ABC Insurance has failed in its attempt to avoid paying the Law Society of NSW’s legal costs in a high-profile battle over professional indemnity insurance (PII) for solicitors, with the state’s top court dismissing the company’s application in blunt terms.
In a judgment delivered on Friday, the NSW Court of Appeal rejected ABC Insurance’s arguments that the Law Society should not recover its costs from last year’s joint hearing, which settled key questions about whether solicitors can hold practising certificates without an Attorney General–approved insurance policy.
Read more: ABC intends to transform PI market
The dispute began when ABC Insurance sought to distribute its own professional indemnity policy to NSW solicitors for the 2024–25 practising year. The Law Society, which oversees practising certificate renewals, challenged the move, arguing that the Legal Profession Uniform Law requires solicitors to have coverage under a policy approved by the state’s Attorney General.
Last August, the Court of Appeal sided with the Attorney General and, in the alternative, the Law Society, finding the Society could not grant practising certificates to lawyers without such approved cover. That ruling left ABC Insurance’s proposed policy out of play for the renewal period and saddled the company with the Law Society’s legal bill.
In its latest bid, ABC Insurance argued the Law Society had acted in a neutral, regulatory capacity rather than as a true litigation opponent; that the Society’s legal arguments had not actually carried the day; and that much of the work concerned a secondary issue — the compliance of ABC’s policy — which was never decided.
The court was not persuaded. Chief Justice Andrew Bell and Chief Judge at Common Law Robert Harrison said costs issues should ordinarily be dealt with during the hearing, unless “special circumstances” exist, such as late disclosure of settlement offers or highly complex permutations of possible outcomes.
“This case does not fall within any of those categories,” the judges said, noting that ABC had filed extensive submissions and participated fully in the adversarial proceedings in pursuit of its commercial interests.
The court dismissed the application and ordered ABC Insurance to pay the Law Society’s costs of the failed costs challenge.
The ruling cements the Court of Appeal’s 2024 finding that, provided at least one Attorney General–approved professional indemnity policy exists, solicitors cannot be granted practising certificates without coverage under such a policy — a decision with implications for competition in the niche but lucrative legal insurance market.
Explained: How professional indemnity insurance works for NSW solicitors — and the size of the market at stake
When a solicitor in New South Wales renews their practising certificate each year, they must show they are covered by professional indemnity insurance (PII) — a safeguard designed to protect both lawyers and their clients if things go wrong.
But unlike most insurance markets, solicitors in NSW cannot simply shop around for a better deal. The state’s Legal Profession Uniform Law (LPUL) and its companion legislation require that any PII policy for local solicitors must be approved by the NSW Attorney General.
In practice, there’s only one game in town: LawCover, a specialised mutual insurer owned by the Law Society of NSW and the NSW Bar Association. LawCover provides cover to virtually all of the state’s private practice solicitors, with terms and premiums set in consultation with the Law Society and approved by the Attorney General under section 95 of the Legal Profession Uniform Law Application Act 2014.
LawCover’s policy is tailored to meet minimum standards set by the Legal Profession Uniform General Rules — covering civil liability claims, defence costs, and other risks inherent to legal practice. Because the system requires Attorney General approval of any policy, no other insurer has successfully broken into the NSW solicitor PII market in decades.
The uniform law aims to ensure every practising solicitor is insured to a high and consistent standard, and that claims are handled by a body familiar with the legal profession’s unique risks. It also helps maintain stability in pricing, because premiums are spread across a large, captive customer base.
Critics, however, say the arrangement functions as a monopoly that shuts out competition and potentially inflates premiums. Supporters counter that mutual ownership keeps profits within the profession and that LawCover’s claims management record is strong.
The NSW solicitor PII market is sizeable — and lucrative.
According to the Law Society’s 2024 annual report, there are more than 38,000 solicitors holding practising certificates in NSW.
While rates vary depending on firm size and risk profile, a typical small-firm premium can range from $2,000–$6,000 annually, with large firms paying far more
Even at a conservative average premium of $4,000 per solicitor, the annual premium pool would exceed $150 million, much of it effectively guaranteed to LawCover under the current approval system.
For commercial insurers like ABC Insurance, gaining access to even a portion of this market is attractive. It represents a stable, regulated customer base with compulsory purchase requirements and low churn — the kind of insurance segment that’s rare in other industries.
However, as recent litigation has underscored, breaking into the market requires not only meeting the uniform law’s minimum coverage standards but also persuading the Attorney General to approve the product — a hurdle no private entrant has yet cleared.
