A ‘significant’ number of firms have not notified the SRA of their situation since the 30 September renewal date
A significant number of firms that have failed to declare their insurance position to the Solicitor’s Regulation Authority (SRA) could face enforcement action, the regulator has warned.
The companies have not provided the SRA with concrete evidence of having secured a new professional indemnity insurance policy since the renewal date of 30 September.
The firms were discovered through several data-matching exercises carried out by the SRA and are in addition to the 141 facing closure that the SRA wrote to last month to advise of what they must do next.
Any firm that is unable to get insurance by 29 December will have to close down.
SRA director of supervision Mike Haley said: “We have identified a number of firms that have not found a new insurer and failed to notify us of their position.
“Given this failure, those firms are considered to be at risk of failing to obtain new insurance or wind-down in an orderly fashion by 29 December.
“As we warned in November, failing to notify us is a breach of the SRA Indemnity Insurance Rules 2012 and enforcement action will be considered.”
The regulator declined to say exactly how many firms could be at risk of facing enforcement, but says the number of firms captured by the exercise is changing every day.
The SRA is now working with firms that have not yet managed to find cover to ensure all contingencies are planned for and any wind-down as a result of failing to find insurance is managed in an orderly way.