The Solicitors Regulation Authority have said there will be no extension to the current insurance cover for closed firms beyond the present six year run-off period.
Any practice that has shut since September 2000 without a successor currently enjoys additional professional insurance cover through the old Solicitors Indemnity Fund (SIF) for any claim made after the six-year run-off has ended. This arrangement is scheduled to end in 2020.
The SRA has been asked to increase the cover for a further three years to 2023, but its Board has decided at its meeting on 9th March not to change the current arrangements. Extension would be contrary to existing policy aims, and SIF might not have sufficient funds to cover the additional claims.
Paul Philip, SRA Chief Executive, said: “We consulted on reducing the amount of run-off cover because many see it as a barrier to closing down, and that’s still something we want to look at. Extending cover through SIF would be contrary to that aim and would be suggesting that six years run-off cover is not enough.
“Taking this decision does not change anything, the extra cover will still end in 2020. But this provides clarity for those that wanted to know what we might do.”
