Solicitors have been trading without professional indemnity insurance (PII) amid the market meltdown, while the number of law firms in the assigned risks pool (ARP) has increased six-fold, the Gazette has been told.

Shortly after the 1 October deadline, the Solicitors Regulation Authority said 150 firms were in the ARP, a sharp increase on last year. The ARP provides PII for firms unable to find cover with conventional insurers, but charges much higher premiums.

Brokers said many firms had been unable to find conventional cover and had also failed to apply to enter the ARP before the deadline.

Solicitors have 60 days after the deadline to find cover with conventional insurers, but will pay inflated premiums. If they did not apply to enter the ARP before the deadline, but are eventually forced to do so, they must pay an extra 20% on top of the already high premiums or be forced to close.

Nick Pointon, company director at broker PYV, said he had received around 300 phone calls since the deadline from solicitors who had not found cover. About 20% of those had not applied to enter the ARP either. ‘We instructed them to apply to the ARP immediately,’ he said.

Martin Ellis, director and head of the solicitors practice group at broker Prime Professions, said around 20 solicitors a day had called Prime. He added that most had made a provisional application to enter the ARP, but some had not.