SRA consultation on protecting the users of legal services

The SRA has launched a consultation on “Protecting the users of legal services: balancing cost and access to legal services”. While most people are happy with the service they receive from solicitors and regulated law firms, things can and do go wrong. It is crucial that the public can trust that when things go wrong the right protection is in place. The principle that all regulated law firms should have a minimum level of indemnity insurance, with an additional safety net of the Compensation Fund, has served the sector well.

The analysis of 10 years of insurance claims against law firms suggests that the current approach is too rigid. The legal sector is increasingly diverse, with solicitors and firms practising in many different ways. Rules could mean some firms, particularly those working in low risks areas, are spending more on cover than is necessary. The evidence shows that this burden falls particularly heavily on small firms. Insurance rules can put new firms off entering the market – a market that the Competition and Markets Authority (CMA) has concluded needs to be more open and competitive to better serve the public.

The SRA’s proposals aim to tackle these problems by taking a pragmatic approach that gives firms more flexibility to choose the right level of insurance cover to fit their business and its customers. There would be an opportunity for firms, particularly smaller ones working in low risk areas, to reduce their insurance costs. The public could still have confidence in a minimum yet appropriate level of protection, while potentially benefiting from lower costs and more choice.

To learn more about the SRA’s proposals and contribute to the consultation process, visit the link below.

Read the Consultation Papers

Consultation response submission deadline: 15 June 2018. 

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