It is 'highly unlikely' that law firms will have to make further contributions to the Solicitors Indemnity Fund (SIF), it emerged this week.

The fund has reported an accumulated surplus of 33.6 million following the shortfall contribution of 25 million raised from the profession in September 2002.

SIF chairman Paul Marsh said: 'This really is excellent news.

The fund is financially stronger than it has been for many years and it is now highly unlikely that we will need to raise further contributions from the profession.'

In 1998, it emerged that the SIF had underestimated its claims liability by 450 million and a seven-year plan of payments was implemented, although last year it was able to levy a nil contribution.

The outcry over the shortfall ultimately led to the SIF's demise and the profession entering the open market.

Peter Farthing, chairman of the Law Society's indemnity insurance committee, said: 'The surplus is encouraging but there is still a long way to go before the end of the run-off period.'

Some uncertainty remains over the SIF, especially over the ultimate financial impact of the high level of precautionary notification made to the fund in the summer of 2000.

This will continue until at least 2006, when primary limitation expires.

The total number of claims dealt with during 2003 was 5,670, a 35% drop on the previous 12 months.

The SIF predicts that by 2010, it will be dealing with the residue of some 1,000 complex and high-value cases.

Meanwhile, work to define pan-European standards for professional indemnity insurance (PII) took a step forward recently at the Council of the Bars and Law Societies of Europe's (CCBE) second annual indemnity insurance conference, held in Paris.

The work is designed to meet concerns about the problems of different indemnity requirements for firms operating cross-border, which often leads to practices having to take out extra insurance to cover local offices.

The conference decided to prioritise the agreement of a 'difference in conditions' policy - which could be used as additional cover when the home PII fails to meet the standards of host requirements.

The news came as Guy Mansfield QC - the Bar Council's vice-chairman - sent a letter to the heads of all chambers urging barristers to consider whether their practices might require more indemnity cover than the bar's 250,000 minimum.

Jeremy Fleming