SRA abandons plans to reduce grants from Compensation Fund
This u-turn has been welcomed by The Law Society for England and Wales.
A spokesperson for the Law Society commented:
“We are pleased to hear that the SRA has decided not to reduce the single claim limit of the Compensation Fund from £2m to £500,000.
“In our response to the SRA’s consultation on changes to the Compensation Fund, we insisted the proposed cap was unnecessary. According to their own data, the average grant from the Fund is £20,000, with 75% of grants under £5,000. So, in practice the number of applications likely to be affected by a £500,000 ceiling would have been very low.
“But, at a time when other professional compensation schemes, such as the Financial Ombudsman Service, are increasing their maximum payouts, this change would have sent entirely the wrong message to consumers, undermining public confidence in the profession, and legal services more generally.
“Solicitors pride themselves on having high levels of consumer protection for their clients, the proposal to lower the Fund would have left consumers exposed to greater risk.
“It is a matter of principle that people defrauded by their solicitor should be eligible to apply for compensation, regardless of their means or perceived deservedness.
“We are happy to see the SRA has made the right decision in this matter, and recognised the paramount importance of its role protecting the interest of the consumers of solicitors’ legal services.”