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Call for LSB to reject ‘costly burden’ on Compensation Fund

Call for LSB to reject ‘costly burden’ on Compensation Fund

The Law Society says the Solicitors Regulation Authority’s (SRA) decision to burden the Compensation Fund with professional indemnity insurance (PII) cover for uninsured firms should be rejected by the Legal Services Board.

In its 2012 Financial Protection Policy Statement, the SRA says it plans to end  the existing arrangement, whereby coverage is provided to uninsured firms through collective arrangements funded by the insurers. Instead, the claims would be covered by those members of the profession who complied with the rules and paid for their own insurance by transferring the cost to  the Compensation Fund.

The Law Society says the SRA’s proposal would fundamentally change the nature of the Compensation Fund, and believes it is quite wrong to do that without having completed its promised comprehensive review of the compensation fund and scope of coverage afforded to uninsured firms.

Law Society chief executive Desmond Hudson said: ‘The SRA‘s proposal to transfer cover for uninsured firms to the Compensation Fund would be a costly burden on the profession. It is quite wrong to make a change of this sort without full consultation and a detailed impact assessment’.

http://www.lawsociety.org.uk/newsandevents/news/view=newsarticle.law?NEWSID=446498

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