Source: http://www.sra.org.uk/solicitors/guidance/change-tracker/indemnity-insurance/indemnity-insurance-rules.page
Timestamp: 2019-02-23 10:34:06
Document Index: 402126046

Matched Legal Cases: ['art 3', 'art 2', 'art 3', 'art 1', 'art 2', 'art 3', 'art 4', 'art 1', 'art 3', 'ART 3', 'art 4', 'art 4', 'art 4', 'art 4', 'art 4']

SRA | Change tracker – Solicitors' Indemnity Insurance Rules | Solicitors Regulation Authority
Change tracker – Solicitors' Indemnity Insurance Rules
[;BEGIN MATTER INSERTED ON 1 OCTOBER 2011;] The Solicitors' Indemnity Insurance Rules 2010 is replaced by the SRA Indemnity Insurance Rules 2011 as of 1 October 2011. [;END INSERTED MATTER;]
[; BEGIN MATTER INSERTED ON 1 OCTOBER 2010 ;]The Solicitors' Indemnity Insurance Rules 2009 were replaced on 1 October 2010 by the Solicitors' Indemnity Insurance Rules 2010. [; END INSERTED MATTER ;]
The Solicitors' Indemnity Insurance Rules 2008 were replaced on 1 October 2009 by the Solicitors' Indemnity Insurance Rules 2009.
[;BEGIN MATTER INSERTED ON 31 MARCH 2009 BY THE SOLICITORS' ACCOUNTS (LEGAL SERVICES ACT) AMENDMENT RULES 2009;] The Solicitors' Indemnity Insurance Rules 2008 were amended on 31 March 2009 as part of a general updating of the rules to introduce firm-based regulation and legal disciplinary practices as provided for in the Legal Services Act 2007. [;END INSERTED MATTER;]
The Law Society introduced arrangements for solicitors' professional indemnity insurance with effect from 1 September 2000 which achieved broad coverage for the profession and its clients, whilst at the same time allowing the profession access to a competitive, commercial insurance market.
At its meeting on 13 April 2000, the Council of the Law Society resolved, among other matters, that:
With effect from 1 September 2000, the regulated profession in private practice will be required under the Solicitors' Indemnity Insurance Rules 2000 to secure professional indemnity insurance complying with certain Minimum Terms and Conditions, from any of the Qualifying Insurers.
Each Qualifying Insurer will be required to enter into a Qualifying Insurer's Agreement with the Law Society.
The Solicitors' Indemnity Insurance Rules 20[; BEGIN MATTER DELETED ON 1 OCTOBER 2010;]08[; END DELETED MATTER ;][; BEGIN MATTER INSERTED ON 1 OCTOBER 2010 ;]10 [; END INSERTED MATTER ;] were approved by the [; BEGIN MATTER DELETED ON 1 OCTOBER 2010;]Council on 22 May 2008, and[; END DELETED MATTER ;] [; BEGIN MATTER INSERTED ON 1 OCTOBER 2010 ;]Board of the Solicitors Regulation Authority (SRA) with the concurrence of the Legal Services Board. They [; END INSERTED MATTER ;] apply in respect of the indemnity period beginning on 1 October 20[; BEGIN MATTER DELETED ON 1 OCTOBER 2010;]08[; END DELETED MATTER ;][; BEGIN MATTER INSERTED ON 1 OCTOBER 2010 ;]10 [; END INSERTED MATTER ;].
2 Summary of the arrangements
Principals in private practice are free to secure professional indemnity insurance either by dealing direct with Qualifying Insurers or via their insurance brokers or other intermediaries. The Solicitors Indemnity Fund (SIF) has not underwritten new risks since 1 September 2000 but continues to run off the existing claims account. Since 1 September 2007, it has also provided cover in respect of firms which ceased to practise on or after 1 September 2000 without a successor practice (as defined in clause 8.2 of the Minimum Terms and Conditions), after the six-year run-off cover provided under their qualifying insurance has expired.
Evidence of professional indemnity insurance that complies with the Minimum Terms and Conditions is a requirement for obtaining a practising certificate. Solicitors are not permitted to practise without current professional indemnity insurance in force.
Each firm is obliged to arrange its professional indemnity insurance with one or more Qualifying Insurers, or to be admitted to the Assigned Risks Pool (see paragraph 4 below). That insurance must comply with the Minimum Terms and Conditions set out in Appendix 1 to the Rules.
The Rules require firms to take out a policy which includes cover in accordance with the Minimum Terms and Conditions for that part of their practice carried on from offices located in England and Wales. They do not apply to any part of the practice of the firm carried on from offices located outside England and Wales (although rule 15 of the Solicitors' Code of Conduct 2007 does apply in such cases). However, the cover in relation to the practice carried on from offices located in England and Wales must extend to acts or omissions wherever in the world they occur, and wherever in the world the claim is brought.
Each firm which is not a body corporate is required to secure professional indemnity insurance with Qualifying Insurer(s) to a limit of indemnity of £2,000,000 any one claim. Most bodies corporate, such as LLPs, are required to obtain such insurance with Qualifying Insurer(s) to a limit of indemnity of £3,000,000 any one claim.
Cover in excess of these amounts (top-up cover) is not subject to the Rules, and firms are free to make whatever arrangements they wish. Firms should always consider whether the minimum level of cover is adequate for their needs. Arrangements for top-up cover may be made with any insurer, not just a Qualifying Insurer.
Firms are free to negotiate with Qualifying Insurer(s) the level of excess - i.e., the amount of each claim that the firm itself would have to meet - that applies to their policy. The Minimum Terms and Conditions provide that, if a firm does not pay the part of any claim covered by the excess, the insurer will pay that part of the claim, but recover that amount from the Principals of the firm.
The Minimum Terms and Conditions require that a policy of Qualifying Insurance must provide at least 6 years' run-off cover if the firm's practice ceases during an indemnity period. However, if there is a "successor practice" (as defined in clause 8.2 of the Minimum Terms and Conditions) to that firm's practice, no run-off cover will be triggered. Instead, the Qualifying Insurance of the successor practice will be required to cover claims against the ceased practice. Under Rule 12.6, the Council may determine the eligibility of any successor firm for the purposes of the Assigned Risks Pool (see paragraph 4 below).
3 Minimum Terms and Conditions
In exercising its statutory functions the Law Society must act in such manner as it reasonably believes to be in the public interest. To this end the Council resolved on 23 June 1999 that the Society would, so far as possible, seek to replicate in the current arrangements the breadth of cover formerly provided by SIF.
The Minimum Terms and Conditions are not drafted as a policy, but rather as an expression of the scope of minimum coverage to be afforded to firms in respect of their regulated business. Qualifying Insurers are free to issue their own policy so long as they provide at least the coverage set out in the Minimum Terms and Conditions. As a safety net for both the public and for firms, Qualifying Insurers have committed that the coverage set out in the Minimum Terms and Conditions will apply as a minimum, regardless of the wording of the policy actually issued. The Minimum Terms and Conditions appear as Appendix 1 to the Rules.
4 The Assigned Risks Pool
It is recognised that some firms may not be able to secure terms from Qualifying Insurers, or may not be able reasonably to afford those terms which are available to them. This might be as a result of a poor claims record, a major claim being outstanding but not yet decided, or other risk factors. It is not the intention for such firms to be left without cover, at least in the short term. To this end, an Assigned Risks Pool (ARP) has been established to accept those risks which fall into this category.
