The Solicitors Regulation Authority’s (SRA) proposals for a new post six year run-off cover (PSYROC) scheme should secure long-term consumer protection, the Law Society has said in response to a consumer-focused consultation. The SRA is proposing to run its own scheme to replace the Solicitors Indemnity Fund, which is scheduled to close next year.
Society President Lubna Shuja said the SRA’s proposed scheme ‘will enable consumers to claim compensation if there is a rare occasion when something goes wrong many years after a solicitor has provided legal advice’.
However she cautioned that any new supplementary run-off cover arrangement must meet three key principles.
‘First, any new arrangement should continue to run as an indemnity scheme, which could be funded on an ongoing basis through a mandatory levy on firms. Expert analysis carried out on behalf of the SRA suggests that this should cost less than £240 per firm per year, which is unlikely to affect the price of legal services for consumers.
‘Second, any residual funds from the Solicitors Indemnity Fund (SIF) should be ring-fenced for the specific purpose of dealing with PSYROC claims, for the benefit of consumers and solicitors.
‘Third, any new arrangement should provide the same scope of indemnity cover that is currently provided by SIF.
‘We believe the proposals set out by the SRA for a new PSYROC scheme, operating under their direct control, could meet these requirements and if that is achieved, we support the SRA’s proposed approach,’ Shuja said.
‘We look forward to working constructively with the SRA on the future of this important consumer protection. We expect further explanation of the basis on which the new scheme will operate to be included in the SRA’s rule change application to the Legal Services Board, which will be the next major step towards ensuring the new arrangements are in place by 1 October 2023.’
Chancery Lane’s position appears to be in marked contrast to that of five regional law societies, which last week condemned the proposals as a ‘hasty decision that could be regretted both by consumers and the profession’.
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