The Law Society Council has issued a statement on the closure of the Solicitors Indemnity Fund (SIF), expressing its ongoing commitment to working with the Solicitors Regulation Authority (SRA) to facilitate an extension and outlining its belief that retaining the SIF would be in the best interests of the profession and wider society.
In the interests of market and public confidence and the stability and management of SIF funds, the Council has called for a speedy resolution to the matter. The Council’s statement follows a strongly-worded motion about the SIF passed at the Law Society’s annual general meeting on 14 October, and continues its work on behalf of solicitors and their clients urging the SRA to find a long-term solution to the issue of run-off indemnity cover.
The SRA planned to close the SIF on 30 September this year, but extended until 30 September 2022 after successful lobbying by the Law Society. The SIF currently provides supplementary run-off cover for firms that have closed, ensuring ongoing protection for clients, partners and staff once their mandatory six year run-off period has come to an end. The SRA is expected to launch a consultation on the closure of the SIF in November, ahead of which we have been proactively engaging with members.
The Council’s full statement provides that:
- The Law Society accepts that a decision relating to the continuation of the Solicitors Indemnity Fund (SIF) is a regulatory matter to be determined by the Solicitors Regulation Authority (SRA)
- The Law Society remains committed to continue to work with the SRA to facilitate the extension of the SIF
- The Law Society believes that:
- it is in the interests of the profession and in the wider public interest that comprehensive and affordable professional indemnity insurance continues for the protection of solicitors and their clients, at the end of the mandatory six-year run-off period
- following its own research over many years and on current evidence, the best way of achieving this is to maintain a mutual fund such as the SIF, with such adjustments as would aid its longevity and affordability
- retaining the SIF would meet regulatory objectives to maintain access to justice and the rule of law; to protect the interests of consumers; and to encourage an independent, strong, diverse and effective legal profession
- a speedy resolution is required – in the interests of market and public confidence, and for the stability and the future management of the SIF funds.
Further information about the proposed closure of the SIF see the Law Society Guide which can be found at www.lawsociety.org.uk/topics/professional-indemnity-insurance/closure-of-sif