Firms may [; BEGIN MATTER INSERTED ON 1 OCTOBER 2010 ;]not [; END INSERTED MATTER ;]be insured through the ARP for [; BEGIN MATTER INSERTED ON 1 OCTOBER 2010 ;]more than, in aggregate, 12 [; END INSERTED MATTER ;][; BEGIN MATTER DELETED ON 1 OCTOBER 2010;]a maximum of 24[; END DELETED MATTER ;] months in any [; BEGIN MATTER INSERTED ON 1 OCTOBER 2010 ;]four consecutive indemnity [; END INSERTED MATTER ;][; BEGIN MATTER DELETED ON 1 OCTOBER 2010;]five year[; END DELETED MATTER ;] period[; BEGIN MATTER INSERTED ON 1 OCTOBER 2010 ;]s [; END INSERTED MATTER ;][; BEGIN MATTER DELETED ON 1 OCTOBER 2010;] (or 25 months in the case of a firm insured through the ARP for the whole of the indemnity period from 1 September 2003 to 30 September 2004)[; END DELETED MATTER ;]. Those firms receiving cover under the ARP will be required to pay a high premium, will be inspected and monitored (at the firm's expense), and may be required to attend approved courses and to implement specified practice management measures. It is envisaged that firms will apply for cover in the ARP only if they are unable to obtain insurance from a Qualifying Insurer in the open market. If a firm which has been insured through the ARP is unable to obtain cover with a Qualifying Insurer in the open market by the end of the maximum permitted period, the firm will have to cease practice.
The cover provided through the ARP is underwritten by each Qualifying Insurer in the same proportion as its proportion of premium income from underwriting the compulsory cover bears to the total of all premium income written by all the Qualifying Insurers for the compulsory cover in the indemnity period in question.
The premium for entry into the ARP is calculated in accordance with a formula set out in Appendix 2 to the Rules, and is based on a firm's gross fees. An additional premium is payable in the event that run-off cover is triggered.
In certain circumstances (for example, where a firm without Qualifying Insurance fails to apply to be insured through the ARP within the time period specified in the Rules), a default premium, 20% higher than the normal ARP premium, will be payable for the whole of the indemnity period in question.
In addition, in keeping with the duty to safeguard the interests of the public, the ARP will cover claims against firms which do not, for whatever reason, secure their own insurance arrangements in accordance with the Rules, including run-off cover in the case of firms which have no policy of qualifying insurance in place when they cease practice. Where firms fail to effect cover, however, the ARP Manager is entitled to recover the amount of any claims and any associated costs, plus interest, from the principals of the firm concerned.
The ARP is managed by a manager appointed by the [; BEGIN MATTER INSERTED ON 1 OCTOBER 2010 ;]SRA [; END INSERTED MATTER ;][; BEGIN MATTER DELETED ON 1 OCTOBER 2010;]Solicitors Regulation Authority[; END DELETED MATTER ;]. The functions of the ARP manager are currently carried out by Capita Commercial Insurance Services Limited on behalf of the [; BEGIN MATTER INSERTED ON 1 OCTOBER 2010 ;]SRA [; END INSERTED MATTER ;][; BEGIN MATTER DELETED ON 1 OCTOBER 2010;]Solicitors Regulation Authority[; END DELETED MATTER ;].
5 Arrangements with [; BEGIN MATTER DELETED ON 1 OCTOBER 2010;]St Paul [; END DELETED MATTER ;]Travelers
The Law Society has entered into a joint venture with [; BEGIN MATTER DELETED ON 1 OCTOBER 2010;]St Paul [; END DELETED MATTER ;]Travelers. The purpose of these arrangements is to ensure that cover is offered to all sectors of the profession, alongside the commercial market. That does not mean that every firm will necessarily receive a quotation. [; BEGIN MATTER DELETED ON 1 OCTOBER 2010;]St Paul [; END DELETED MATTER ;]Travelers - like any other individual Qualifying Insurer - is free to reject firms [; BEGIN MATTER INSERTED ON 1 OCTOBER 2010 ;]for reasons particular to that firm such as a poor premium payment record [; END INSERTED MATTER ;][; BEGIN MATTER DELETED ON 1 OCTOBER 2010;]with unacceptable claims records[; END DELETED MATTER ;]. But it will [; BEGIN MATTER INSERTED ON 1 OCTOBER 2010 ;]not [; END INSERTED MATTER ;]exclude [; BEGIN MATTER INSERTED ON 1 OCTOBER 2010 ;] a [; END INSERTED MATTER ;]firm[; BEGIN MATTER DELETED ON 1 OCTOBER 2010;]s only if their individual record is unacceptable, not [; END DELETED MATTER ;] because of the type of firm that they are, or the type of work that they do.
6 Changes for the 20[; BEGIN MATTER INSERTED ON 1 OCTOBER 2010 ;]10 [; END INSERTED MATTER ;][; BEGIN MATTER DELETED ON 1 OCTOBER 2010;]08[; END DELETED MATTER ;]-20[; BEGIN MATTER INSERTED ON 1 OCTOBER 2010 ;]11 [; END INSERTED MATTER ;][; BEGIN MATTER DELETED ON 1 OCTOBER 2010;]09[; END DELETED MATTER ;] Indemnity Period
[; BEGIN MATTER INSERTED ON 1 OCTOBER 2010 ;]
A number of small amendments to the Rules have been made this year. As well as the normal annual date changes, the following changes have been made:
The definition of "Eligible Firm" at Rule 3 has been amended to make it clear that a Firm is not eligible for cover from the Assigned Risks Pool indefinitely, to set out the new maximum time that a Firm may obtain cover in the Assigned Risks Pool and to prevent Firms which are unable to obtain cover outside of the Assigned Risks Pool from commencing business;
The commentary to Rule 6, in relation to the insolvency of a Qualifying Insurer, has been amended to make it clear that it ceases to be a Qualifying Insurer for the purposes of writing new policies and the Firms insured by that Insurer must seek alternative cover;
The Rules (in particular, Rule 10.2) relating to applying to the Assigned Risks Pool have been amended to make it clear that a Firm wishing to commence Practice may not do so without first obtaining Qualifying Insurance outside the Assigned Risks Pool;
The Rules and the Minimum Terms and Conditions have been updated to incorporate references to the office for Legal Complaints (including the Legal Ombudsman) where appropriate; and
The Minimum Terms and Conditions contained in Appendix 1 to the Rules have been amended:
for the establishment of the new office of the Legal Ombudsman to provide that an Insurer is liable for certain awards made by the Legal Ombudsman but that an Insurer will have no liability in respect of a determination by the Legal Ombudsman for a Firm to refund any fees paid to an Insured;
to allow Firms that would normally be the subject of a Succession to elect to be either insured under the run-off cover set out in paragraph 5.1 of the Minimum Terms and Conditions, or insured as a Prior Practice (provided there is appropriate insurance in place in relation to that Successor Practice). The definition of "Prior Practice" has been amended accordingly; and
to permit the exclusion of cover in respect of Firm's legal liability arising in the course of the Firm’s practice from its use of or access to the HM Land Registry network under a Network Access Agreement (save for the payment of fees to HM Land Registry in the ordinary course).
[; END INSERTED MATTER ;]
[; BEGIN MATTER DELETED ON 1 OCTOBER 2010;]
The changes to the Rules and the Qualifying Insurer's Agreement are relatively few this year. As well as the normal annual date changes, the following changes have been made:
Qualifying Insurers are now required to use their best endeavours to ensure that an intermediary who acts as an agent of the Qualifying Insurer discloses that fact and whether it does so on an exclusive basis; and
the definition of "Policy Default" in the Rules has been amended to make it clear that being in Policy Default constitutes a failure on the part of each Principal of a Firm, as well as the Firm itself; similar changes have been made elsewhere in the Rules.
In addition, as a result of changes brought about by the Legal Services Act 2007 (the LSA), it is currently expected that, with effect from 1 March 2009, legal disciplinary practices (LDPs) will be permitted. The Rules will therefore need to be amended to take account of LDPs, and other new regulatory arrangements, such as the requirement for partnerships to become recognised bodies. A number of changes will need to be made to the Rules and the Minimum Terms and Conditions to reflect this fact. The Solicitors Regulation Board proposes to make these changes in good time before 1 March 2009, by way of amendment to the Solicitors' Indemnity Insurance Rules 2008.
The scope of the amended Rules is expected to be largely unchanged. They will apply in respect of firms which are:
recognised by the SRA; or
not recognised by the SRA, but where the SRA is the only approved regulator which could grant them recognition.
