Propell Specialised Finance v Attorneys Insurance Indemnity Fund NPC

Propell Specialised Finance (the appellant) was the cessionary of claims and rights allegedly held by Buurman Stemela Lubbe Incorporated, a firm of attorneys. Propell had paid various sums of money into the firm’s trust account. Those funds were subsequently misappropriated while entrusted to the law firm. At the relevant time, the firm was insured under a professional indemnity policy issued by the Attorneys Insurance Indemnity Fund NPC (the respondent), covering legal liability arising from the conduct of the profession. Relying on a purported cession of rights under the insurance policy, Propell sued the respondent in the Western Cape Division of the High Court for indemnification of the misappropriated funds. The High Court dismissed the claim, and Propell appealed to the Supreme Court of Appeal.

The appeal was dismissed with costs, and the judgment of the Western Cape Division of the High Court was upheld.

The case clarifies South African law on the non-cessionability of rights under professional indemnity insurance policies for legal practitioners. It confirms that such rights are personal to the insured and cannot be transferred to third parties, reinforcing the special nature of professional indemnity insurance within the legal profession.