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Georgia Owen

CLC welcomes SRA plans

Georgia Owen

14
Jul

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The Council for Licensed Conveyancers has issued a response to the SRA’s proposal to remove barriers between regulators.

Yesterday, the Solicitors Regulation Authority set out its plans to amend the indemnity insurance rules, making it easier for firms to change who they were regulated by.

Under the current rules, six years’ run-off cover for professional indemnity insurance must be obtained by a firm before they are able to move to another regulator. As indemnity insurance requirements vary, this can act as a barrier for switching, as firms may need to have dual cover in place.

The proposed change will mean that run-off cover will not necessarily need to be triggered when a firm changes to another regulator. It will then be the new regulator who is responsible for ensuring adequate indemnity insurance is available.

Issuing a response to the SRA’s plans was the Council for Licensed Conveyancers, who welcomed the proposals. They stated:

‘The CLC is pleased that the SRA has decided to remove a barrier that has prevented lawyers from exercising their right to choose the most appropriate regulator for their business. The CLC’s regulation of specialist conveyancing and probate lawyers delivers high standards of consumer protection and supports innovation in the delivery of legal services.

‘The freedom to choose regulator was created by the Legal Services Act 2007 but was not a practical option for SRA-regulated firms because of the SRA’s requirement that a firm transferring to another regulator should take out run-off professional indemnity insurance cover as if it was closing. This made transfer between regulators prohibitively expensive. Now that requirement will be lifted, subject to approval by the Legal Services Board, by  1st October 2017.

‘We are already working with a number of firms who have been waiting for this announcement from the SRA. Any other firm considering moving into the CLC’s regime for specialist conveyancing and probate lawyers should contact us as soon as they begin to think about the possibility.

‘We always advise firms to discuss their plans with us at an early stage so that we can give them guidance about the best way to take their application forward and whether CLC regulation is right for their firm. This is just as important for established firms looking to move between regulators as for start-ups just entering the market.’

The change still needs to approved by the Legal Services Board before it can come into effect.

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