A recent memorandum about the impending closure of the Solicitors’s Indemnity Fund (SIF) was circulated and I hope was widely read. SIF is controlled by the SRA because indemnity insurance is regarded as a regulatory matter and the Law Society is prohibited from handling regulatory matters.
At present SIF covers claims against closed firms which are made after the 6 year run-off period and the effect of its closure will mean that anyone whose firm has closed will be uninsured against claims made after 6 years. Bearing in mind that Covid has accelerated the closure of a number of firms this is potentially a very serious matter. Th Law Society is working hard to try and find a solution but has not yet succeeded. If anyone has any concerns about their position please email SIF@lawsociety.org.uk.
Indemnity premiums are hardening significantly as I am sure you are aware. A particular area of concern is Conveyancing because fees are far too low and many firms survive by employing unqualified staff who can fill in a standard form but not much else, and certainly would not spot a legal issue if there was one.
This a recipe for claims leading to even higher premiums. I raised the point at a recent Council meeting and said the Conveyancing Quality Scheme seemed to a box ticking exercise for the benefit of lenders rather than a means of raising standards. I was to.d that Covid had prevented the implementation of a proposal for spot checks but these would occur as soon as possible. I do not believe that being able to claim membership of a Quality scheme should be allowed without stringent tests to demonstrate a decent standard, and should be an avenue to higher fees.
Another area of concern is the growth of unregulated providers. In view of the prevailing winds which blow against anything in favour of Solicitors there is a reluctance to rock the boat on the subject of reserved activities ie those matters that can be done only by a Solicitor. I know it would need primary legislation but I think we are missing a trick here. We cannot practise without indemnity insurance. I don’t think anyone should be allowed to provide legal services for gain which involve clients’ money (and I include Will writing, Powers of Attorney and similar matters) unless they have compulsory indemnity insurance. That is the only way of protecting the public which is the whole purpose of regulation.
At least a study is being conducted and we need examples of problems caused by inadequate advice or work from unregulated providers to build a case for restricting them in the public interest. So please come forward with examples if you can- don’t leave it to someone else. Concrete evidence is what is required.
How many of you bother to read the Gazette? There is a suggestion that the paper copy should be phased out and the whole thing be on-line. Would anyone object? If so speak now.
I hope the above shows how important it is to have a professional body that does its best to represent practitioners. I think the Law Society has done an excellent job in looking after Solicitors during the Pandemic from which I hope we are at last emerging.