SRA 'considers scrapping planned closure of ARP'

18/03/2010

Written by Tom Davis

The Solicitors Regulation Authority (SRA) has announced that "in principle" it will agree to halt its potential planned closure of the assigned risks pool (ARP), it has been reported.

However, according to the Law Society Gazette, the SRA will push ahead with tightening the rules on eligibility to access the ARP and the length of time companies will be able to stay in it.

The ARP is the last resort for "distressed" solicitor firms who are unable to secure mandatory professional indemnity (PI) insurance on the open market.

From October, a modified ARP will not be accessible to new start-up firms, while distressed firms will only be able to stay in the pool for 12 months, down from 24 months previously.

Marc Riches, director at PYV Legal, said "Whilst it seems the ARP may survive, these changes mean that this year firms must still be in the absolute best possible position to make sure PI cover can be secured. The ARP is now less able to offer distressed firms a breathing space and after 12 months if cover cannot be sought then the likelihood is that practices will have to close. Engage with your Broker as early as possible to give yourselves the best chance in what looks to be potentially a very difficult market ahead"


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