It is thought that these changes will directly affect the indemnity insurance arrangements of few if any firms. However, firms which are considering taking advantage of the new structures permitted under the LSA will in the future need to consider the indemnity insurance implications.
[; END DELETED MATTER ;]
[; BEGIN MATTER INSERTED ON 1 OCTOBER 2010 ;]7 Legal Services Act 2007 [; END INSERTED MATTER ;]
As a result of changes brought about by the Legal Services Act 2007 (the LSA), the Rules were amended with effect from 31 March 2009 to take account of legal disciplinary practices and other new regulatory arrangements, such as the requirement for partnerships to become recognised bodies.
The Rules apply in respect of firms which are recognised by the SRA, or partnerships or sole practitioners which are not recognised by the SRA, but where the SRA is the only approved regulator which could grant them recognition.
Firms which are considering taking advantage of the new structures permitted under the LSA should consider the indemnity insurance implications.
[; BEGIN MATTER INSERTED ON 1 OCTOBER 2010 ;]8 [; END INSERTED MATTER ;][; BEGIN MATTER DELETED ON 1 OCTOBER 2010;]7[; END DELETED MATTER ;] About the Rules
[; BEGIN MATTER INSERTED ON 1 OCTOBER 2010 ;]8 [; END INSERTED MATTER ;][; BEGIN MATTER DELETED ON 1 OCTOBER 2010;]7[; END DELETED MATTER ;].1
The Solicitors' Indemnity Insurance Rules 20[; BEGIN MATTER INSERTED ON 1 OCTOBER 2010 ;]10 [; END INSERTED MATTER ;][; BEGIN MATTER DELETED ON 1 OCTOBER 2010;]08[; END DELETED MATTER ;] were approved by the [; BEGIN MATTER INSERTED ON 1 OCTOBER 2010 ;]SRA Board, with [; END INSERTED MATTER ;][; BEGIN MATTER DELETED ON 1 OCTOBER 2010;]Council on 22 May 2008, and[; END DELETED MATTER ;] the concurrence of the [; BEGIN MATTER INSERTED ON 1 OCTOBER 2010 ;]Legal Services Board [; END INSERTED MATTER ;][; BEGIN MATTER DELETED ON 1 OCTOBER 2010;]Master of the Rolls was obtained on 18 June 2008[; END DELETED MATTER ;]. They apply in respect of the indemnity period beginning on 1 October 20[; BEGIN MATTER INSERTED ON 1 OCTOBER 2010 ;]10 [; END INSERTED MATTER ;][; BEGIN MATTER DELETED ON 1 OCTOBER 2010;]08[; END DELETED MATTER ;].
[; BEGIN MATTER INSERTED ON 1 OCTOBER 2010 ;]8 [; END INSERTED MATTER ;][; BEGIN MATTER DELETED ON 1 OCTOBER 2010;]7[; END DELETED MATTER ;].2
Commentary is provided after a number of provisions of the Rules where it is thought that this might be helpful, and is printed in italics. However, the commentary does not form part of the Rules, is provided for guidance only, and does not affect the meaning or interpretation of the Rules in any way. The Solicitors Regulation Authority reserves the right to amend or supplement the commentary at any time. The Appendices to the Rules appear in normal type.
[; BEGIN MATTER INSERTED ON 1 OCTOBER 2010 ;]8 [; END INSERTED MATTER ;][; BEGIN MATTER DELETED ON 1 OCTOBER 2010;]7[; END DELETED MATTER ;].3
References in the Rules to the Council include any committee or person to whom any of the functions of the Council may be delegated by virtue of section 79 of the Solicitors Act 1974 .
[; BEGIN MATTER INSERTED ON 1 OCTOBER 2010 ;]9 [; END INSERTED MATTER ;][; BEGIN MATTER DELETED ON 1 OCTOBER 2010;]8[; END DELETED MATTER ;] Contact details for further information
[; BEGIN MATTER INSERTED ON 1 OCTOBER 2010 ;]9 [; END INSERTED MATTER ;][; BEGIN MATTER DELETED ON 1 OCTOBER 2010;]8[; END DELETED MATTER ;].1
If you are in doubt about any aspect of the indemnity insurance arrangements, you may contact the Client Protection Policy Unit of the Solicitors Regulation Authority on 01527 504487. Information about the arrangements, including a list of Qualifying Insurers, is provided on the website of the Solicitors Regulation Authority, at www.sra.org.uk.
Solicitors' Indemnity Insurance Rules [; BEGIN MATTER DELETED ON 1 OCTOBER 2009 ;]2008 [; END DELETED MATTER ;][; BEGIN MATTER DELETED ON 1 OCTOBER 2010 ;][; BEGIN MATTER INSERTED ON 1 OCTOBER 2009 ;]2009 [; END INSERTED MATTER ;] [; END DELETED MATTER ;][; BEGIN MATTER INSERTED ON 1 OCTOBER 2010 ;]2010 [; END INSERTED MATTER ;]
1 Authority and commencement
These Rules are made [; BEGIN MATTER INSERTED ON 1 OCTOBER 2009 ;]by the Solicitors Regulation Authority Board [; END INSERTED MATTER ;][;BEGIN MATTER DELETED ON 31 MARCH 2009 BY THE SOLICITORS' ACCOUNTS (LEGAL SERVICES ACT) AMENDMENT RULES 2009;]by the Council with the concurrence of the Master of the Rolls [;END DELETED MATTER;]under sections [; BEGIN MATTER DELETED ON 1 OCTOBER 2009 ;]31 and 37 [; END DELETED MATTER ;][; BEGIN MATTER INSERTED ON 1 OCTOBER 2009 ;]31, 37, 79 and 80 [; END INSERTED MATTER ;] of the Solicitors Act 1974 [; BEGIN MATTER INSERTED ON 1 OCTOBER 2010 ;] (as amended by the Legal Services Act 2007) [; END INSERTED MATTER ;] [; BEGIN MATTER DELETED ON 1 OCTOBER 2009 ;], [; END DELETED MATTER ;] [; BEGIN MATTER INSERTED ON 1 OCTOBER 2009 ;]and [; END INSERTED MATTER ;] section 9 of the Administration of Justice Act 1985 [; BEGIN MATTER INSERTED ON 1 OCTOBER 2010 ;] (as amended by the Legal Services Act 2007) [; END INSERTED MATTER ;] [; BEGIN MATTER DELETED ON 1 OCTOBER 2009 ;] and section 89(3) of the Courts and Legal Services Act 1990 [; END DELETED MATTER ;] [; BEGIN MATTER DELETED ON 1 OCTOBER 2010 ;] [;BEGIN MATTER INSERTED ON 31 MARCH 2009 BY THE SOLICITORS' ACCOUNTS (LEGAL SERVICES ACT) AMENDMENT RULES 2009;] [; END DELETED MATTER ;] [; BEGIN MATTER DELETED ON 1 OCTOBER 2010 ;]with the concurrence of the Master of the Rolls [; BEGIN MATTER INSERTED ON 1 OCTOBER 2009 ;]under sections 31 and 37 of the Solicitors Act 1974 and paragraph 16 of Schedule 22 of the Legal Services Act 2007 [; END INSERTED MATTER ;] and the concurrence, [; BEGIN MATTER DELETED ON 1 OCTOBER 2009 ;]where requisite, [; END DELETED MATTER ;] of the Lord Chancellor [; BEGIN MATTER INSERTED ON 1 OCTOBER 2009 ;]under paragraph 16 of Schedule 22 of the Legal Services Act 2007 [; END INSERTED MATTER ;]. [;END INSERTED MATTER;] [; END DELETED MATTER ;] [; BEGIN MATTER INSERTED ON 1 OCTOBER 2010 ;] with the approval of the Legal Services Board under Schedule 4 Part 3 of the Legal Services Act 2007. [; END INSERTED MATTER ;]
These Rules come into force on 1 October [; BEGIN MATTER DELETED ON 1 OCTOBER 2009;]2008 [; END DELETED MATTER ;] [; BEGIN MATTER DELETED ON 1 OCTOBER 2010 ;][; BEGIN MATTER INSERTED ON 1 OCTOBER 2009 ;]2009 [; END INSERTED MATTER ;] [; END DELETED MATTER ;][; BEGIN MATTER INSERTED ON 1 OCTOBER 2010 ;]2010 [; END INSERTED MATTER ;].
