The Solicitors Regulation Authority (SRA) has made several changes to the Solicitors' Indemnity Insurance Rules, which will take effect from 1 October 2010.
- changes to the Assigned Risks Pool and successor practice rules
- a change to the qualifying insurers' general reporting obligations to enable the SRA to verify that they are complying with their obligations under applicable equality and diversity laws
- removal of the obligation on insurers to provide cover for defence costs in relation to disciplinary matters arising from claims
- following the introduction of the Land Registry Network Access Agreement, the rules will clarify the provisions setting out exclusions from cover to ensure that if a firm enters into a contract for the supply of goods or services to the practice, it will not affect the cover the firm had before entering into the contract.
Law Society's reaction
The Law Society opposed the removal of the obligation on insurers to provide cover for defence costs for disciplinary matters. This obligation under clause 1.2(c) in Appendix 1 of the rules is limited to disciplinary proceedings associated with claims on qualifying insurance policies. The Society believes this constitutes a substantive amendment to the rules and as such should have been subject to broader consultation with the profession. However, we were given insufficient notice of the nature of the impending changes to effect a meaningful dialogue with the SRA prior to its Board approval. We have reminded the SRA of the need to consult appropriately before significant changes are made.
We supported the clarification of the provisions setting out exclusions from cover and we also successfully argued that it should be further clarified to ensure that solicitors are fully covered for potential liabilities arising from the Network Access Agreement.