Summary of public section of the SRA Board meeting

The SRA will carry out a "root and branch" review of the entire area of financial protection for clients, with "nothing ruled in and nothing ruled out", the Board agreed.

Input will be sought from the Legal Services Board, consumer groups, the Law Society and other stakeholders, including the Association of British Insurers. The review will conclude in 2011, in time to make changes to the insurance renewal round in October.

At the May meeting the Board approved the retention of the Assigned Risk Pool (ARP) and the making of some key changes with effect from 1 October this year.

They were:

• new firms are not eligible to be issued with an ARP policy;
• the maximum period of cover reduced from 24 months to 12 months. The SRA retains the power to allow a firm to stay within the ARP beyond the maximum period;
• rules relating to "Successor Practice" contained in the Minimum Terms and Conditions (MTC) are amended to allow a firm that is to cease by way of a succession to elect to trigger run-off cover, subject to payment of any run-off premium and notification to the SRA;
• the Qualifying Insurers Agreement (QIA) is amended to allow backdating of cover up to a maximum of 30 days at any time of the year within an indemnity period.

At the June meeting the Board agreed to make the Solicitors' Indemnity Insurance Rules subject to the approval of the Legal Services Board.

They agreed an amendment on the MTC which removes the obligation on insurers to cover for defence costs on disciplinary matters, although insurers can continue to provide this cover at their discretion. The Board also agreed to an extension of clause 6.4 (general reporting requirements) to oblige insurers to provide the SRA with information relating to equality and diversity obligations.

A Fairer Fees policy and draft fee determinations for 2010 were agreed in principle by the Board, subject to final decisions by the SRA Board and the Law Society Council in July, and approvals by the Legal Services Board.

The new fees structure will mean a much reduced individual practising certificate fee for solicitors, which is likely to be in the region of £460 (compared to £1,180 for 2009/2010), plus a firm fee calculated on a firm's turnover.

There will also be flat fees of around £10 for individuals and £120 for all firms that hold client money, for the Compensation Fund.

The aim of the new policy is for greater fairness in meeting the costs of regulation going forward.

SRA Chief Executive Antony Townsend told the Board that there had been a very positive response from the legal profession and consumer groups to the SRA's new approach to regulation: outcomes-focused regulation.

He said that roadshows and consumer group briefings had been well received, and that they would continue through July and August. SRA Chair Charles Plant added that he would like to thank everyone who had been involved in making the roadshows so successful.

Antony Townsend added that key appointments to the team responsible for piloting the relationship management approach to corporate firms had now being made and pre-pilot visits to City firms had been completed, with pre-pilot visits to other large firms now being planned.