These Rules require Solicitors, Registered European Lawyers, Registered Foreign Lawyers and Recognised Bodies [; BEGIN MATTER INSERTED ON 1 OCTOBER 2009 ;]and their Managers [; END INSERTED MATTER ;] in Private Practice in England and Wales to take out and maintain professional indemnity insurance with Qualifying Insurers with effect from 1 October [; BEGIN MATTER DELETED ON 1 OCTOBER 2009;]2008 [; END DELETED MATTER ;] [; BEGIN MATTER DELETED ON 1 OCTOBER 2010 ;][; BEGIN MATTER INSERTED ON 1 OCTOBER 2009 ;]2009 [; END INSERTED MATTER ;] [; END DELETED MATTER ;][; BEGIN MATTER INSERTED ON 1 OCTOBER 2010 ;]2010 [; END INSERTED MATTER ;].
Registered Foreign Lawyers and
Recognised Bodies [; BEGIN MATTER INSERTED ON 1 OCTOBER 2009 ;]and their Managers [; END INSERTED MATTER ;]
carrying on Private Practice in England and Wales as a Firm at any time after 1 October [; BEGIN MATTER DELETED ON 1 OCTOBER 2009;]2008 [; END DELETED MATTER ;] [; BEGIN MATTER DELETED ON 1 OCTOBER 2010 ;][; BEGIN MATTER INSERTED ON 1 OCTOBER 2009 ;]2009 [; END INSERTED MATTER ;] [; END DELETED MATTER ;][; BEGIN MATTER INSERTED ON 1 OCTOBER 2010 ;]2010 [; END INSERTED MATTER ;]. Refer to the definitions in Rule 3 for guidance on the exact meanings of these terms.
These Rules will apply to any Indemnity Period beginning on or after 1 October [; BEGIN MATTER DELETED ON 1 OCTOBER 2009 ;]2008 [; END DELETED MATTER ;] [; BEGIN MATTER DELETED ON 1 OCTOBER 2010 ;][; BEGIN MATTER INSERTED ON 1 OCTOBER 2009 ;]2009 [; END INSERTED MATTER ;] [; END DELETED MATTER ;][; BEGIN MATTER INSERTED ON 1 OCTOBER 2010 ;]2010 [; END INSERTED MATTER ;].
Before 1 September 2000, Firms were required to take out insurance with the Solicitors Indemnity Fund. Since 1 September 2000, Firms have been required to take out insurance in accordance with the Solicitors' Indemnity Insurance Rules. From 1 October [; BEGIN MATTER DELETED ON 1 OCTOBER 2009 ;]2008 [; END DELETED MATTER ;] [; BEGIN MATTER DELETED ON 1 OCTOBER 2010 ;][; BEGIN MATTER INSERTED ON 1 OCTOBER 2009 ;]2009 [; END INSERTED MATTER ;] [; END DELETED MATTER ;][; BEGIN MATTER INSERTED ON 1 OCTOBER 2010 ;]2010 [; END INSERTED MATTER ;], Firms must take out insurance in accordance with these Rules with one or more Qualifying Insurers. Continuing arrangements dealing with past claims on the Solicitors Indemnity Fund are covered in the Solicitors' Indemnity Rules.
The Solicitors Indemnity Insurance Rules [; BEGIN MATTER DELETED ON 1 OCTOBER 2009;]2007 [; END DELETED MATTER ;] [; BEGIN MATTER DELETED ON 1 OCTOBER 2010 ;][; BEGIN MATTER INSERTED ON 1 OCTOBER 2009 ;]2008 [; END INSERTED MATTER ;] [; END DELETED MATTER ;][; BEGIN MATTER INSERTED ON 1 OCTOBER 2010 ;]2009 [; END INSERTED MATTER ;] shall not apply in respect of any Indemnity Period beginning on or after 1 October [; BEGIN MATTER DELETED ON 1 OCTOBER 2009 ;]2008 [; END DELETED MATTER ;][; BEGIN MATTER DELETED ON 1 OCTOBER 2010 ;][; BEGIN MATTER INSERTED ON 1 OCTOBER 2009 ;]2009 [; END INSERTED MATTER ;] [; END DELETED MATTER ;][; BEGIN MATTER INSERTED ON 1 OCTOBER 2010 ;]2010 [; END INSERTED MATTER ;], but they shall remain in force in respect of the Indemnity Period from 1 October [; BEGIN MATTER DELETED ON 1 OCTOBER 2010 ;][; BEGIN MATTER INSERTED ON 1 OCTOBER 2009 ;]2007 [; END INSERTED MATTER ;] [; END DELETED MATTER ;][; BEGIN MATTER INSERTED ON 1 OCTOBER 2010 ;]2008 [; END INSERTED MATTER ;] to 30 September [; BEGIN MATTER DELETED ON 1 OCTOBER 2010 ;][; BEGIN MATTER INSERTED ON 1 OCTOBER 2009 ;]2008 [; END INSERTED MATTER ;] [; END DELETED MATTER ;][; BEGIN MATTER INSERTED ON 1 OCTOBER 2010 ;]2009 [; END INSERTED MATTER ;] inclusive [; BEGIN MATTER INSERTED ON 1 OCTOBER 2009 ;](as amended by the Solicitors’ Indemnity Insurance (Amendment) Rules [; BEGIN MATTER DELETED ON 1 OCTOBER 2010 ;]2009 [; END DELETED MATTER ;] with effect from 31 March 2009) [; END INSERTED MATTER ;] subject to the provisions of Rules 19.1(a), 19.1(b), 19.1(c) and 19.1(d) below.
You should refer to previous Solicitors' Indemnity Insurance Rules in relation to earlier Indemnity Periods since 1 September 2000. However, you should refer to Rules 19.1(a) to 19.1(d) in relation to time limits in respect of an application for a waiver of the provisions of the Solicitors' Indemnity Insurance Rules 2000 to [; BEGIN MATTER DELETED ON 1 OCTOBER 2009 ;]2008 [; END DELETED MATTER ;] [; BEGIN MATTER DELETED ON 1 OCTOBER 2010 ;][; BEGIN MATTER INSERTED ON 1 OCTOBER 2009 ;]2009 [; END INSERTED MATTER ;] [; END DELETED MATTER ;][; BEGIN MATTER INSERTED ON 1 OCTOBER 2010 ;]2010 [; END INSERTED MATTER ;].
These Rules may be cited as the Solicitors' Indemnity Insurance Rules [; BEGIN MATTER DELETED ON 1 OCTOBER 2009 ;]2008 [; END DELETED MATTER ;] [; BEGIN MATTER INSERTED ON 1 OCTOBER 2009 ;]2009 [; END INSERTED MATTER ;].
means any person who is designated as a fee-earner in accordance with any arrangements made from time to time between the Firm and the Legal Services Commission pursuant to the provisions of the Access to Justice Act 1999, regardless of whether the services performed for the Firm by that person in accordance with Rule 4.1 are performed pursuant to such arrangements or otherwise, and who is engaged by the Firm under a contract for services in the course of the Private Practice of the Firm.
Under Rule 4, work carried out by a designated fee-earner may be covered under the Qualifying Insurance of the Firm for which they do that work.
[;BEGIN MATTER INSERTED ON 31 MARCH 2009 BY THE SOLICITORS' ACCOUNTS (LEGAL SERVICES ACT) AMENDMENT RULES 2009;]Approved Regulator [;END INSERTED MATTER;]
[;BEGIN MATTER INSERTED ON 31 MARCH 2009 BY THE SOLICITORS' ACCOUNTS (LEGAL SERVICES ACT) AMENDMENT RULES 2009;]means a body listed in the first column of the table in paragraph 1 of Schedule 4 to the Legal Services Act 2007 (whether or not that paragraph has been brought into force), or designated as an approved regulator by an order under Part 2 of that Schedule . [;END INSERTED MATTER;]
means the arrangements by which an Eligible Firm may obtain professional indemnity insurance against civil liability by means of an ARP Policy on the terms set out in Part 3 of these Rules.
