Law firms will now only be required to hold professional indemnity cover of £500,000 after the Solicitors’ Regulation Authority (SRA) changed its regulations.
The mandatory minimum level has been slashed from £2 million as part of the Authority’s Regulatory Reform programme aiming to create a more efficient, stream-lined and cost-effective system of regulation.
Law firms will now have to get cover at an amount appropriate to the level of business they conduct.
The SRA is hoping that this move will eliminate reliance on the minimum level specified even when it might have been too low, while taking the burden off small firms that undertake low value transactions for consumers.
SRA Chair, Charles Plant, said: "All legal services regulators face a challenge to remove unnecessary and or disproportionate regulatory burdens on firms in the legal sector and promote innovation, competition and growth in the market.
Our reform programme aims to make the SRA’s regulation more proportionate and better targeted, while maintaining critical protections for consumers.
The Legal Services Board will agree the changes before they are published in the SRA’s next handbook, set for publication this October.
Other proposed changes to indemnity insurance have been deferred until 2015.
