SRA report on client financial protection arrangements
In July 2010, the SRA commissioned Charles River Associates (CRA) to undertake a “root and branch” review of the current financial protection arrangements and in particular to look at:
- the scope of protection offered to consumers of legal services,
- the means by which that protection is delivered, and
- the impact of those arrangements on consumers, individual firms, the legal services sector as a whole, and the SRA itself.
The full report is available to download from the Solicitors Regulation Authority website.
The report made a number of recommendations for change. These included:
- Client coverage – a requirement that cover be compulsory for individual clients but not for others such as commercial clients;
- Remove restriction of single renewal date – there is no evidence that a single renewal date is required and having a single renewal date creates problems particularly for small firms because of resourcing constraints;
- Non-payment of premiums – the removal of insurance cover when premiums are not paid;
- Funding by firms in ARP – use individual underwriting in order to reflect risk; and
- Compensation Fund – maintain single Compensation Fund including for ABSs.