SRA launches discussion paper on future of SIF

SRA launches discussion paper on future of SIF

As part of its ongoing work to consider next steps on the Solicitors Indemnity Fund (SIF) and consumer protection for negligence claims brought more than six years after a firm has closed, the Solicitors Regulation authority (SRA) has published a discussion paper on the options.

The new paper explains how further research and engagement has borne out concerns – raised during previous consultation – that while the number of consumers potentially impacted by historic negligence cases is small, the impact upon them can be significant.

It also outlines options being explored for potentially providing future consumer protection in a way that is more cost-effective and proportionate than the SIF in its current form, which has been extended to September 2023.

Finally, the paper invites feedback on some specific issues in relation to any potential future arrangements. These include the approach to claimant costs and claims from large corporate entities.

The SRA is inviting feedback on the issues discussed in the paper by 31st August. It will also be discussing the issues raised directly with key stakeholders, including consumer and legal profession representative groups. All feedback received will help to inform the SRA Board’s further considerations of what next steps to take at its September meeting. It will then hold a consultation as necessary on any next steps.

Anna Bradley, Chair of the SRA Board, said that their work on the fund has “helped us to better understand what consumer protection for negligence claims brought more than six years after a firm has closed can offer some users of legal services”. He added that “we have also been looking at how best to maintain that protection in a cost-effective and proportionate way, if we decide that’s the right thing to do”.

On the latest discussion paper, he said:

“Our discussion paper sets out our latest thinking. It’s an important next step as we continue to explore any potential options ahead of further discussion in autumn, so I urge all those with an interest to respond to the paper and let us know what you think.”

Law Society president I. Stephanie Boyce welcomed the SRA taking the next step of looking at consumer protection within legal services. She said:

“The SRA has also recognised that consumers could face serious detriment if post six-year claims are left unaddressed.

People go to solicitors for support and advice during significant events in their lives – the death or injury of a loved one, family breakdown, a house purchase or estate planning.

They do so rightly confident that solicitors are highly qualified and regulated. Consumers trust their solicitor is adequately and appropriately insured, and that they will be compensated for any losses on the rare occasion something goes wrong.”

The Legal Services Board recently published consumer research into professional indemnity insurance (PII).

The oversight regulator found that “consumers have low awareness of the existing arrangements in place to protect them when using legal services. There is a tacit assumption that such protection is simply part-and-parcel of the service/system. Whilst many were not aware of the exact nature of these arrangements, they tended to have taken it on trust that they would be protected in some way”.

I. Stephanie Boyce concluded:

“Low consumer awareness about the details of PII arrangements coupled with the public’s high expectations of the profession make it all the more important that such protections are in place.”

Jamie Lennox

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