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SRA continue with ARP actions

SRA continue with ARP actions

THe SRA have reported on their website a number of recent hearings before the SDT concerning disciplinary allegations in respect of failure to pay Assigned Risk Pool premiums following entry into the ARP pool.

 

On 2nd May, The SRA website reported at    http://www.sra.org.uk/sra/news/press/arp-enforcement-work.page

'Fifteen solicitors have had sanctions imposed by the Solicitors Disciplinary Tribunal as a result of the drive by the Solicitors Regulation Authority (SRA) to enforce payment of premiums for insurance from the Assigned Risks Pool (ARP), and fifteen more await hearings.

The SRA stepped up its efforts in taking strong enforcement measures against such firms in July 2010. Five solicitors have been suspended indefinitely by the SDT, which recommended their suspensions should not be lifted until full payment of premiums is made. Two more solicitors have been suspended for six months, another four have received fines totalling more than £20,000 and four solicitors have been reprimanded.

In all of these cases the solicitors were also required to pay the SRA’s costs of bringing the proceedings. A further 15 solicitors are awaiting dates to appear before the SDT whilst other proceedings are in the process of being lodged.

Stricter enforcement of the payment of ARP premiums was introduced as part of the Financial Protection Strategy in 2010. There were over £6m worth of unpaid premiums, a cost that's passed on to the profession.

The ARP provides Professional Indemnity Insurance to those firms that fail to secure it on the open market. The SRA is winding down the ARP and it is scheduled to close in September 2013.

Steve Wilmott, SRA Director of Intelligence and Investigation, said: "We've always appreciated that economic conditions are difficult for many firms. But we also have a responsibility to the public and the profession to ensure that appropriate action continues to be taken against those firms which owe premiums to the ARP, some of which are significant."

At the end of the last financial year, which closed on 31 March, 22 firms remained in the ARP out of 53 that applied to enter at the end of September. Of these, fifteen have decided to close, five have been granted waivers to remain in the ARP for a short period and two are in the process of securing open market insurance.

The 15 that need to close will be monitored by the SRA to ensure they shut down in an orderly and timely manner.'

The ARP provides a safety net for firms that cannot get cover from qualifying insurers or cannot reasonably afford the terms that are offered to them. Currently, a firm can stay in the ARP for 6 months, but if it is unable to obtain cover by the end of that period, will have to cease practice.

Recent difficulties in the conveyancing market have caused insurers to consider withdrawing from the market due to escalating losses, causing viability issues for smaller firms. Some commentators feel that SRA requirements to contribute to the ARP have contributed to decisions to reconsider business requirements.

For any advice and assistance for issues like these please do call Jeremy on 0844 2722322 or submit a comment below. Jeremy will come back to you at the earliest convenience.

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