Plans to reduce the level of professional indemnity insurance (PII) cover required by solicitors have been put on hold by the Solicitors Regulation Authority (SRA). The regulator had been expected to make moves to reduce the minimum PII cover from £2 million to £500,000.
Now the SRA says that it is focusing on making reforms to the Solicitors’ Compensation Fund. Speaking at a conference in Birmingham, SRA chief executive Paul Philip said this had to take priority in a crowded to-do list.
There is speculation that the changes may be postponed for some time. The Law Society Gazette reported Paul Philip as saying he had “no commitment at the moment to doing anything” with PII reforms.
The regulator originally raised but ultimately decided not to reduce the level of PII cover to £500,000 in 2014. In March 2018, it appeared to be revisiting the issue. It consulted on proposals with the Solicitors’ Compensation Fund and the PI insurance market, fuelling speculation that changes were coming. In the consultation the SRA said it wanted to reduce the cost of PII for firms working in low risk areas.
“A reduction in the minimum level of PII insurance might have been good news for smaller firms, who could have seen their cost of cover reduced, but that now looks unlikely to happen,” said James Burgoyne, Director – Claims & Technical, Brunel Professions. “However, it would have made no difference to larger firms, who often take out cover well above the minimum because of their greater risk exposures – not to mention the commercial requirements of their clients.”
Brunel Professions is a leading provider of PII insurance broking to the legal profession. To find out more call Mark Sommariva on 0203 475 3275.