Good news day for solicitors: both strike-offs and negligence claims fall

Riding the downward trend: fall in outstanding compensation claims

The number of solicitors struck off in the year to March dropped by 43%, while the number of negligence claims against solicitors reaching the High Court has also fallen, a flurry of new figures have shown.

There were also positive signs of the way that solicitors are dealing with complaints and putting into practice the lessons from them.

The Solicitors Regulation Authority’s (SRA) first quarter performance report showed that just 50 solicitors were struck off in the year to March 2012, compared to 88 in the previous 12 months. Suspensions increased marginally to 58, while the number of fines fell from 125 to 102.

According to the Ministry of Justice’s annual judicial and court statistics report, 125 professional negligence claims against solicitors reached the Chancery Division in 2011, compared to 144 in 2010 and the high water mark of 210 in 2009. Before the recession struck, High Court negligence cases against solicitors were running at around 30 a year.

By contrast there were no cases brought in 2011 against accountants, surveyors or estate agents.

The Queen’s Bench Division does not breakdown claims by profession, although 227 actions were launched in London in 2011 under the category of ‘Other negligence (including professional negligence)’, a fall from 247 in 2010.

The SRA figures showed that the number of interventions stayed steady at 60 for the year to March, but the level of outstanding claims against the Compensation Fund fell 25% in the three months to March to £170m.

In a briefing on the court statistics, City firm CMS Cameron McKenna said: “Whilst there has been a deterioration in the overall claims experience, the ‘claims tsunami’ predicted by some commentators has not materialised; nor will it, notwithstanding the likelihood of further claims by lenders over the next 12 months.

“Much may ultimately depend upon how long the current economic difficulties persist and how many problems emerge once assets are disposed of in the future. Given the long-tail nature of such claims, the underwriting years from 2008 have yet to mature and it will, therefore, be some time yet before their ultimate outcome can be predicted with any degree of certainty.”

The performance report also highlighted thematic research into first-tier complaints handling within firms, which involved visiting 100 randomly selected firms. This found that two-thirds of firms use complaints data to drive improvements in their operations and for consumers using their services; the majority of firms have a member of staff responsible for complaints and a system in place to record them; but that a minority “demonstrate a reluctance to formally record complaints, sometimes driven by perceptions that most complaints are unjustified and/or vexatious”.

The SRA said: “We came across many examples of excellent practice. We also identified some areas of concern and it is here that we are now targeting our resources to lift standards across the regulated community.”




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