Responding to proposals to slash levels of mandatory professional indemnity insurance (PII) cover for solicitors, the Law Society has said that reducing consumer protection standards in legal services would hurt solicitors and clients alike.
The statement comes following the announcement that the Solicitors Regulation Authority (SRA) proposes reducing minimum indemnity cover from the current level of £2-3m, to between half a million and one million pounds. Access to the Solicitors Compensation Fund would also be restricted and maximum payments reduced from £2m to £500,000.
Law Society vice president Christina Blacklaws said that the proposals were “utterly misguided.”
She went on to comment:
“It’s important that the insurance standards are reviewed, but we need to get the balance right between protecting consumers, protecting solicitors and promoting a competitive insurance industry.
“Premiums already reflect levels of risk in the work a firm undertakes, and cost is front-loaded into the first £500,000 of cover, so the idea that the current system is unfairly ‘one size fits all’ is nonsense.
“Solicitors and their clients are protected by gold standard insurance, which is appropriate given the gravity of many of the issues we deal with.”
The SRA has provided no evidence to show their proposals will result in lower costs for solicitors or their clients.
Christina Blacklaws continued:
<div class=”quoteSection”>“Brokers have told the Law Society these proposals are unlikely to result in lower premiums, so it’s hard to see how clients could possibly benefit from any savings being passed on, but it’s easy to see how they might suffer.
“It’s baffling that the SRA is proposing further demolition of client protections, on top of that already on the table if proposals to allow solicitors to advise clients without the security of a law firm go ahead.
“No other profession in the UK offers their clients such comprehensive or robust protection and this is one of the distinctions that underpin public trust in the legal sector, and solicitors in particular. Let’s keep it that way.”