A single professional indemnity insurance scheme and compensation scheme could cover the entire legal services sector, if a consumer watchdog proposal becomes reality.
In a report published today on legal regulators’ financial protection schemes, the Legal Services Consumer Panel says that a single scheme would allow PII premiums to be based on type of legal work rather than professional title.
It calls on regulators to address concerns about gaps in insurance coverage and for more transparency in decision-making and performance of compensation funds.
The panel also encourages regulators to explore ways to reduce the need for lawyers to hold client money. But it rejects any suggestion that consumers should have to insure themselves.
Elisabeth Davies, chair of the panel, said: ‘We think the same level of protection could be delivered at a lower cost if the different regimes were united under a single scheme covering all lawyers.
‘The status quo is expensive for lawyers and consumers ultimately pay the price. The government has signalled it wants to simplify the regulatory system – this is an obvious candidate and could be a win-win for consumers and lawyers.’
Today’s report was published in response to a Legal Services Board request for advice on the compensation system.