CML’s latest publication states that the existing PII arrangements for solicitors need to be reviewed. As a result of the frequency in which claims are occurring, together with their size, some firms have encountered obstacles when trying to obtain suitable insurance. In a bid to ease this pressure the SRA is proposing that lenders should not be able to target solicitors by claiming for damages.
The current system allows lenders, as clients of the solicitors, to make a claim but the new proposals will only allow individuals to take this course of action.
The CML said:
“Lenders recognise that reform is necessary, but this should go hand in hand with tighter regulatory controls and a targeted approach to the causes of problems such as fraud and professional negligence.”
They added that the proposal to remove insurance cover for lenders does not address the problem of a high number of conveyancing claims under existing financial protection arrangements. There are also indications that if solicitors do not cover lenders they could face a significant reduction in their business as the lender may choose not to keep them on their conveyancing panels.
The Solicitors Regulation Authority want to remove cover for lenders by the beginning of October but the CML say that this is too soon. They also say: “it is too short a period for proper implementation and will cause serious detriment to solicitors and their clients. The SRA should work with all interested parties to agree a practical timetable for implementing the changes, once they have been agreed.”
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