By Anita Rice


The Solicitors Indemnity Fund (SIF) has expanded into the commercial sector by launching a professional indemnity claims and risk management service.



The SIF was absorbed by a newly-formed company, Legal and Professional Claims (LPC), after a name and shareholding change last month. The company will manage the fund until its final closure, expected to be in around five years time, and is owned by the Law Society.



SIF chief executive George Raubenheimer said the move would allow the fund to retain highly-qualified staff and ensure it is properly run in the future.



'We have an excellent staff team, which is liable to be broken up as the fund reduces in size, which we can turn into a commercial advantage for the Law Society,' he said.



Mr Raubenheimer doubted that the venture would be competing with law firms providing similar services, saying: 'It is traditionally insurance company-type work. But, if there is competition, I think competition is a good thing.'



LPC intends to initially work with new entrants to the solicitors' professional indemnity market that may be daunted by the prospect of setting up their own claims' operation unit.



The venture also aims to target insurers leaving the market. Mr Raubenheimer said: 'Being able to outsource run-off to a known and reliable provider will reduce costs. Paradoxically, having an easy and clean exit route should help to encourage new players.'



Law Society chief executive Des Hudson said: 'We have been happy to give [SIF's business plan] our blessing because... we are concerned [to ensure] the SIF can manage the run-off and, as the fund becomes smaller, that becomes more difficult.'



He pointed out the venture would defray costs and keep the practising certificate fee down, and that expected profits amounted to less than 1% of the Law Society's budget. 'This approach is a judicious taking of risk for a sensible reward.'