After extensive lobbying from the Law Society and other stakeholders, the Solicitors Regulation Authority (SRA) has announced it is deferring the closure of the Solicitors Indemnity Fund (SIF) by 12 months, until September 2023.
The move comes after the SRA launched a consultation in November 2021 where it sought views from the profession about the future of SIF, which currently provides supplementary run-off cover for firms that have closed, ensuring ongoing long-term protection for clients.
The Law Society campaigned intensively for the continuation of SIF, arguing closure would have a detrimental impact on consumers, leaving them unable to seek redress on the rare occasion something goes wrong.
The SRA had previously indicated its preferred option was to close SIF, claiming the cost of running it was disproportionate to the consumer benefit it delivers in terms of volume and value of claims.
Law Society of England and Wales president, I. Stephanie Boyce, said:
“We are delighted the SRA has listened to our concerns about closing SIF and has instead given the fund another chance.
“In the lead up to September 2023, the solicitors’ regulator will refrain from deciding on SIF’s future while further work is done on whether consumer protection can be delivered in a more cost-effective way.
She added that possible alternatives to SIF ‘include making changes to how the fund is set up and operated, reducing the scope of protection it gives, or finding a different consumer protection vehicle funded via SIF’s surplus – which may also be subsidised by the profession’.
The Law Society added that it ‘stands ready to support the SRA’ as it explores further options.