News release

Firms in firing line for failure to declare insurance position

The Solicitors Regulation Authority (SRA) has discovered a substantial number of firms that appear to have failed to declare their insurance position.

These solicitors have not provided the SRA with concrete evidence of having secured a new professional indemnity insurance policy since the renewal date of 30 September. The SRA has contacted these firms to ascertain their position and will be considering possible enforcement action.

The potential firms were discovered through a number of data-matching exercises carried out by the SRA. These firms are additional to the 141 that notified the SRA that they would enter the extended policy period (EPP) as they had definitely failed to find insurance before the renewal date.

Mike Haley, SRA Director of Supervision, said: "We have identified a number of firms that have not found a new insurer and failed to notify us of their position. Given this failure, those firms are considered to be at risk of failing to obtain new insurance or wind down in an orderly fashion by 29 December.

"As we warned in November, failing to notify us is a breach of the SRA Indemnity Insurance Rules 2012 and enforcement action will be considered."

The number of firms captured by this exercise is changing every day. These firms are of course still operating under an insurance policy as they automatically qualify for the EPP.

The SRA is continuing to work with firms definitely in the EPP as the end date approaches to ensure all contingencies are planned for. Supervisors have been agreeing compliance plans to ensure clients interests are protected as the firm winds down in an orderly way should they not be able to secure a new policy.

Guidance on orderly wind-downs is available at www.sra.org.uk/closingdown

 
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