Firm angry over inclusion on SRA indemnity list as solicitors predict PI firms will dominate next one
SRA: list does not say firms did not receive insurance offer
There have been some angry reactions to the Solicitors Regulation Authority’s publication last Friday of the names of 136 law firms which did not secure professional indemnity insurance (PII) by 29 December.
Most vocal was Grants Solicitors, the firm set up by former justice minister Helen Grant MP and latterly run by her husband, Simon.
The firm closed on 20 December, citing “positive changes in personal circumstances”, and has updated its website to express its unhappiness at appearing on the list.
“Our firm has been wrongly included in lists of practices that were not offered terms for professional indemnity insurance, thus suggesting this as the reason for our closure. This is abjectly [sic] not the case,” it said.
“Grants Solicitors LLP were offered terms from our existing broker and one other, but members chose to close the practice of their own volition. We will be taking this up with the Solicitors Regulation Authority as they were well aware of the facts but disappointingly have failed to indicate this in their widespread communications.”
However, a spokesman for the SRA pointed out that the list was of those firms that did not have PII in place by 1 October deadline and did not obtain new cover during the 90-day extended policy period, which finished on 29 December. This included Grants.
The list did not seek to suggest that the firms named had failed to secure an offer of PII during that period.
Meanwhile, defendant insurance practice DWF has predicted that small personal injury firms could feature heavily on the 2014 list of firms that have to close after the extended policy period.
In a briefing issued this week, DWF said: “In the post LASPO injury claims world it is of course those smaller firms operating in the claims environment who will struggle most to achieve the efficient business models needed to be able to survive.
“The problem of being able to obtain PII cover is another burden they must bear. The reality of the position surely remains that the future is bleak for this type of firm as the Jackson inspired reforms bed in.
“And the position at renewal in the autumn of 2014 is likely to be worse still for that type of firm. There may be still fewer insurers in the market, and the Court of Appeal’s judgment in Mitchell v NGN, repeated since in other cases, confirming a strict approach to relief from sanctions applications, surely raises the level of risk still further for small claimant operations.
“The view taken by insurers providing PII cover to this type of claimant law firm probably means a tougher challenge lies ahead for them to obtain cover in October 2014 especially if the firm has already a poor claims record because it has succumbed to adverse judgments post Mitchell.
“The trend towards larger more efficient outfits in the claims world is very much on-going and will continue because of these developments.”
Tags: professional indemnity insurance, Solicitors Regulation Authority
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