In troubling news for the profession, the Solicitors Regulation Authority SRA has discovered a number of firms that did not enter the extended policy period (EPP) appear to have failed to declare their insurance position.
These firms were discovered through a number of data-matching exercises carried out by the SRA.
The firms in question have not provided the SRA with concrete evidence of having secured a new professional indemnity insurance policy since the renewal date of 30 September.
They are additional to the 141 that notified the SRA that they would enter the extended policy period (EPP) as they had definitely failed to find insurance before the renewal date.
All firms in question have been contacted and the SRA is considering possible enforcement action.
Mike Haley, SRA Director of Supervision, said: "We have identified a number of firms that have not found a new insurer and failed to notify us of their position.
“Given this failure, those firms are considered to be at risk of failing to obtain new insurance or wind down in an orderly fashion by 29 December."
Failure to notify the SRA is a breach of the Indemnity Insurance Rules 2012 and enforcement action will be considered.
The SRA is continuing to work with firms definitely in the EPP as the end date approaches to ensure all contingencies are planned for.
Supervisors have been agreeing compliance plans to ensure clients’ interests are protected as the firm winds down in an orderly way should they not be able to secure a new policy.
Guidance on orderly wind-downs is available here.