The Assigned Risks Pool is designed to ensure that professional indemnity insurance will be available to all Eligible Firms. However, it is important to note that premiums payable to the Assigned Risks Pool are intended to be high. Refer to Appendix 2 to the Rules for the method of calculation of the ARP Premium.
means the manager of the Assigned Risks Pool being any person from time to time appointed by the Society to carry out all or any particular functions of the ARP Manager or the Society and any such person.
means a contract of professional indemnity insurance issued by the ARP Manager on behalf of Qualifying Insurers to an Eligible Firm in the Assigned Risks Pool including where the context permits a Policy provided to a Firm in Default.
A copy of the standard-form ARP Policy is available on the website of the Solicitors Regulation Authority at www.sra.org.uk, and is also available from the Solicitors Regulation Authority. Contact details appear at the end of the introductory commentary.
ARP Premium
means the premium calculated in accordance with Part 1 of Appendix 2 to these Rules, ARP Default Premium means the premium calculated in accordance with Part 2 of Appendix 2 to these Rules and ARP Run-off Premium means the premium calculated in accordance with Part 3 of Appendix 2 to these Rules.
ARP Run-off Policy
means a contract of professional indemnity insurance issued by the ARP Manager on behalf of Qualifying Insurers to a Run-off Firm in the Assigned Risks Pool.
a person who has permission under Part IV of the Financial Services and Markets Act 2000 to effect or carry out contracts of insurance of a relevant class;
a person who carries on an insurance market activity, within the meaning of section 316(3) of that Act ;
an EEA Firm of the kind mentioned in paragraph 5(d) of Schedule 3 to that Act , which has permission under paragraph 15 of that Schedule (as a result of qualifying for authorisation under paragraph 12 of that Schedule ) to effect or carry out contracts of insurance of a relevant class; or
a person who does not fall within paragraph [; BEGIN MATTER DELETED ON 1 OCTOBER 2009 ;](i) [; END DELETED MATTER ;][; BEGIN MATTER INSERTED ON 1 OCTOBER 2009 ;](a) [; END INSERTED MATTER ;], [; BEGIN MATTER DELETED ON 1 OCTOBER 2009 ;](ii) [; END DELETED MATTER ;][; BEGIN MATTER INSERTED ON 1 OCTOBER 2009 ;](b) [; END INSERTED MATTER ;] or [; BEGIN MATTER DELETED ON 1 OCTOBER 2009 ;](iii) [; END DELETED MATTER ;][; BEGIN MATTER INSERTED ON 1 OCTOBER 2009 ;](c) [; END INSERTED MATTER ;] and who may lawfully effect or carry out contracts of insurance of a relevant class in a member state other than the United Kingdom
where relevant class has the meaning set out in section 87(1B) of the Solicitors Act 1974 and provided that this definition must be read with section 22 of the Financial Services and Markets Act 2000 , any relevant order under that section and Schedule 2 to that Act .
Under the Solicitors Act 1974, it is only permitted to enter into arrangements with authorised insurers (including relevant Lloyd's syndicates), as defined under section 87(1A) of that Act. A Qualifying Insurer must be authorised to write new business on the date on which a Policy incepts, but the Policy will remain a Policy of Qualifying Insurance until it expires, even if the Qualifying Insurer then ceases to write, or be authorised to write, new insurance business.
means the Council of the Society.
means a contract of professional indemnity insurance, made between one or more Qualifying Insurers and a Firm, which provides cover including the Minimum Terms and Conditions as modified in accordance with paragraph 2 of Appendix 3 to these Rules.
means any Firm which is eligible to be in the Assigned Risks Pool, being any Firm other than:
a Firm that has been in the Assigned Risks Pool for [; BEGIN MATTER INSERTED ON 1 OCTOBER 2010 ;]twelve months or more in the four Indemnity Periods immediately prior to the date from which cover is sought, without the prior written approval of the Council unless: [; END INSERTED MATTER ;] twenty four months or more (or twenty five months or more in the case of a Firm which was in the Assigned Risks Pool for the whole of the Indemnity Period from 1 September 2003 to 30 September 2004) in the four Indemnity Periods immediately prior to the date from which cover is sought, without the prior written approval of the Council; or
[; BEGIN MATTER INSERTED ON 1 OCTOBER 2010 ;] (i)
the date from which cover is sought is on or before 1 October 2010; and
[; BEGIN MATTER INSERTED ON 1 OCTOBER 2010 ;] (ii) [; END INSERTED MATTER ;]
[; BEGIN MATTER INSERTED ON 1 OCTOBER 2010 ;]immediately prior to that date the Firm is in the Assigned Risks Pool [; END INSERTED MATTER ;] , without the prior written approval of the Council[; BEGIN MATTER INSERTED ON 1 OCTOBER 2010 ;], for less than [; END INSERTED MATTER ;] twenty four months [; BEGIN MATTER DELETED ON 1 OCTOBER 2010 ;]or more [; END DELETED MATTER ;] (or twenty five months [; BEGIN MATTER DELETED ON 1 OCTOBER 2010 ;]or more [; END DELETED MATTER ;] in the case of a Firm which was in the Assigned Risks Pool for the whole of the Indemnity Period from 1 September 2003 to 30 September 2004) in the four Indemnity Periods immediately prior to [; BEGIN MATTER DELETED ON 1 OCTOBER 2010 ;]the [; END DELETED MATTER ;] [; BEGIN MATTER INSERTED ON 1 OCTOBER 2010 ;]that [; END INSERTED MATTER ;] date [; BEGIN MATTER DELETED ON 1 OCTOBER 2010 ;]from which cover is sought, without the prior written approval of the Council; or [; END DELETED MATTER ;], in which case the Firm is eligible to be in the Assigned Risks Pool only for any unexpired part of the twenty four or twenty five month period (as the case may be);
a Firm determined by the Council not to be an Eligible Firm by reason of its being treated as one single Firm with one or more other Firms already in the Assigned Risks Pool for the purposes of Rule 12.5 or Rule 12.6; or
subject to Rule 12.3, a Firm that at the end of any Indemnity Period to which these Rules apply is in Policy Default; or
a Firm which, at the time it applies to enter the Assigned Risks Pool, already has in place Qualifying Insurance outside the Assigned Risks Pool for the Indemnity Period in which that Firm requests cover through the Assigned Risks Pool to commence.
[; BEGIN MATTER INSERTED ON 1 OCTOBER 2010 ;](e)
(e) a Firm that has never had in place Qualifying Insurance except through the Assigned Risks Pool.
Firms cannot remain insured through the Assigned Risks Pool indefinitely. [; BEGIN MATTER INSERTED ON 1 OCTOBER 2010 ;] A Firm which at 1 October 2010 has been in the Assigned Risks Pool during the previous four indemnity periods is eligible for cover through the Assigned Risks Pool for a maximum of twenty four months (or twenty five months in the specified circumstances) less the aggregate number of months in which that Firm was insured through the Assigned Risks Pool during those previous four indemnity periods. [; END INSERTED MATTER ;] For example, a Firm which has been insured through the Assigned Risks Pool for the [; BEGIN MATTER DELETED ON 1 OCTOBER 2009 ;]2004/05 [; END DELETED MATTER ;] [; BEGIN MATTER DELETED ON 1 OCTOBER 2010 ;] [; BEGIN MATTER INSERTED ON 1 OCTOBER 2010 ;]2005/06 [; END INSERTED MATTER ;] [; END DELETED MATTER ;] [; BEGIN MATTER INSERTED ON 1 OCTOBER 2010 ;]2007/08 [; END INSERTED MATTER ;] and [; BEGIN MATTER DELETED ON 1 OCTOBER 2010 ;] [; BEGIN MATTER INSERTED ON 1 OCTOBER 2009 ;]2006/07 [; END INSERTED MATTER ;] [; END DELETED MATTER ;] [; BEGIN MATTER INSERTED ON 1 OCTOBER 2010 ;]2008/09 [; END INSERTED MATTER ;] Indemnity Periods will not be eligible to be insured through the Assigned Risks Pool for the [; BEGIN MATTER DELETED ON 1 OCTOBER 2010 ;]2009/10 Indemnity Period [; END DELETED MATTER ;][; BEGIN MATTER INSERTED ON 1 OCTOBER 2010 ;]2010/11 Indemnity Period. Additionally, for the 2010/2011 indemnity year, a Firm which has not been insured through the Assigned Risks Pool in any of the four indemnity periods expiring on 1 October 2010 will, as from that date be entitled to be insured through the Assigned Risks Pool for a maximum of twelve months during the four indemnity years prior to the date from which cover is sought [; END INSERTED MATTER ;].
