Who was at fault in the SRA email blunder?
Last week, many law firms across the UK received contact from the Solicitors Regulation Authority (SRA) indicating the business hadn’t renewed their PII cover, and were at risk of being shut down.
Over 1,800 firms received this email, which has now been reported as being sent by mistake.
Following the deadline date on 1st October 2014, if solicitors hadn’t renewed their professional indemnity insurance (PII) cover, they would enter a “cessation period” where they would be prevented from taking on any new business. After this extended policy period, if firms then fail to renew cover by 29th December, they would have to cease trading entirely.
Speculation has erupted as to how the issue even came about. Some experts are saying the fault may be with the solicitors themselves, and if they processed their premium payment close to the deadline, this may have caused a delay in notification being received by the SRA.
Other reports are claiming the problem may have been caused by the insurers, as inaccurate data being sent to the SRA may have led them to think the firms didn’t have the appropriate cover.
The error may have also been caused by the SRA’s alterations to their processes earlier in the year. The regulator is now reported to deem a firm as being uninsured if the insurer’s data and the SRA database aren’t matching. The following details must be accurate for the policy to be valid:
- Trading styles and associated corporate entities must be listed within the policy.
- Trading name stated must be consistent.
- The head office address and SRA number must be accurate.
A spokesperson from the Law Society has said they are discussing the mishap with the SRA directly and have advised solicitors contact their insurers to check their policy has been renewed successfully.
The SRA have released a statement claiming they only sent the email to firms for whom they didn’t obtain complete PII information. The email was apparently a simple reminder to update their policy for the coming year. In addition, many of the targeted firms are said to be an entity of a larger firm that handles the insurance cover.
Insurers reportedly did get in touch with the SRA earlier in October in order to retrieve the database and deal with any discrepancies, as a way to prevent any foreseen errors. However the SRA are said to have required permission from their legal advisers prior to releasing the information.
Who do you think was at fault in this instance? Is there anything all parties need to learn from this experience, or are there processes that could be put in place in order to prevent this occurring in the future?