Solicitors Indemnity Fund extended for 12 months while industry develops “viable alternative scheme”

The Solicitors Indemnity Fund (SIF) will be extended for a further 12 months following concerns that lawyers could be left personally liable for historic claims, it has been confirmed.

According to the Law Society for England and Wales and the Solicitors Regulation Authority (SRA), the scheme will now run until at least September 2022 while steps are taken to protect the industry.

The SIF was launched in 2000 to provide supplementary run-off cover for firms that have closed and whose mandatory six-year run-off cover has come to an end – meaning former clients have a means to redress even if a solicitor is no longer practising.

But the fund was set to close on 30 September 2021, leaving former partners of law firms liable to historic claims relating to work such as property, Wills and trusts, child personal injury settlements, or family law.

In response to concerns, the SRA has now confirmed that the SIF will be extended for 12 months to allow stakeholders to develop alternative forms of cover.

“We will now work to explore next steps and I would strongly urge those affected to continue to engage in our work as it develops,” said Anna Bradley, Chair of the SRA Board.

Welcoming the news, the Law Society said the extension will give former owners of law firms time to arrange alternative cover but warned the industry must “act quickly” to develop a “viable alternative scheme”.

“We have been raising our concerns with the SRA, the regulator for this issue, for more than three years. We are pleased they are now taking steps to find an effective solution and undertake the detailed analysis required to assess the future of post six-year cover,” said Law Society president I. Stephanie Boyce.

“We urge the SRA to work hand in hand with the Law Society, the insurance industry and others to find a long-term solution to the problem of run-off indemnity cover. It needs to show imagination in looking at long-term solutions that provide proper levels of consumer protection, and that do not expose solicitors to ruinous claims or consumers to potentially lengthy and complex litigation.”

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