Over 100 law firms have less than two weeks to obtain professional indemnity insurance (PII) failing which they must close their practice by 29 December, the Solicitors Regulation Authority (SRA) announced today (18 December).
The regulatory body has identified a total of 117 law firms still requiring insurance as of 16 December – none of which have been allowed under PII regulations to bring in new business since 1 November – and is helping them to prepare for closure.
The SRA said that it has sent a compliance plan to 108 of the 117 firms and that 94 of those have signed and returned the plans. ‘Disciplinary action will be considered for firms that delay in returning signed compliance plans or firms that fail to give the required regular updates to the SRA of their position,’ a SRA statement said today.
SRA director of supervision Mike Haley added: ‘Some firms are better than others when it comes to addressing all the issues associated with an orderly wind-down, for example ensuring archived files are stored properly. We continue to work with firms to remind them of their responsibilities and the approaching deadline for closure.
‘All of these firms are aware that they should not be carrying out any work on behalf of clients beyond 29 December as they would be doing so without insurance, so all live client matters and client monies must be dealt with by that date.
‘Firms that continue to practise after 29 December or fail to wind down in an orderly fashion will be subject to swift regulatory action. Exercising our powers of intervention may be considered where it is necessary and appropriate in the public interest.’
The first cut-off date for obtaining PII came on 1 October, when 185 law firms failed to obtain insurance. Then on 31 October it emerged that 153 law firms had entered a 60-day ‘cessation period’, since when those that have not obtained PII have only been able to run off existing instructions and generate no new business.