News releases

SRA finalises identification of firms in the EPP

The Solicitors Regulation Authority (SRA) has now finalised the work it needs to do to identify firms that have failed to secure a new insurance policy.

The SRA has considered the insurance position of all entities that it regulates from its own data, information provided by participating insurers, the information from this year's renewals exercise and notification from firms that they are in the Extended Policy Period ('EPP').

From that exercise the SRA has established that, as at 16 December, there were 117 firms requiring insurance because they have not yet properly closed, where there is currently no evidence of the firm having a new indemnity insurance policy in place. Those firms have to find cover or properly close their practice by 29 December 2013.

The SRA is continuing to work with the 117 firms in the EPP to remind them of their responsibilities through regular and proactive engagement and the use of Compliance Plans. 108 Compliance Plans have been sent to firms, with 94 having been signed and returned by managers. Disciplinary action will be considered for firms that delay in returning signed Compliance Plans, or firms that fail to give the required regular updates to the SRA of their position.

Mike Haley, SRA Director of Supervision, said: "Some firms are better than others when it comes to addressing all the issues associated with an orderly wind-down, for example ensuring archived files are stored properly. We continue to work with firms to remind them of their responsibilities and the approaching deadline for closure.

"All of these firms are aware that they should not be carrying out any work on behalf of clients beyond 29 December as they would be doing so without insurance, so all live client matters and client monies must be dealt with by that date.

"Firms that continue to practise after 29 December or fail to wind down in an orderly fashion will be subject to swift regulatory action. Exercising our powers of intervention may be considered where it is necessary and appropriate in the public interest."

Of the 117 firms, seventeen of those failed to comply with their obligation under Rule 17.3 of the SRA Indemnity Insurance Rules 2012 to notify the SRA that cover was being provided by their current insurer under the EPP. Disciplinary action will be considered at a later stage for those firms, but the SRA's current focus is on ensuring orderly wind down where indemnity is not obtained.

Guidance on orderly wind-downs is available at

The EPP was introduced for the first time this year as a replacement safety net for the now abolished assigned risks pool (ARP), one of the final changes to the financial protection arrangements to be made following the adoption of the Financial Protection Policy in April 2011. The others were the removal of the single renewal date, the withdrawal of the "side arrangement" for uninsured firms, and the changing of the name of the Qualifying Insurers list to Participating Insurers to remove any notion that the SRA had in any way vetted those insurers providing policies.

Further information on professional indemnity insurance for solicitors is available at   

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