Some 37 law firms in the assigned risks pool (ARP) have closed since August, with a further 10 in the process of shutting their doors, the Solicitors Regulation Authority (SRA) reported today.
The firms have come to the end of the two years they were allowed to be in the pool, a period now cut to one year for new entrants. The SRA said ARP firms, of which there are now around 170, have also paid up over £750,000 of outstanding premiums, although some millions are still outstanding.
The update on the crackdown on firms in the ARP – which was first announced in July (see story) – is arguably timed as a warning for the firms which have made protective applications to join the pool after failing to secure insurance by 1 October but have a further four weeks to find cover that can then be backdated.
The SRA said it is already identifying for early investigation all firms that have entered the 2010/11 ARP that pose a high regulatory risk. All firms in the pool will receive visits from the SRA and there will be an immediate focus on the prompt payment of premiums.
The latest number of firms which have made applications to the ARP is 418 to 7 October, compared to 428 at the same time last year. Of these, 22 have already found insurance cover on the open market since 1 October, and so will not be in the ARP. Others are likely to do so over the coming weeks if previous years are anything to go by.
SRA chief operating officer Mike Jeacock said: “In August we launched an enforcement strategy for firms in the ARP. All firms have received visits and advice, and action is being taken against those posing an unacceptable risk or failing to pay their premiums. Our strategy is proving a success.”