The City of London Law Society (CLLS) has joined the Law Society in condemning proposals from the Solicitors Regulators Authority to lower minimum indemnity insurance cover for solicitors.
In a bid to reduce premiums and increase flexibility, the regulator has suggested reducing the £2m minimum cover level. Feedback from a discussion paper on the issue will inform formal proposals for indemnity insurance and public compensation protection early next year.
The City of London Law Society said in its latest response changes will hurt solicitors because PI insurance for solicitors in the London market is part of ‘brand solicitor’ and there are significant benefits to the profession from a strong solicitor brand’.
‘The SRA should have compelling evidence that changes will bring real net benefits to firms before making changes that risk reducing consumer protection,’ said the organisation which represents approximately 15,000 City lawyers.
The organisation said while the SRA said removing the protection for innocent partners might provide better incentive for risk management, lawyers do not need that motivation.
‘Even without that further incentive, the potential damage to reputation of a partner found to be fraudulent, or even accused of being fraudulent, is horrendous, so a real incentive exists already,’ CLLS said.
The Law Society has labelled the SRA’s ideas ‘flawed’ and said it still does not understand how solicitors’ PII works.
has joined the Law Society in condemning proposals from the Solicitors Regulators Authority to lower minimum indemnity insurance cover for solicitors.
In a bid to reduce premiums and increase flexibility, the regulator has suggested reducing the £2m minimum cover level. Feedback from a discussion paper on the issue will inform formal proposals for indemnity insurance and public compensation protection early next year.
The City of London Law Society (CLLS) said in response changes will hurt solicitors because PI insurance for solicitors in the London market is part of ‘brand solicitor’ and there are significant benefits to the profession from a strong solicitor brand’.
‘The SRA should have compelling evidence that changes will bring real net benefits to firms before making changes that risk reducing consumer protection,’ said the organisation which represents approximately 15,000 City lawyers.
The organisation said while the SRA said removing the protection for innocent partners might provide better incentive for risk management, lawyers do not need that motivation.
‘Even without that further incentive, the potential damage to reputation of a partner found to be fraudulent, or even accused of being fraudulent, is horrendous, so a real incentive exists already,’ CLLS said.
The Law Society has labelled the SRA’s ideas ‘flawed’ and said the SRA still does not understand how solicitors’ PII works.
victoria.young@legalease.co.uk