The Solicitors Regulation Authority has welcomed the suspension of a solicitor who failed to pay his assigned risks pool (ARP) premium as it vowed to step up enforcement efforts against other such firms with the end of the indemnity year looming.
The ARP is the temporary safety net for law firms which fail to find professional indemnity insurance and 153 firms covered during either/both 2009-10 and 2010-11 have now closed, up from 138 last month .
The SRA said that out of the 309 firms covered by the ARP at some point during 2010-11, 163 have now paid their premium in full; however, the outstanding premiums still amount to several million pounds.
The SRA did admit last month that taking regulatory action against non-payers has proved to be “slower and more complicated than at first envisaged”.
Formal disciplinary proceedings have now begun against 17 firms that have failed to pay their ARP premium – up from 10 last month – and recently the Solicitors Disciplinary Tribunal suspended for 18 months Wendell Arnold, a former director of Arnolds Solicitors in Swansea, for failing to pay his ARP premium as well as failing to co-operate with the SRA during the course of its investigation.
Co-director Lisa Jones was reprimanded for the breaches of the indemnity rules. The SRA said that in deciding upon the sanction for her, the tribunal concluded that it was Mr Arnold who was the director with sole responsibility for financial affairs, including the firm’s insurance arrangements.
In addition, it said the tribunal found that Ms Jones – who was newly qualified – relied heavily upon Mr Arnold and that she did not have the necessary experience either as a solicitor, or as the director of a legal practice, salaried or otherwise, of the duties and responsibilities required of such a role.
The tribunal accepted that she relied heavily upon Mr Arnold for information about the firm’s financial matters, which was to be expected as he was the equity principal and had been qualified for over 45 years.
SRA chief operating officer Mike Jeacock said: “The SRA appreciates that economic conditions are difficult for many firms. During the course of the coming weeks we shall monitor and assist those firms currently in the ARP who are unable to find insurance in the open market and whose only option is to close.
“But we also have a responsibility to the public and the profession to ensure that appropriate action continues to be taken against those firms which owe significant amounts of premiums to the ARP.”