News release

SRA calls for evidence on client protection issues

Following publication of a major programme of regulatory reform (www.sra.org.uk/reform) on 7 May, the SRA launched a number of supporting consultations.

These included proposals aimed at improving client protection, specifically

  • changes to professional indemnity insurance arrangements and
  • the introduction of eligibility criteria for making claims to the SRA's compensation fund.

The consultations closed on 18 June. Respondents were broadly supportive of the need for reform if not supportive of the specific proposals. Some suggested that further information was needed before the proposals could be progressed.

At its meeting on 2 July, the SRA Board agreed:

  • to the introduction of eligibility criteria for the Compensation Fund;
  • the introduction of a new "Outcome" requiring firms to assess and purchase appropriate professional indemnity insurance cover; and
  • a reduction in the minimum requirement for cover to £500,000.

It concluded that further work could be done to inform our wider approach to PII and the Compensation Fund. As a result, the SRA has launched a call for evidence to help with its decision-making.

The SRA is particularly interested in evidence that supports:

  • The ways in which regulation can reduce the risk of claims arising
  • the extent to which risk is shared between consumers and legal businesses
  • the impact of the PII Minimum Terms and Conditions
  • how far insurance cover should be more closely aligned to the nature of the legal services provided
  • the degree to which client protection arrangements are understood by consumers and are a driver of consumer behaviour

Crispin Passmore, SRA Executive Director of Policy, said: "We want to hear from firms, consumers, consumer bodies—as well as those who responded to the original consultations.

"We would particularly welcome contributions that draw upon relevant research, that refer to published or privately held data or provide examples from other jurisdictions or markets."

The call for evidence can be found at www.sra.org.uk/consultation. Contributions can be submitted via reform@sra.org.uk by 30 September 2014.

 
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