PII and Compensation Fund

What we are trying to do

We are consulting on proposed changes to Professional Indemnity Insurance arrangements and our Compensation Fund rules

Who needs to know

Everyone working in a firm we authorise and/or regulate and users of legal services.

What's going on

We make sure there is a minimum level of financial help available if a solicitor, or an individual working in a firm we regulate, is dishonest or incompetent. We do this in two ways:

  • Requiring that all the firms have a minimum level of Professional Indemnity Insurance (PII).
  • Running the Compensation Fund, which is available to eligible applicants when other avenues of redress have been exhausted.

Now we are consulting on changes to make sure people get the right level of protection, and in turn benefit from a more competitive marketplace and increased choice.

Our PII proposals will give firms more flexibility to choose the right level of insurance to suit their business and clients. These include:

  • Reducing single claims limit from £2m to £500k (£1m for conveyancing when needed).
  • Keeping the need for a six years run-off period but this would now include a cap.
  • Removing the need for cover for large commercial clients.

Our Compensation Fund proposals are designed to make sure financial support is focussed on those most in need of help. These include:

  • The maximum payment being reduced to £500k.
  • A hardship tests for all claims.
  • Tougher assessment of all claims validity.

Get involved

Our consultation is now closed. Thank you to everyone who took part.

We value your views and will be feeding back on the consultation later this year.

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