Hundreds of Law Firms face closure after failing to secure insurance
More than 5 per cent of firms are facing forced closure by the Solicitors Regulation Authority (SRA) after failing to find insurance cover, risk experts claim, amid fears that practising certificate fees could jump to deal with rising intervention costs.
The volume of potential closures has thrown questions over the ability of the watchdog to fund such a wide-ranging crackdown. But SRA officials maintain sufficient resources are allocated, with the budget for interventions being picked up by the profession’s compensation fund.
Authority officials revealed yesterday that “a substantial number of firms” had not been able to obtain professional indemnity insurance by the regulator’s 6 November deadline. The SRA refused to specify an exact figure, with a spokesman saying it was “changing every day”.
However, specialist indemnity lawyers suggested the number across England and Wales was worryingly high.
“An SRA official has said publicly that the figure is at least 470 firms,” Frank Maher, a partner at Liverpool-based law firm Legal Risk, told The Lawyer.
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