Subject to any waiver granted under Rule 19, any Firm which no longer fulfils the definition of an Eligible Firm is therefore required to obtain Qualifying Insurance from a Qualifying Insurer outside the Assigned Risks Pool, or to cease Practice.
[; BEGIN MATTER INSERTED ON 1 OCTOBER 2010 ;]A newly created Firm not previously regulated by the Solicitors Regulation Authority or a Non-SRA Firm which elects (and is accepted) to become regulated by the Solicitors Regulation Authority must obtain Qualifying Insurance in the open market outside the Assigned Risks Pool. [; END INSERTED MATTER ;]
In addition, a Firm is not eligible to join the Assigned Risks Pool if it has already obtained Qualifying Insurance from a Qualifying Insurer outside the Assigned Risks Pool for the relevant Indemnity Period.
[;BEGIN MATTER DELETED ON 31 MARCH 2009 BY THE SOLICITORS' ACCOUNTS (LEGAL SERVICES ACT) AMENDMENT RULES 2009;]Partnership of two or more persons [;END DELETED MATTER;] [;BEGIN MATTER INSERTED ON 31 MARCH 2009 BY THE SOLICITORS' ACCOUNTS (LEGAL SERVICES ACT) AMENDMENT RULES 2009;]Recognised Sole Practitioner; or [;END INSERTED MATTER;]
[;BEGIN MATTER INSERTED ON 31 MARCH 2009 BY THE SOLICITORS' ACCOUNTS (LEGAL SERVICES ACT) AMENDMENT RULES 2009;](b) [;END INSERTED MATTER;]
any Recognised Body [;END INSERTED MATTER;](as constituted from time to time [;BEGIN MATTER DELETED ON 31 MARCH 2009 BY THE SOLICITORS' ACCOUNTS (LEGAL SERVICES ACT) AMENDMENT RULES 2009;], [;END DELETED MATTER;] [;BEGIN MATTER INSERTED ON 31 MARCH 2009 BY THE SOLICITORS' ACCOUNTS (LEGAL SERVICES ACT) AMENDMENT RULES 2009;]); or [;END INSERTED MATTER;]
[;BEGIN MATTER INSERTED ON 31 MARCH 2009 BY THE SOLICITORS' ACCOUNTS (LEGAL SERVICES ACT) AMENDMENT RULES 2009;](c)
any solicitor or Registered European Lawyer who is a sole practitioner, unless that sole practitioner is a Non-SRA Firm; or
[;BEGIN MATTER INSERTED ON 31 MARCH 2009 BY THE SOLICITORS' ACCOUNTS (LEGAL SERVICES ACT) AMENDMENT RULES 2009;](d)
any Partnership (as constituted from time to time) which is eligible to become a Recognised Body and which meets the requirements applicable to Recognised Bodies set out in rules 14.01, 14.03 and 14.04 of the Solicitors' Code of Conduct 2007 , unless that Partnership is a Non-SRA Firm,
whether before or during any relevant Indemnity Period [;BEGIN MATTER DELETED ON 31 MARCH 2009 BY THE SOLICITORS' ACCOUNTS (LEGAL SERVICES ACT) AMENDMENT RULES 2009;]), [;END DELETED MATTER;] [;BEGIN MATTER INSERTED ON 31 MARCH 2009 BY THE SOLICITORS' ACCOUNTS (LEGAL SERVICES ACT) AMENDMENT RULES 2009;]. [;END INSERTED MATTER;]
[;BEGIN MATTER DELETED ON 31 MARCH 2009 BY THE SOLICITORS' ACCOUNTS (LEGAL SERVICES ACT) AMENDMENT RULES 2009;]consisting of: [;END DELETED MATTER;]
[;BEGIN MATTER DELETED ON 31 MARCH 2009 BY THE SOLICITORS' ACCOUNTS (LEGAL SERVICES ACT) AMENDMENT RULES 2009;](i)
one or more Solicitors and/or Registered European Lawyers and/or Recognised Bodies; or
[;BEGIN MATTER DELETED ON 31 MARCH 2009 BY THE SOLICITORS' ACCOUNTS (LEGAL SERVICES ACT) AMENDMENT RULES 2009;](ii)
one or more Solicitors and/or Registered European Lawyers, together with one or more Registered Foreign Lawyers; or
[;BEGIN MATTER DELETED ON 31 MARCH 2009 BY THE SOLICITORS' ACCOUNTS (LEGAL SERVICES ACT) AMENDMENT RULES 2009;](iii)
one or more Registered European Lawyers together with one or more non-registered European lawyers, with or without one or more Solicitors and/or Registered Foreign Lawyers, as permitted for practice in England and Wales by rule 12 of the Solicitors' Code of Conduct 2007 ; or
[;BEGIN MATTER DELETED ON 31 MARCH 2009 BY THE SOLICITORS' ACCOUNTS (LEGAL SERVICES ACT) AMENDMENT RULES 2009;](iv)
one or more Registered European Lawyers together with one or more non-registered European lawyers and one or more Recognised Bodies, with or without one or more Solicitors, as permitted for practice in England and Wales by rule 12 of the Solicitors' Code of Conduct 2007 ; or
[;BEGIN MATTER DELETED ON 31 MARCH 2009 BY THE SOLICITORS' ACCOUNTS (LEGAL SERVICES ACT) AMENDMENT RULES 2009;](b)
any sole practitioner being either a Solicitor or Registered European Lawyer; or
[;BEGIN MATTER DELETED ON 31 MARCH 2009 BY THE SOLICITORS' ACCOUNTS (LEGAL SERVICES ACT) AMENDMENT RULES 2009;](c)
any Recognised Body.
If you are unsure whether you or your business fall within this definition, you should consult the Solicitors Regulation Authority. Contact details appear at the end of the introductory commentary.
Firm in Default
means a Firm that has failed to obtain Qualifying Insurance outside the Assigned Risks Pool and which,
in the case of an Eligible Firm, has failed to apply in accordance with these Rules to be admitted into the Assigned Risks Pool before either the start of any Indemnity Period to which these Rules apply or the start of its Practice, whichever is the later; or
in the case of a Firm which is not an Eligible Firm, is a Firm which is carrying on or continuing to carry on a Practice without Qualifying Insurance outside the Assigned Risks Pool; or
in the case of a Run-off Firm, is a Run-off Firm which has failed to make an application in manner prescribed by these Rules to be issued with an ARP Run-off Policy; or
is a Firm which is a Firm in Default by virtue of Rule 10.4[; BEGIN MATTER INSERTED ON 1 OCTOBER 2009 ;], [; END INSERTED MATTER ;][; BEGIN MATTER DELETED ON 1 OCTOBER 2009 ;]. [; END DELETED MATTER ;]
[; BEGIN MATTER INSERTED ON 1 OCTOBER 2009 ;]
or a Firm which, having previously obtained Qualifying Insurance, has failed to obtain alternative Qualifying Insurance when required to do so in accordance with Rule 6.
