SRA: considering enforcement action
A “substantial” number of law firms have failed to tell the Solicitors Regulation Authority (SRA) whether or not they have professional indemnity insurance (PII), the regulator admitted today.
The SRA would not reveal how many had not declared their insurance position, but last month said there were at least 50 it knew of and potentially more who had not been in contact at all.
The SRA said it has contacted these firms to ascertain their position and will be considering possible enforcement action.
The potential firms were discovered through a number of data-matching exercises carried out by the SRA. These firms are additional to the 141 practices that notified the SRA that they would enter the extended policy period (EPP) as they had definitely failed to find insurance before the renewal date.
An SRA spokesman said a handful of the 141 have since secured cover, while others have closed, with the rest still trying to find insurance.
Mike Haley, SRA director of supervision, said: “We have identified a number of firms that have not found a new insurer and failed to notify us of their position. Given this failure, those firms are considered to be at risk of failing to obtain new insurance or wind down in an orderly fashion by 29 December.
“As we warned in November, failing to notify us is a breach of the SRA Indemnity Insurance Rules 2012 and enforcement action will be considered.”
These firms are still operating under an insurance policy as they automatically qualify for the EPP, which allows firm to continue operating for 90 days after the 1 October renewal date.
The SRA said it is continuing to work with firms definitely in the EPP as the end date approaches to ensure all contingencies are planned for. “Supervisors have been agreeing compliance plans to ensure clients interests are protected as the firm winds down in an orderly way should they not be able to secure a new policy,” it said in a statement.
