News releases

SRA announces PII legal adviser

The Solicitors Regulation Authority (SRA) has reappointed Norton Rose Fulbright LLP as its legal adviser for client financial protection arrangements.

Norton Rose will start a three-year period on 1 October 2013 after successfully bidding during a tendering process that started on 11 April 2013. The firm will be responsible for advising on, and drafting related documents in relation to the arrangements, including:

  • The principal documents that underpin the compulsory professional indemnity insurance scheme
  • Associated contractual matters
  • Wider related issues as they arise
  • The documents in relation to run-off of the Solicitors Indemnity Fund
  • The Compensation Fund Rules, and the Compensation Arrangements Review

Agnieszka Scott, Director of Policy and Strategy, said: "We were delighted with all the bids we received. They were of a very high standard. Overall Norton Rose provides the best fit with our requirements and we look forward to working with them over the next three years"

Professional Indemnity Insurance arrangements are due to change in the next renewal period as the final year of financial protection policy changes are implemented. For the indemnity year 2013/14, the changes will be:

  • The ARP will cease to provide policies of qualifying insurance and will be replaced with a system where insurers offer a three-month extended policy to firms which cannot obtain PII for the following year. A firm may continue to practise while it attempts to obtain a qualifying insurance policy for the first 30 days of the extended indemnity period. For the remaining 60 days, ‘the cessation period’, the firm may only work on existing instructions while it attempts to find insurance, or conducts an orderly closure of its practice in the case that insurance is not obtained
  • The single renewal date will be maintained until October 2013 to facilitate the transition but will be removed for any policy starting on or after 1 October 2013
  • The 'side arrangement', whereby coverage is provided to uninsured firms that have not applied or are not eligible to enter the ARP, was withdrawn with effect from 1 October 2012, and instead claims arising from such firms will continue to be met by the Compensation Fund
  • As suggested by the Law Society, the Qualifying Insurers List will change its name to the Participating Insurers List. This is to remove any misunderstanding that the insurers involved have undergone any vetting by the SRA

The SRA is also reviewing the risk to clients when a firm's insurer gets into financial difficulties. The Authority decided to review the current arrangements with a view to reducing the risks of a Participating Insurer becoming subject to an insolvency event after Latvian insurer Balva encountered regulatory issues in its own country.

The review will be completed in time for any decisions to be made for the indemnity period starting on 1 October 2014. Further details of any progress made will be revealed in due course.  

 
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