Firms fail to declare lack of PII
The Solicitors Regulation Authority (SRA) has announced that it appears a substantial number of firms have failed to declare their professional indemnity insurance position despite being required to do so. The SRA wrote to those firms who had declared that they had been unable to obtain cover in November advising them of the steps they needed to take and will now be contacting the firms who did not declare to ascertain their position and informing them of possible enforcement action.
The SRA discovered that there appeared to be firms who had not declared by undertaking a data-matching exercise.
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 number of firms captured by this exercise is changing every day. These firms are of course still operating under an insurance policy as they automatically qualify for the EPP.
The SRA is continuing to work with firms definitely in the EPP 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 the firm winds down in an orderly way should they not be able to secure a new policy.
If your firm is one of those that has failed to find insurance and who must cease practising by 29th December, then the Lawyers Defence Group can assist you – either by helping you to achieve an orderly wind down or, alternatively, by discussing with you the possibility for continuing in association with another firm.