SRA confirms 2020 end of post run-off insurance cover
9 March 2016
SRA have confirmed that there will be no extension to arrangements providing insurance cover for closed firms beyond the current 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.
We have been asked to increase the cover for a further three years to 2023, but our Board has decided at its March meeting 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.
Views on the issue were sought last summer, but there was no consensus on the best way forward. Respondents did say that a quick decision was needed, however.
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.”
No Handbook changes need to be made because of the Board’s decision.