause was deleted. That clause said liability is limited to the sum stated in an agreement. However if no such sum is stated, the limit of that liability is £100,000, the highest limit of cover provided to barristers by the Bar Mutual Indemnity Fund.

The IBC email warned that the removal of limitation of liability meant that ‘any barrister entering into the DAC terms will have no insurance cover in relation to any claim arising solely under contract. Any barrister considering entering into the terms should do so with great care.’

The email added that Bar Mutual had this week raised the matter with a lawyer at DAC ‘so that [the firm] should be aware of the issues to which their terms give rise.’

The IBC has since had contact via email yesterday morning (13 July) from DAC which said: ‘In response to our proposed amendments, it has been brought to our attention that the deletion of the liability provision in clause 12.4 cannot be agreed owing to Bar indemnity insurance restrictions. Although the deletion of clause 12.4 was agreed to by a number of chambers in 2013 without issue, we have discussed the matter internally and agreed to reinstate clause 12.4.’

A spokesperson for DAC added: ‘This is purely a commercial negotiation about risk and the clause in question is the same as that contained in the previous terms to which chambers agreed in 2013. The firm has already expressed to those who have asked directly its willingness and readiness to amend this clause.’

Hills said: ‘There have been firms in previous years who take Combar terms and insert clauses of their own. It’s been an issue since their inception in 2013. It is up to law firms to alert sets to what they have done and its entirely up to the chambers as to whether they accept it or not.’

‘If a law firm is your largest work provider, you can find yourself in an unenviable position where you’re almost obliged to take the work under their terms or lose it entirely… it’s very unattractive.’

Stephenson Harwood disputes partner Tony Woodcock, not referencing DAC but speaking on the issue of deleted liability clauses, said: ‘I have never come across that before. We are here absolutely on top of what the rules say, and are square with counsel and chambers we deal with. I can only judge from our experience – it’s clear we have our own insurance cover. With firms and barristers, in my experience with changes there’s lots of consultation…but usually there’s a compromise, and it gets thrashed out.’

sarah.downey@legalease.co.uk