The Law Society has issued a series of warnings ahead of the closure of the Solicitors Indemnity Fund (SIF) on 30 September 2021 – a move that could leave former owners of law firms that shut in the past two decades liable for losses for any new claims.
SIF was originally due to close to new claims from 30 September 2020, but the Law Society successfully lobbied the Solicitors Regulation Authority (SRA) to delay for a year. There are now less than six months until the new closure date.
“As things currently stand, after the closure of SIF, if a firm ceased trading without a successor practice and its run-off cover has expired, and the former principals haven’t made alternative arrangements, then any new claims will be uninsured,” Law Society president I. Stephanie Boyce said.
“Make no mistake, there is a significant risk of claims arising more than six years after firms cease operations, with data suggesting over 10% of claims are made outside the SRA’s mandatory run-off period.
“If you practised in areas such as conveyancing, wills and trusts, child personal injury settlements or matrimonial property, claims can occur decades after work was completed.”