After 30 September 2020, former principles of law firms without sufficient supplementary run-off cover may be personally liable for future claims.
How this will affect solicitors
After a legal firm closes, its clients and partners are protected for compensation claims by run-off cover. Run-off cover is purchased as part of the firm’s professional indemnity insurance (PII) and lasts for six years.
Insurance after this six-year period is called supplementary run-off cover and is currently funded by the Solicitors’ Indemnity Fund (SIF).
The SIF will close in September 2020 so it’s important to look at other options as soon as possible. Without cover, former principals of firms that closed after 31 August 2000, their estates, and even individual employees, may be personally liable for losses from any claims that are made.