This is especially significant due to the heavy involvement of British law firms in Shariah finance…
An investigation by the Lawyers Secular Society has revealed law firms providing advice on ‘Sharia Law’ risk breaching their insurance and potentially their license to practise.
All law firms in Britain must be registered with the Solicitors Regulation Authority and have professional indemnity insurance for all their activities or else they are not allowed to work in the industry.
When applying for insurance, a firm must declare all the activities it provides advice on, be it conveyancing, criminal law or contracts. This ensures that the company – and its clients – will be covered by the insurance policy for its activities. But if the company omits advising on Sharia Law, then those activities will not be covered and they could be jeopardising their very status as a legitimate law firm.
It has significant financial consequences for firms and their professional staff and, in particular, compliance officers should a client sue a firm for negligent advice. Anyone advising on Sharia law but not covered by insurance means the law firm is unlikely to be able to meet the costs of that claim without the financial protection that insurance brings.