A Firm In Default, and each Principal in that Firm, will be required to pay the ARP Default Premium, and/or the ARP Run-Off Premium to the Assigned Risks Pool, and each Principal in that Firm will have committed a disciplinary offence by having breached these Rules. Refer to Part 4 of these Rules for the provisions that apply to a Firm In Default.
means the period of one year starting on 1 September 2000, 2001 or 2002, the period of 13 calendar months starting on 1 September 2003, or the period of one year starting on 1 October in any subsequent calendar year.
Under the Qualifying Insurer's Agreement, each Policy is required to expire at the end of an Indemnity Period. It is envisaged that any change to these Rules or to the Minimum Terms and Conditions would take effect from the start of an Indemnity Period, so that at any one time, all Policies in force comply with the same version of these Rules and the Minimum Terms and Conditions.
Qualifying Insurers are permitted under the Qualifying Insurer's Agreement to issue a Policy covering more than one Indemnity Period, provided that the Policy expires at the end of a subsequent Indemnity Period, and provided that the terms of the Policy are amended if required to reflect any change in the Rules or the Minimum Terms and Conditions while the Policy is in force.
means in relation to a Qualifying Insurer:
the approval of a voluntary arrangement under Part 1 of the Insolvency Act 1986 or the making of any other form of arrangement, composition or compounding with its creditors generally; or
the passing of a resolution for voluntary winding up where the winding up is or becomes a creditors' voluntary winding up under Part IV of the Insolvency Act 1986 ; or
the making of an order by the court reducing the value of one or more of the Qualifying Insurer's contracts under section 377 of the Financial Services and Markets Act 2000 ; or
[;BEGIN MATTER INSERTED ON 31 MARCH 2009 BY THE SOLICITORS' ACCOUNTS (LEGAL SERVICES ACT) AMENDMENT RULES 2009;]Limited Liability Partnership [;END INSERTED MATTER;]
[;BEGIN MATTER INSERTED ON 31 MARCH 2009 BY THE SOLICITORS' ACCOUNTS (LEGAL SERVICES ACT) AMENDMENT RULES 2009;]means a limited liability partnership incorporated under the Limited Liability Partnerships Act 2000 . [;END INSERTED MATTER;]
[; BEGIN MATTER INSERTED ON 1 OCTOBER 2009 ;]Manager means: [; END INSERTED MATTER ;]
a member of a Limited Liability Partnership; or
means the minimum terms and conditions with which a Policy of Qualifying Insurance is required by these Rules to comply a copy of which is annexed as Appendix 1 to these Rules.
All Qualifying Insurers agree under the Qualifying Insurer's Agreement to issue Policies which comply with the Minimum Terms and Conditions. However, under Rule 4 it remains the duty of each Firm and each Principal within that Firm to ensure that the Policy issued to it is issued by an insurer which is a Qualifying Insurer for the Indemnity Period in question, and that it complies with the Minimum Terms and Conditions. The SRA does not approve Qualifying Insurers, nor does it review their policy terms.
The standard form ARP Policy does comply with the Minimum Terms and Conditions.
In addition, each Firm should satisfy itself that the professional indemnity insurance that it has in place is sufficient. This may mean that the Firm takes out additional insurance over and above that provided under the Minimum Terms and Conditions. Any such "top-up" cover is outside the scope of these Rules, and does not have to be taken out with a Qualifying Insurer.
Most recognised bodies are required to obtain cover complying with the minimum terms and conditions and with a sum insured of £3 million, rather than £2 million for other Firms. The definition of "Relevant Recognised Body" in clause 8.2 of the Minimum Terms and Conditions indicates which recognised bodies this requirement applies to.
[;BEGIN MATTER INSERTED ON 31 MARCH 2009 BY THE SOLICITORS' ACCOUNTS (LEGAL SERVICES ACT) AMENDMENT RULES 2009;]Non-SRA Firm [;END INSERTED MATTER;]
[;BEGIN MATTER INSERTED ON 31 MARCH 2009 BY THE SOLICITORS' ACCOUNTS (LEGAL SERVICES ACT) AMENDMENT RULES 2009;]means a sole practitioner, Partnership, Limited Liability Partnership or company which is not authorised to practise by the Solicitors Regulation Authority, and which is either:
[;BEGIN MATTER DELETED ON 31 MARCH 2009 BY THE SOLICITORS' ACCOUNTS (LEGAL SERVICES ACT) AMENDMENT RULES 2009;]Partner and [;END DELETED MATTER;]Partnership
[;BEGIN MATTER DELETED ON 31 MARCH 2009 BY THE SOLICITORS' ACCOUNTS (LEGAL SERVICES ACT) AMENDMENT RULES 2009;]refer to [;END DELETED MATTER;] [;BEGIN MATTER INSERTED ON 31 MARCH 2009 BY THE SOLICITORS' ACCOUNTS (LEGAL SERVICES ACT) AMENDMENT RULES 2009;] means [;END INSERTED MATTER;] an unincorporated Firm [;BEGIN MATTER DELETED ON 31 MARCH 2009 BY THE SOLICITORS' ACCOUNTS (LEGAL SERVICES ACT) AMENDMENT RULES 2009;], and not to [;END DELETED MATTER;] [;BEGIN MATTER INSERTED ON 31 MARCH 2009 BY THE SOLICITORS' ACCOUNTS (LEGAL SERVICES ACT) AMENDMENT RULES 2009;] in which persons are or are held out as partners and does not include [;END INSERTED MATTER;] a Firm incorporated as a [;BEGIN MATTER DELETED ON 31 MARCH 2009 BY THE SOLICITORS' ACCOUNTS (LEGAL SERVICES ACT) AMENDMENT RULES 2009;]limited liability partnership. [;END DELETED MATTER;] [;BEGIN MATTER INSERTED ON 31 MARCH 2009 BY THE SOLICITORS' ACCOUNTS (LEGAL SERVICES ACT) AMENDMENT RULES 2009;]Limited Liability Partnership and Partner means a person who is or is held out to be a partner in a Partnership. [;END INSERTED MATTER;]
A limited liability partnership is treated for these purposes as a Recognised Body, rather than as a partnership.
means in relation to a Firm in Default the period starting with the date when such Firm first became a Firm in Default and ending with the date when it ceased to be a Firm in Default.
means a contract of professional indemnity insurance made between one or more persons, each of which is a Qualifying Insurer, and a Firm, including where the context permits an ARP Policy and an ARP Run-off Policy.
means a failure on the part of a Firm or any Principal of that Firm:
to pay for more than two months after the due date for payment all or any part of the premium or any other sum due in respect of a Policy (including without limitation any payment due under Rule 14.1); or
to pay for more than two months after the due date for payment all or any part of any ARP Premium, any ARP Default Premium, or any ARP Run-Off Premium, or any instalment payable in relation thereto whether payable to the ARP Manager or otherwise; or
to reimburse within two months a Qualifying Insurer (including the ARP Manager on behalf of Qualifying Insurers) in respect of any amount falling within a Firm's Policy excess which has been paid on an insured's behalf to a claimant by a Qualifying Insurer or by the ARP Manager.
if a Firm was first required under these or any previous Rules to effect such a Policy prior to the date on which it did so, the date if earlier on which such payment would have fallen due had such Policy been effected by the Firm when it was first required to do so under these Rules or any previous rules.
Principals are committing a disciplinary offence if they or their Firm is in Policy Default, whether as a result of failing to pay premium when demanded or as a result of failing to take out a Policy when required to do so. In addition, their Firm will cease to be an Eligible Firm for the purpose of taking out or renewing an ARP Policy.
means the whole or such part of the Private Practice of a Firm as is carried on from one or more offices in England and Wales.
