The Solicitors Regulation Authority (SRA) has refused to back down over its controversial call for a £500,000 professional indemnity minimum limit.
Its proposal, first mooted in July, was put on hold last month when the Legal Services Board (LSB) requested more time to review the implications and suggested it might consider approval if the SRA dropped its plans to replace the current £2m minimum cover limit.
However, the SRA reiterated its stance in a letter to the LSB last week, in which SRA chief executive Paul Philip said: “We would like to make clear that we see the proposal as one change.”
Philip said: “The current level of cover is an arbitrary, generic level set several years ago with an un-evidenced distinction between partnership and limited liability law firms.”
Frank Maher, partner, Legal Risk, who is opposed to a £500,000 minimum limit, says: “I think it is important that the scheme is considered as a whole, not on a piecemeal basis, and that there is a proper opportunity for debate which we did not have when the proposal for reduction was considered over the summer.
“The issue goes wider than the public interest. Solicitors and their staff are also affected, their interests are a material consideration under s 37 of the Solicitors Act 1974, and they have been completely ignored in all the SRA’s submissions so far.”
Maher has warned the proposal could increase not reduce the cost of cover for smaller firms. The SRA’s proposals are also opposed by the Law Society.
