Chancery Lane and the Sole Practitioners Group have strongly attacked proposals for the future of post-six-year run-off cover (PSYROC) and the Solicitors Indemnity Fund. In a statement responding to the opening of a Solicitors Regulation Authority consultation, Law Society president I. Stephanie Boyce said: 'The SRA has today [Tuesday] outlined its intention to make the marketplace less safe for consumers by getting rid of PSYROC and SIF.
'Solicitors want consumers to be protected and one of the things on which the profession prides itself is that it offers a service from highly trained professionals who are adequately and appropriately insured for the rare occasions something goes wrong,' she said.
'The removal of PSYROC and SIF will have a huge impact on the consumers affected. The average successful claim is over £34,000, which is a large amount of money for most people. The consumers who will suffer will employ solicitors on a reasonable assumption that they would have comprehensive protection if something went wrong.
'The SRA is suggesting that this comprehensive protection is removed, but it is yet to demonstrate that the removal of PSYROC will have any material impact on the cost of legal services or lead to any improvement in the market for legal services.
'Solicitors strive to provide the best service – but they also want the best consumer protections. It is our belief that retaining SIF would be in the best interests of consumers and the profession alike,' Boyce concluded.
Meanwhile Clive Sutton, honorary secretary of the Sole Practitioners Group, said:
'In 2020 when the SRA threatened to close the Solicitors Indemnity Fund without any ongoing protection for retired solicitors, the Sole Practitioners Group protested strongly because many of its former members would lose protection and its existing members would face the lack of protection in the future.
'It appears the SRA has reconsidered its position and produced statistics showing average payouts of £350,000 per year on an average of 10 cases being approximately £35,000 each. However without that cover this would mean 10 retired practitioners each year facing financial loss and personal stress of claims of £35,000 or more. It is for that reason that retired solicitors should continue to have protection and existing solicitors and new entrants to the profession should know that that protection will continue to cover them.
'The available funds in SIF Ltd are said to be in excess of £20 million, the income of which should be sufficient to provide a continuing fund which if operated efficiently should only lead to very modest call upon the profession.
'It is difficult to reconcile how ongoing funding of £2.4 million per year is required to deal with an average yearly payout of £350,000 or even £500,000.
'The SPG has not been directly involved since the last extension was agreed in June. The current extension expires in October 2022 and if suitable provision is not in place between the SRA and the Law Society by then then the group will again be making representations, and taking action, to ensure that retired members continue to be protected.'
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