Compensation Fund changes consultation
The SRA have launched a 12 week consultation on the provisions relating to the Compensation Fund.
Entitled “Protecting users of legal services – prioritising payments from the SRA Compensation Fund” the consultation follows the conclusion of a consultation last year which proposed reform to both the Professional Indemnity Insurance (PII) and Compensation Fund arrangements.
It is hoped that the proposals will lead to greater clarity on when grants are made, protect the long-term sustainability of the fund and build on stakeholder feedback from the earlier consultation.
The proposals build on the feedback provided in responses to a 2018 consultation on both professional indemnity insurance arrangements and how the fund is managed. Changes made as a result of this feedback include introducing a maximum cap on related claims and dropping proposals for the introduction of a hardship test.
As well as making sure the fund remains sustainable, the new proposals also seek to make it clearer when it is likely a grant from the fund would be made.
The SRA have indicated that they aim to make sure grants are prioritised and focused where they are most needed.
- Focusing eligibility criteria on people that need most protection and removing the current hardship tests
- Only allowing applications from people that have been provided or are a recipient of a legal service from the solicitor involved
- Reducing the single claim limit to £500,000, and being clearer about how we apply this limit
- Capping the total amount payable for a group of related claims
- No longer allowing claims where an insurance policy has been voided or has already paid out money
The consultation will run to 21 April. Once finalised, any agreed changes will need approval by our Board and Legal Services Board.