Simon Love assesses the proposed new role for SRA Compensation Fund
The Solicitors Regulation Authority (SRA) Compensation Fund is a central element of the regime by which the solicitors profession protects the financial interests of its clients. Economic hard times have increased the fund’s workload: mortgage lenders have brought high volumes of claims against solicitors arising out of fraudulent transactions, and following declinature of cover by the firms’ professional indemnity insurers, many of those have been switched to the fund; the recession has caused the failure of a number of law firms; and planned changes to the profession’s indemnity insurance arrangements will impact further on the fund and present fresh challenges.
In this article I will take a look at the Compensation Fund, its rules and how it operates at present. I will then go on to highlight the planned changes to the operation of the fund, the background to those, and the impact on the fund in the future.
SRA Compensation Fund
The Compensation Fund is a discretionary scheme established under the Solicitors Act 1974, from which a grant may
