The Solicitors Regulation Authority is soon to launch a consultation on ‘radical reform’ of the assigned risks pool.

It is understood that proposals for consultation could include changes to the conditions for entry or even the demise of the pool.

There are currently around 359 firms in the ARP, more than double the number last year.

Andrew Long, chairman of the SRA’s financial protection committee, said: ‘The board [has] had a discussion about a forthcoming consultation on some proposals for a radical reform to the ARP. A public consultation will be issued shortly for changing the way the ARP operates.’

Long said it was uncertain at this stage whether the number of firms in the ARP this year would go up or down. He added: ‘There will be many more firms in the pool this year than last. It will be a significant increase.

‘Historically [the makeup of the ARP] has always been at the smallest level, sole practitioners or firms with two, three or four partners… [It looks like] it will continue to be dominated by the smaller end of the profession.’

Long added that one ‘comparatively large firm’ had made a precautionary application to join the ARP, but had later managed to find insurance cover in the market.

It is understood that the board is concerned about the ARP’s fitness for purpose in the present climate, with an unprecedented number of firms now in the pool. One board member referred to the possible ‘demise’ of the pool.

The ARP is the insurer of last resort for firms which cannot gain professional indemnity insurance from commercial insurers. It charges punitive premiums of up to 27.5% of turnover.