The Law Society has welcomed final approval for a new indemnity fund for solicitors but expressed concerns about how it will be financed in future.

The Legal Services Board this week published its decision on the SRA’s rule change application to bring the Solicitors Indemnity Fund (SIF) under the regulator’s direct managerial control.

Law Society president Lubna Shuja said: ‘We are pleased that the changes have been approved. This comes after significant campaigning from the Law Society on behalf of the profession to keep the fund open.

‘The decision will come as a huge relief to solicitors and their clients. It provides assurance that those rare negligence claims that may come to light long after the errors were made, will still benefit from the established SIF protections.’

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Shuja: 'Decision will come as a huge relief to solicitors and their clients'

Source: Darren Filkins

But the SRA has said it will monitor the claims against residual funds from SIF and, if it requires additional funds, it will carry out a new consultation on the introduction of a levy.

Shuja added: ‘We are disappointed that the LSB has not required the SRA to implement a compulsory levy on the profession, which we believe would have been the best way to ensure the ongoing viability of the fund.’

The LSB’s decision will transfer control of SIF from the Solicitors Indemnity Fund Limited to the SRA and revoke the date (30 September 2023) that SIF was to close to new claims. SIF will continue to provide some protection for consumers who suffer a loss from the negligence of a solicitor but cannot make a claim under the firm’s insurance because the firm has been closed for more than six years and the mandatory insurance period has ended.

 

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