Assessment period for PII reforms extended by LSB
13th Aug 2014
The Legal Services Board (LSB) has extended the assessment period for a proposal they received from the Solicitor’s Regulation Authority (SRA) on 15 July to reduce the minimum level of PII cover to £500 000. The LSB was given an initial 28-day timeframe in which to assess the application. An initial assessment was completed, but Chris Kenny, chief executive of the LSB, told the SRA that because of the complex issues raised, additional time would be required to assess it properly.
The Legal Services Board now has until 12 October, a 90-day deadline, to make a decision or issue a warning notice.
A list has been published by the LSB of stakeholders who oppose the SRA’s plans to reduce the minimum level of PII cover, currently a source of controversy.
Previous resistance to the SRA’s proposals have been voiced by The Law Society, the Legal Services Consumer Panel, and other experts. Now, 26 law firms have added their own concerns to the ongoing argument, along with other top insurers, mortgage lenders, and building societies.
Jenny Screech, solicitor and legal professions manager at Zurich Insurance, states that there is ‘no credible evidence’ that a reduction in the minimum level of PII cover will in turn lead to savings for the clients, while Robin Fieth, chief executive of the Building Societies Association, believes that this change could force some companies to reduce the size of their legal panels, which would then reduce both the risk, and the administrative problems that could occur.
Crispin Passmore, executive director for policy of the SRA, responded to the concerns and queries by re-affirming the idea that reducing minimum PII cover will mean consumers do not have to pay for an unnecessarily high level of cover.
Passmore also notes that this extension of the assessment period is not an unusual move for the LSB. The SRA hopes for a positive decision by the end of August, which would allow the rules to come into effect by 1 October this year. For now though, he states, ‘the ball is very much in the court of the LSB’.