To notify or not
We are often asked by our Insured clients as to when they need to notify a claim under the terms of their professional indemnity policy…
Published 20 June 2016
Despite calls from the Law Society to extend SIF cover by a further three years to 2023, the SRA Board, on 9 March 2016, announced its decision to end the existing SIF arrangements in 2020.
Currently, any firm that has closed since September 2000 without a successor can resort to the old Solicitors Indemnity Fund (SIF) for any claim made after the six-year run-off period. This arrangement is due to end in 2020. SIF closed in 2000.
The SIF says it has recently “noted a significant increase in post six year run-off claims in both frequency and value requiring adjustment to its ultimate expected liability positions. This means that although SIF has sufficient financial resources to meet all expected claims up to 30 September 2020, its surplus is unlikely to be sufficient to fund any further extension beyond that date. This has been taken into account by the SRA in reaching its decision.”
Some legal commentators have described the decision not to extend post-six-year run-off protection after 2020, as “real concern”. However, this ignores:
Whatever the end result might be, this decision comes as a timely reminder to any firm and/or individual(s) who may be thinking of retiring or selling their practice to be alive to the implications of long term liabilities and plan accordingly to manage potential exposure.