Nicholas Gurney-Champion, immediate past chair of the Professional Indemnity Insurance (PII) Committee, has provided an update on the latest Solicitors Indemnity Fund (SIF) developments.
On 15 June 2021, the Solicitors Regulation Authority (SRA) announced that it had decided to extend the closure of SIF until 30 September 2022.
The SRA now regards post six year run-off cover (PSYROC) as a regulatory issue. It will launch a public consultation on:
whether there is a regulatory place for PSYROC evidence of other comparable run-off cover arrangements finding the right regulatory balance between consumer protection and issues of proportionality, affordability and the wider public interest the viability of possible options and discretionary uses of the SIF surplus, including the possibility of a hardship fund.
While it's been suggested that the closure of SIF only concerns retired solicitors, solicitors affected may include those continuing to work but who were previously employed in firms that have since closed.
There is also anecdotal evidence to suggest that the presence of PSYROC under SIF facilitates the acquisition of certain practices.
It's important that the profession fully engages with the SRA’s proposed consultation, and we will let you know how you can do so when the time comes.
Members of the SIF Working Group have consulted with retired members, local law societies and city solicitor groups on their objectives and concerns.
We've written a letter to the SRA setting out the issues emerging from these meetings.
In our letter, we once again pointed out the importance of dealing adequately and effectively with the issue of PSYROC for the continued protection of the public and the profession.
The formal consultation is due to launch immediately after the October 2021 PII renewal.
There will be a second, more targeted consultation in early 2022. Detailed proposals will be forthcoming in late spring, with a view to implementation by late summer.
The results of the upcoming consultation are likely to influence the PSYROC debate for the foreseeable future. It's essential that all those that have an interest in PSYROC respond to the consultation.