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Written by rosalind renshaw

Calls are mounting for the law firms which are operating without Professional Indemnity insurance to be named.

Firms without PI will be required to shut by December 29.  

While it is known that 141 firms are definitely at risk of closure, the total number is not known, with the Solicitors Regulation Authority saying only that a substantial number of other firms without PI have been identified.

EAT’s report on Friday has led to several agents raising concerns, including the possibility of reputational damage if an agent had recommended a conveyancing firm or took a referral fee.

The SRA has not named any of the 141 firms due to be wound up by the end of this month because they have notified the Authority that they have no PI insurance.



Nor has it named any of the “substantial” number of others that have not notified the SRA, which should not be accepting new instructions, and which should be preparing for probable closure within days.

While agents are understandably anxious to know which legal firms face imminent closure, lawyers are also voicing their alarm, saying that they are unable to do accurate due diligence when sending funds to other legal firms.

On long threads on  lawyers’  forums, solicitors and conveyancers express their concerns that they may be unwittingly caught up in transactions with a firm that is about to go under – and are unable to plan accordingly.

One says: “Firms without PII have known for many months that they would be required to close. There has to be a balance between protecting the consumer and protecting the uninsured lawyers. In this case, I believe that the public should be protected; the firms have been drinking in the last chance saloon, after last orders.”

Another argues: “Sure, the public do need protecting, but I’d argue that more so do the families of the solicitors concerned – after all, both are innocent victims of events outside their control.

“For a good many it will mean losing everything – not just their income and their home, but their entire way of life and the family unit itself.”



The matter has been highlighted by the separate closures last week of two conveyancing firms, for undisclosed reasons, by the Council for Licensed Conveyancers.

One of our EAT readers took the photographs of one of the impressive looking offices belonging to Reeve Fisher & Sands, plus the notice on the door.

Comments

  • icon

    They will have known that, as if you were as smart as you thought your post was, they will have had it confirmed in writing.

    • 17 December 2013 13:14 PM
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    An what will happen when the entire chain of buyers and sellers fresh from a ruined Christmas discover that the agent who recommended them was in for a couple of hundred quid for an intro....?

    • 16 December 2013 14:50 PM
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