Monday, 20 January 2014

Conveyancing Firms Prominent on SRA List of Uninsured Firms

In an unprecedented move, the Solicitors Regulation Authority (SRA) late on Friday, published the names of 136 firms that they advise have been forced to close as a result of failing to secure professional indemnity insurance (PII).

The timing appears to have been well thought out, allowing the Law Society to remove the names of firms on the ‘find a solicitor’ search tool. It is apparent that a number of firms were removed only in the last few days.  

In a statement issued by the SRA, they said that they do not normally publish the names of firms that have closed because the firms are under an obligation to inform clients of that fact themselves. However it added: “The SRA has taken the decision on this occasion to publish the names in the interests of protecting consumers and third parties. Publishing the names adds an extra layer to the protection already in place.”

There has been some confusion over how claims relating to these firms would be handled. The SRA’s discretionary compensation fund ought to kick in, but the SRA’s rules state that the maximum grant that may be made from the fund is £2m, which would cover sole practitioners but represents a £1m shortfall on the statutory cover required for ABSs and LLPs. 

Detailed analysis commissioned by Lexsure reveals that 58% of the firms listed conducted conveyancing, with some firms claiming on their websites that they achieved CQS accreditation. Nine of the firms were Lexcel-accredited.  

As of this morning, 15 of the 136 firms have published statements on their websites advising that they have closed.

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