SRA advice to firms without PII

SRA advice to firms without PII

The Solicitors Regulation Authority has issued some advice to those firms that have so far been unable to secure a new professional indemnity insurance policy.

The SRA has written to those 141 firms that that are still in their extended policy period (EPP) advising them that they need to take steps towards closing down their practices and outlining what should happen next. The letter reiterated the firms’ obligations and responsibilities, and that an SRA Supervisor would work with them to draw up a plan for complying with guidance, should they need to wind down their practice.

Mike Haley, SRA Director of Supervision, said:

“We’ve written to all those firms that we believe have not secured insurance so that they know exactly what they will have to do between now and 29 December. We’re aware of the different plans some of them have, such as merging with another firm or selling their business, but all need to know that when the EPP ends, they will no longer have insurance and therefore will not be able to undertake any reserved legal activities.

 

“Of course, it could be that these firms do secure a new policy between now and 29 December, and nearly half of those who entered the EPP have done just that. But there is a danger that firms do not plan for the worst, and that could put their clients’ interest at risk, meaning we would have to step in.

 

“That is something we are keen to avoid as there is disruption for clients and an associated cost for the profession.”

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