Solicitors will be able to switch regulator more easily after proposed changes to professional indemnity insurance rules were announced by the Solicitors Regulation Authority (SRA). Firms will no longer need to buy six years’ run-off cover if they move regulator. This removes a barrier to switching, as under the old rules firms could have been made to pay for two insurance policies to meet the requirements of their old and new regulators.
The move has been welcomed by the Council for Licensed Conveyancers (CLC) which regulates specialist conveyancing and probate lawyers. “The CLC is pleased that the SRA has decided to remove a barrier that has prevented lawyers from exercising their right to choose the most appropriate regulator for their business,” it said in a statement. “We are already working with a number of firms who have been waiting for this announcement from the SRA.”
Crispin Passmore, SRA Executive Director of Policy, says the move will encourage competition. “The current approach makes it difficult for firms to be able to switch to the regulator they feel is right for their business. This change would give firms that choice, encouraging a modern, competitive market that provides affordable and accessible services for the public and businesses.”
Responsibility for making sure that adequate professional indemnity insurance is in place to cover work carried out by a firm before the switch will pass to the new regulator. The SRA says it is working with other regulators to put in place a framework to share information when a firm wants to move.
The new rules are subject to approval by the Legal Services Board (LSB), which is expected to be granted in time for this year’s professional indemnity insurance renewal.
“Firms have been able to choose the most appropriate regulator for their business since the passing of the Legal Services Act 2007,” said James Page, Director – Client Servicing, Brunel Professions. “But until now it hasn’t really been practical, because the cost of buying run-off insurance cover and taking out additional professional indemnity cover was prohibitively expensive. I think we will now see an increasing number of firms switching regulator and we are on hand to help them arrange their new insurance.”
Brunel Professions is a leading provider of PII insurance broking to the legal profession. To find out more call James Page on +44 (0)117 325 0947.