Profit and Loss Insurance for Legal Opinion, Here’s the Advocate Response

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In the Indonesian advocate code of ethics, every lawyer is prohibited from guaranteeing to his client that the case he is handling will win. Included in case handling is the role of advocates in providing legal opinion in carrying out their profession. It could be said, even from the advocates could have missed.

However, in the same code of ethics, it is also stated that advocates are not allowed to provide information that can mislead clients regarding the cases they are handling. If it turns out that a mistake makes the client suffer a loss, it is still a matter of debate whether it is included in the “misleading” category or not.

Reading this opportunity, insurance companies issue insurance products for professional services including legal services

One that we have discovered is an insurance policy that helps protect professionals from legal action by clients or other third parties. The question is, is it necessary for a law firm to insure that it is safe from a lawsuit from a client who feels “misled” to the point of experiencing a loss?

Luhut M.P. Pangaribuan, a senior advocate as well as an academic at FH UI, who has handled various corporate cases in Indonesia, thinks that this insurance is not needed by lawyers. “The opinion is not binding in nature, it must be followed up with a decision, it does not need to be guaranteed,” he told.

Luhut assessed that the principle is not binding for the client so that there is no risk for advocates as service providers. As long as advocates have mobilized their best in accordance with applicable legal procedures until finally producing recommendations for clients, it is not appropriate for advocates to be blamed because the client thinks what is given is not accurate.

“Unless there is something else other than just giving an opinion, or there is lies in it,” continued Luhut.

In the event that the data used by the advocate to convince the client is fake so that it misses, Luhut calls it a fraud. This deception is beyond the reach of the code of ethics and can be sued for pure crime or a suit for default.

“If it causes losses due to trickery, of course you can,” he said

Even so, Luhut acknowledged that the need for insurance for advocate legal services arose because of the fact that there were parties trying to sue the advocate profession. In such a context, he understands that eventually an insurance product develops that welcomes market opportunities.

Kukuh Komandoko Hadiwidjojo, an advocate who also practices as a capital market legal consultant, considers the need for the use of insurance at this time. “Actually, not only with regard to profession, everything that the profession does should be covered by insurance,” he told.

In professional practice, continued Kukuh, advocates are full of risks

Although an advocate will definitely do what is best for the client, it is not necessarily able to protect against all possible losses. “It is possible to cause losses, including,” he continued.

He gave an example that an advocate could neglect the making. In the case of losses incurred in connection with a large value transaction by a client, of course, advocates can be dragged into responsibility. The impact, Kukuh said, would be higher for advocates because the insurance premium cost component was also charged. “Advocates feel more comfortable in doing their job,” he added.

One of the names of insurance that is known by lawyers to lawyers in Australia is (PII). This insurance is not only used for legal services, but also for other professions such as doctors and accountants. Especially for advocates, this type of insurance is only reserved for.

In Indonesia, there is one insurance company that sells similar insurance products. This policy provides the main protection in the form of compensation for losses resulting from civil liability claims from clients or other third parties. Other protections can be adjusted by the buyer of the policy, such as security costs of defense, guarantees of attendance fees in investigations, guarantees for slander and unintentional defamation.

A number of law firms in Indonesia have faced a lawsuit case. Some of the reasons for the lawsuit were because the client was not satisfied with the legal opinions given by the lawyers’ offices.