The SIF debate is finally over as SRA takes control of run-off scheme

Clive Sutton, ‘Legal Hero’ for his work saving the SIF

The seven-year debate over the future of the Solicitors Indemnity Fund (SIF) has finally ended, with the Solicitors Regulation Authority (SRA) formally taking over its management on Sunday.

The SIF was originally the profession’s insurer, but after the decision was taken to open up to the market in 2000, it became responsible for covering solicitors against claims made after the six-year period of run-off cover ends.

The Law Society originally envisaged it running from 1 September 2007 – the point until which firms would be covered by their own mandatory six-year run-off cover – to claims notified before 30 September 2017, with the cost met out of the surplus that existed after the SIF went into run-off.

The SRA board decided in 2016 that the SIF would close in 2017, with solicitors left to find cover on the open market. But after vocal protests from the Law Society and others, and several extensions, the SRA decided last year not to abolish it and instead bring it in-house. The SIF still covers losses relating to work done before 2000.

The SRA has published a new claim form with supporting information, and has appointed insurance services provider Polo Works on an 18-month contract to handle new and existing SIF claims.

Polo will work closely with the SIF panel firms currently handling open claims “to make sure of a smooth handover and continuity of service”, the regulator said.

The SRA said taking responsibility for the operation of the SIF “will ensure appropriate oversight and governance of the scheme”, and “should” also lead to a reduction in the scheme’s running costs.

The regulator has resisted pressure from the Law Society to impose a levy on the profession “as soon as possible” to raise funds for the SIF.

SRA chief executive Paul Philip said: “Both the public and profession value the protections the SIF provides. By running the scheme ourselves, we will provide assurance for all that there is ongoing protection for clients.

“Running the scheme will also give us clear oversight of how the indemnity operates, enabling us to run it efficiently and realise potential cost savings.”

Law Society president Lubna Shuja said it was “the culmination of a collaborative effort from a range of stakeholders who proved the profession as a whole wanted to retain the SIF”.

She continued: “We acknowledge the way the SRA listened to the concerns expressed by the Law Society and consumer groups and responded responsibly.

“We have been greatly impressed by the huge amount of work undertaken by the SRA staff to bring the SIF under the regulator’s direct management in time for the start of October.”

She reiterated the society’s belief that a levy on the profession “may be required to prevent the SIF’s assets from being run down”.

Among the seven winners of the Law Society’s recent ‘Legal Heroes’ awards – a new ceremony replacing the Excellence Awards – was Clive Sutton in recognition of his work campaigning to maintain the SIF.

It said Mr Sutton, a Hampshire solicitor who is one of the Sole Practitioners Group’s two representatives on the Law Society council, “has demonstrated devotion to safeguarding solicitors and the public”. Ms Shuja is the other.

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