The Solicitors Regulation Authority (SRA) has announced that, following consultation on the future of post six-year run-off cover, it will seek a further 12-month extension to the Solicitors Indemnity Fund (SIF) so as to enable detailed consideration of key points raised in feedback. This means that as things stand, SIF will be extended to September 2023.
The consultation, which ended in January 2022, revealed that the majority of those responding did not support the SRA’s preferred option of ending the requirement for post six-year run-off cover and believed that the current system provided better protection for consumers and, if funded by the profession, would lead to minimal increases in the costs to individual consumers. This was contrary to the views held by the SRA who had serious concerns that the current costs of running the SIF are higher than they should be for the benefit delivered and that an open market solution should be explored.
The SRA has now recognised the strength of feedback that consumer protection in this area should not be removed, but has stated that it still has serious concerns and will therefore carry out further work to assess whether there are options for providing consumer protection in a more proportionate way.
Anna Bradley, Chair of the SRA, said:
‘The level and depth of feedback has been hugely helpful in giving us evidence to move our thinking forward. There was widespread agreement that providing appropriate consumer protection was key, but there is clearly still room for debate about how this might be delivered.
‘We want to work closely with stakeholders, including particularly the Law Society, to build on the constructive ideas we heard from the consultation, and explore credible, value-for-money options that could provide efficient and effective consumer protection. We can then make a decision on the long-term position.’
The Board of the SRA has asked that further policy work be undertaken, which will be brought back to it before the end of the summer. If a new arrangement were to be proposed, a further public consultation would be carried out on the detail.
Extending the SIF to September 2023 will be subject to formal approval by the Legal Services Board. Before then, the SRA will also need to obtain formal confirmation from Solicitors Indemnity Fund Limited (SIFL) that this extension is affordable without an additional levy.
A full report on responses to the SRAs consultation on future provision of post six-year run-off cover is available.