The Solicitors Regulation Authority (SRA) has detailed a two-year review of the SRA Compensation Fund.
The Compensation Fund is in place to replace money that a client has entrusted to a solicitor in his or her professional capacity, where the solicitor has either misappropriated or has otherwise failed to account for such money.
All firms who hold client money contribute to the scheme.
The project will look at whether or not existing compensation arrangements provide an appropriate and effective level of protection for consumers.
A scoping document outlining the process has now been published on the SRA’s website at www.sra.org.uk/sra/how-we-work/compensation-fund/Review-of-the-Compensation-Fund.page .
It shows the various stages the Authority will go through to thoroughly research the subject.
There will be three phases of the review: the landscaping phase involving analysis of both the SRA’s arrangements and the arrangements of other regulators; the research phase that will collect facts and figures on the key issues; and the consultation and report phase where recommendations will be drawn up and put in front of the relevant bodies.
Helen Herniman, SRA Director of Post Enforcement said: “We are the only frontline regulator that operates such immediate compensation arrangements and solicitors should take pride in the fact that they contribute to such a fund.
“The majority of solicitors carry out their duties involving client money with the integrity expected, but unfortunately there’s a small percentage which doesn’t and they present a great risk to the public.
“The SRA Compensation Fund allows us to minimise the loss and inconvenience to clients when things go wrong.”
Agnieszka Scott, SRA Director of Policy and Strategy added: “It’s because the fund provides such important protection for clients that we are carrying out this review to ensure that whatever arrangements are in place in the future are appropriate.”