News release

SRA statement: LSB notice

The SRA has responded to the LSB decision to publish a notice issued pursuant to paragraph 21(1)(b) of Part 3 of Schedule 4 to the Legal Services Act 2007. The notice relates to the SRA’s application submitted on 15 July 2014 seeking approval for changes to the Indemnity Insurance Rules to reduce the compulsory minimum level of cover to £500,000 from £2m (£3m for incorporated practices).

Go to the LSB notice

The effect of this notice is that the SRA has been invited to provide further information to the LSB to support the application and to further extend the time available to the LSB to consider the application.

Given this, the SRA has announced that the changes proposed to the indemnity insurance requirements to:

  • reduce the minimum compulsory level of cover; and
  • to introduce a new Outcome requiring firms to assess and have in place an “appropriate” level of cover

will not now come into effect before October 2014 which is the date on which the majority of regulated firms must renew their annual PII cover. The 2013 SRA Indemnity Insurance Rules and minimum terms and conditions will remain in force for the October 2014 renewal. Consequential changes have been made to the Participating Insurer's Agreement 2014 to reflect this development.

Charles Plant, Chair of the SRA Board, said: “We are obviously disappointed that the LSB has issued the warning notice today. The immediate impact is that the changes we have proposed in relation to reductions in mandatory cover cannot now take effect in October this year.

"In principle, I think this is the wrong decision and we remain convinced of the case for changing the arrangements for professional indemnity insurance, in order to deliver benefits for solicitors and consumers alike. We will, therefore, continue to develop our proposals on this issue."

Further information on the SRA's Regulatory Reform programme can be found here:

Go to the Regulatory Reform programme

 
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