[1]SRA: list published in public interest
The Solicitors Regulation Authority (SRA) has published a list of 136 firms that failed to renew their professional indemnity insurance since October, but said a small number have failed to close properly.
The authority broke with its usual practice of withholding the names “in the interests of protecting consumers and third parties”, adding: “Publishing the names adds an extra layer to the protection already in place.”
It said the majority of firms that went into the extended policy period – having failed to renew on 1 October – had carried out an orderly closedown, but declined to indicate how many firms had failed to “close down properly”. These firms were “subject to ongoing robust action” and there was no regulatory reason to specify the names.
Among the 136 firms – 31 of which were in London – was the firm originally set up by former justice minister Helen Grant, Croydon-based Grants Solicitors. Earlier this month the firm issued a statement on its website saying that it had closed in December “as a result of changes in personal circumstances”.
The SRA flagged earlier this week that it would publish the names [2], after reports of law firms asking opposing solicitors for evidence of their insurance before remitting any money in conveyancing transactions.
Previous insurers are committed to providing run-off cover for a six-year period where there is no successor practice to the firm closing down. SRA guidance insists: “Following the closure of your practice, you must take care not to practise or be held out as practising when tying up loose ends”
The SRA warned firms that they could not practise without valid insurance, but said the court had “accepted that solicitors who do not have a practising certificate may sign a bill of costs for work done when they did have such a certificate: but this must be made clear on the bill”.
It also said: “If you continue to practise (inadvertently or otherwise), this may lead to disciplinary action as well as having possible indemnity insurance implications, particularly if you practise into a new indemnity period for which you should have obtained a new policy of insurance.
“Whilst you can continue to use your firm’s notepaper in dealing with outstanding administrative tasks, you will need to adapt the notepaper to make it clear that the firm has closed and to ensure that you (if you are a sole practitioner) or the managers are not held out as practising. When taking telephone calls after the firm has closed, you should ensure where necessary that it is made clear to the caller that the firm has closed.”
See here for a list of the firms [3]