Black and minority ethnic (BME) law firms are over-represented in the assigned risks pool – but almost twice as likely as their white counterparts to secure market insurance and leave the ARP, according to research by the Solicitors Regulation Authority.

The ARP is the insurer of last resort for law firms that cannot obtain insurance on the open market, and charges punitive premiums.

Last month the SRA announced plans to close the pool from 2013.

The SRA’s equality impact assessment of this proposal indicated that BME firms account for 28% of ARP practices, despite comprising only 11% of firms overall.

However, 27% of these BME firms then go on to obtain insurance cover and exit the pool, compared to only 15% of white firms.

Similarly, just 29% of BME firms are closed while in the ARP, compared to 40% of white firms.

Sundeep Bhatia, Law Society Council member for ethnic minorities, said the SRA had been ‘premature’ in deciding to scrap the ARP before investigating claims made by BME firms that insurers had discriminated against them in refusing to offer insurance cover.

Bhatia said: ‘The research shows that BME firms are more successful at getting insurance cover at the 11th hour than non-BME firms, which begs the question: why were they in the ARP in the first place? Is this not discrimination?’

SRA chief executive Antony Townsend said that the SRA will ‘continue to work with equality groups to address these concerns’.

Insurers have argued that the huge costs of the ARP, borne by insurers in proportion to their share of the solicitors’ professional indemnity insurance market, have pushed up premiums and deterred them from offering solicitors’ PII.