New SRA-run indemnity scheme puts consumers first
The Solicitors Regulation Authority’s (SRA) proposals for a new post six year run-off cover (PSYROC) scheme should secure long-term consumer protection, the Law Society of England and Wales said today in response to a consumer-focused consultation.
Law Society President Lubna Shuja said: “These proposals will enable consumers to claim compensation if there is a rare occasion when something goes wrong many years after a solicitor has provided legal advice.
“People go to solicitors for support and advice during significant events in their lives – the death or injury of a loved one, family breakdown, a house purchase or estate planning.
“They do so, rightly confident that solicitors are highly qualified and regulated. Consumers trust their solicitor is adequately and appropriately insured, and that they would be compensated in the unlikely event that late-arising negligence were to be identified.
“Any new supplementary run-off cover arrangement must meet three key principles.
"First, any new arrangement should continue to run as an indemnity scheme, which could be funded on an ongoing basis through a mandatory levy on firms.
“Expert analysis carried out on behalf of the SRA suggests that this should cost less than £240 per firm per year, which is unlikely to affect the price of legal services for consumers.
“Second, any residual funds from the Solicitors Indemnity Fund (SIF) should be ring-fenced for the specific purpose of dealing with PSYROC claims, for the benefit of consumers and solicitors.
“Third, any new arrangement should provide the same scope of indemnity cover that is currently provided by SIF.
“We believe the proposals set out by the SRA for a new PSYROC scheme, operating under their direct control, could meet these requirements and if that is achieved, we support the SRA’s proposed approach.
“We look forward to working constructively with the SRA on the future of this important consumer protection.
“We expect further explanation of the basis on which the new scheme will operate to be included in the SRA’s rule change application to the Legal Services Board, which will be the next major step towards ensuring the new arrangements are in place by 1 October 2023.”
Notes to editors
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