The Solicitors Regulation Authority (SRA) is investigating more than 80 firms over professional indemnity insurance (PII) shortcomings.
Twenty three are being probed for non-disclosure of information to PII insurers. They risk being struck off if they are found to have acted dishonesty.The figures were revealed in the minutes of the SRA’s Regulatory Risk Committee held on 28 April. A further 58 firms are being investigated for issues of non-compliance. The regulator has also sent letters of guidance to over 80 firms where formal investigation has not been necessary.
Firms must provide all material information to their insurers when they apply for PII insurance. The SRA’s enforcement team will now work to establish whether information was deliberately hidden from professional indemnity insurers by the 23 firms under investigation. Non-disclosure could make the firms’ PII policies void.
Deliberately misleading insurers could lead to a fine or letter of rebuke from the regulator. Firms could also be referred to the Solicitors Disciplinary Tribunal. “The Tribunal has unlimited fining powers and if they think someone has been dishonest, they usually strike them off,” said an SRA spokesman.
Further details of the investigations has been reported in Law Society Gazette.
“Withholding information from a professional indemnity insurer is a serious issue and could result in a policy being void from inception,” said James Burgoyne, Director – Claims & Technical, Brunel Professional Risks. “Without PII a firm is unable to practice. There have already been too many cases of firms having to close due to PII issues. As we approach the 2014 PII renewal, we urge all firms to make sure that they reveal all information in full on their proposal form.”