A ‘substantial’ number of firms appear to have failed to declare their professional indemnity insurance position, the Solicitors Regulation Authority revealed today.
Supervision officers have discovered these solicitors have not provided the SRA with evidence of having secured a new professional indemnity insurance policy.
The SRA would not disclose how many firms are involved, but the figure is in addition to the 141 that declared failure to find insurance before the renewal date.
The discovery was made through data-matching exercises and the exact number of firms is changing every day. Even without a new insurer, firms automatically qualify for the extended policy period which covers them for 90 days from 1 October. However from 29 December they are required to close.
The SRA has contacted the firms involved to ask their insurance position and will consider possible enforcement action.
Mike Haley, SRA director of supervision, said: ‘We have identified a number of firms that have not found a new insurer and failed to notify us of their position. Given this failure, those firms are considered to be at risk of failing to obtain new insurance or wind down in an orderly fashion by 29 December.
‘As we warned in November, failing to notify us is a breach of the SRA Indemnity Insurance Rules 2012 and enforcement action will be considered.’
The SRA said it is continuing to work with firms definitely in the extended policy period as the end date approaches to ensure all contingencies are planned for.
Supervisors have been agreeing compliance plans to ensure clients' interests are protected as firms wind down.