SRA Compensation Fund grants increase by £5 million in 2017
The SRA’s Annual Review for 2017 has found that the Solicitors Regulation Authority (SRA) awarded £15.2 million in grants from the Compensation Fund, this is a £5 million increase on 2016 figures.
The average claimant claimed £22,000, with the total number of claims in 2017 topping 2,174.
The majority of cases that claimed money from the fund involved property sale proceeds, with over £4 million being paid out to claimants.
Additionally, over £800,000 was paid to victims of mortgage fraud. Claims involving deposits for property were also paid in excess of £2.6 million.
Payments like these, along with the 35,000 ethics queries in 2016-17 regarding accounts rules and validity of practicing certificates, retainers with clients and conflicts of interest, has prompted the SRA to publish a Warning notice on solicitors providing banking facilities.
The SRA’s Annual Review for 2017 has also found that the Solicitors Regulation Authority closed 50 firms throughout the year, a 35% increase from the 37 SRA interventions the year earlier.
Furthermore, the SRA received 11,879 reports of bad behavior by solicitors. The majority involved identity theft, taking unfair advantage of a third party and incompetent, negligent or delayed client care.
In response to the review, the SRA said: “After a sharp fall in 2010/11, the number of interventions has settled at a relatively constant rate for five years.
“Although the number of interventions we carried out in 2016/17 increased, it is still around the historical average for the past five years.”
“We will improve our processes to better identify when a case is highly likely to go to the Solicitors Disciplinary Tribunal. Taking legal advice at an early stage is a more effective and streamlined way of managing our resources.
“We want to make sure there are appropriate levels of protection available for people using legal services. We will look at reviewing financial consumer protection arrangements (professional indemnity insurance and our Compensation Fund) to make sure that they are fit for purpose.”
It is estimated that the new reforms will lead to further increases in statistics like this when the 2018 report is compiled.
Will the new reforms lead to increased sanctions and fines? Do you think that this could lead to more legal service firms closing? Why do you think the compensation fund spent over £4 million in cases concerning property sales proceeds and mortgage fraud?