The Rules require Firms to take out Policies which include cover in accordance with the Minimum Terms and Conditions for that part of their Practice carried on from offices located in England and Wales. They do not apply to any part of the Practice of the Firm carried on from offices outside England and Wales (although rule 15.26 of the Solicitors' Code of Conduct 2007 does apply in such cases). However, the cover in relation to the Practice carried on from offices located in England and Wales must extend to acts or omissions wherever in the world they occur, and would therefore include, for example, a Principal based in a Firm's London office who travels to Paris to advise a client.
a sole practitioner - that practitioner [;BEGIN MATTER DELETED ON 31 MARCH 2009 BY THE SOLICITORS' ACCOUNTS (LEGAL SERVICES ACT) AMENDMENT RULES 2009;] and any person held out as a Partner of that practitioner [;END DELETED MATTER;];
a Partnership - each Partner [;BEGIN MATTER DELETED ON 31 MARCH 2009 BY THE SOLICITORS' ACCOUNTS (LEGAL SERVICES ACT) AMENDMENT RULES 2009;] of that Firm and any person held out as a Partner [;END DELETED MATTER;];
[;BEGIN MATTER DELETED ON 31 MARCH 2009 BY THE SOLICITORS' ACCOUNTS (LEGAL SERVICES ACT) AMENDMENT RULES 2009;]a Recognised Body which is [;END DELETED MATTER;]a company with a share capital - each director of that [;BEGIN MATTER DELETED ON 31 MARCH 2009 BY THE SOLICITORS' ACCOUNTS (LEGAL SERVICES ACT) AMENDMENT RULES 2009;]body and any person held out as a director and any person [;END DELETED MATTER;] [;BEGIN MATTER INSERTED ON 31 MARCH 2009 BY THE SOLICITORS' ACCOUNTS (LEGAL SERVICES ACT) AMENDMENT RULES 2009;]company and any solicitor, Registered European Lawyer or Registered Foreign Lawyer [;END INSERTED MATTER;]who:
[;BEGIN MATTER INSERTED ON 31 MARCH 2009 BY THE SOLICITORS' ACCOUNTS (LEGAL SERVICES ACT) AMENDMENT RULES 2009;](A)
[;BEGIN MATTER INSERTED ON 31 MARCH 2009 BY THE SOLICITORS' ACCOUNTS (LEGAL SERVICES ACT) AMENDMENT RULES 2009;](B) [;END INSERTED MATTER;] [;BEGIN MATTER DELETED ON 31 MARCH 2009 BY THE SOLICITORS' ACCOUNTS (LEGAL SERVICES ACT) AMENDMENT RULES 2009;](A) [;END DELETED MATTER;]
beneficially owns the whole or any part of a share in [;BEGIN MATTER DELETED ON 31 MARCH 2009 BY THE SOLICITORS' ACCOUNTS (LEGAL SERVICES ACT) AMENDMENT RULES 2009;]such Recognised Body [;END DELETED MATTER;] [;BEGIN MATTER INSERTED ON 31 MARCH 2009 BY THE SOLICITORS' ACCOUNTS (LEGAL SERVICES ACT) AMENDMENT RULES 2009;]the company[;END INSERTED MATTER;]; or
[;BEGIN MATTER INSERTED ON 31 MARCH 2009 BY THE SOLICITORS' ACCOUNTS (LEGAL SERVICES ACT) AMENDMENT RULES 2009;](C) [;END INSERTED MATTER;] [;BEGIN MATTER DELETED ON 31 MARCH 2009 BY THE SOLICITORS' ACCOUNTS (LEGAL SERVICES ACT) AMENDMENT RULES 2009;](B) [;END DELETED MATTER;]
is the ultimate beneficial owner of the whole or any part of a share in [;BEGIN MATTER DELETED ON 31 MARCH 2009 BY THE SOLICITORS' ACCOUNTS (LEGAL SERVICES ACT) AMENDMENT RULES 2009;]such Recognised Body [;END DELETED MATTER;] [;BEGIN MATTER INSERTED ON 31 MARCH 2009 BY THE SOLICITORS' ACCOUNTS (LEGAL SERVICES ACT) AMENDMENT RULES 2009;]the company [;END INSERTED MATTER;].
[;BEGIN MATTER DELETED ON 31 MARCH 2009 BY THE SOLICITORS' ACCOUNTS (LEGAL SERVICES ACT) AMENDMENT RULES 2009;]a Recognised Body which is [;END DELETED MATTER;]a company without a share capital – each director of that [;BEGIN MATTER DELETED ON 31 MARCH 2009 BY THE SOLICITORS' ACCOUNTS (LEGAL SERVICES ACT) AMENDMENT RULES 2009;]body [;END DELETED MATTER;] [;BEGIN MATTER INSERTED ON 31 MARCH 2009 BY THE SOLICITORS' ACCOUNTS (LEGAL SERVICES ACT) AMENDMENT RULES 2009;]company [;END INSERTED MATTER;] and any [;BEGIN MATTER DELETED ON 31 MARCH 2009 BY THE SOLICITORS' ACCOUNTS (LEGAL SERVICES ACT) AMENDMENT RULES 2009;]person held out as a director and any person [;END DELETED MATTER;] [;BEGIN MATTER INSERTED ON 31 MARCH 2009 BY THE SOLICITORS' ACCOUNTS (LEGAL SERVICES ACT) AMENDMENT RULES 2009;]solicitor, Registered European Lawyer or Registered Foreign Lawyer [;END INSERTED MATTER;]who:
is [;BEGIN MATTER INSERTED ON 31 MARCH 2009 BY THE SOLICITORS' ACCOUNTS (LEGAL SERVICES ACT) AMENDMENT RULES 2009;]held out as a director; or [;END INSERTED MATTER;]
[;BEGIN MATTER INSERTED ON 31 MARCH 2009 BY THE SOLICITORS' ACCOUNTS (LEGAL SERVICES ACT) AMENDMENT RULES 2009;]is [;END INSERTED MATTER;]a member of [;BEGIN MATTER DELETED ON 31 MARCH 2009 BY THE SOLICITORS' ACCOUNTS (LEGAL SERVICES ACT) AMENDMENT RULES 2009;]such Recognised Body; or [;END DELETED MATTER;] [;BEGIN MATTER INSERTED ON 31 MARCH 2009 BY THE SOLICITORS' ACCOUNTS (LEGAL SERVICES ACT) AMENDMENT RULES 2009;]the company; or [;END INSERTED MATTER;]
is the ultimate owner of the whole or any part of a body corporate [;BEGIN MATTER INSERTED ON 31 MARCH 2009 BY THE SOLICITORS' ACCOUNTS (LEGAL SERVICES ACT) AMENDMENT RULES 2009;]or other legal person [;END INSERTED MATTER;] which is a member of [;BEGIN MATTER DELETED ON 31 MARCH 2009 BY THE SOLICITORS' ACCOUNTS (LEGAL SERVICES ACT) AMENDMENT RULES 2009;]such Recognised Body [;END DELETED MATTER;] [;BEGIN MATTER INSERTED ON 31 MARCH 2009 BY THE SOLICITORS' ACCOUNTS (LEGAL SERVICES ACT) AMENDMENT RULES 2009;]the company [;END INSERTED MATTER;];
a [;BEGIN MATTER DELETED ON 31 MARCH 2009 BY THE SOLICITORS' ACCOUNTS (LEGAL SERVICES ACT) AMENDMENT RULES 2009;]Recognised Body which is a limited liability partnership [;END DELETED MATTER;] [;BEGIN MATTER INSERTED ON 31 MARCH 2009 BY THE SOLICITORS' ACCOUNTS (LEGAL SERVICES ACT) AMENDMENT RULES 2009;]Limited Liability Partnership [;END INSERTED MATTER;] – each member of that [;BEGIN MATTER DELETED ON 31 MARCH 2009 BY THE SOLICITORS' ACCOUNTS (LEGAL SERVICES ACT) AMENDMENT RULES 2009;]body, and any person [;END DELETED MATTER;] [;BEGIN MATTER INSERTED ON 31 MARCH 2009 BY THE SOLICITORS' ACCOUNTS (LEGAL SERVICES ACT) AMENDMENT RULES 2009;]Limited Liability Partnership, and any solicitor, Registered European Lawyer or Registered Foreign Lawyer [;END INSERTED MATTER;]who is the ultimate owner of the whole or any part of a body corporate [;BEGIN MATTER INSERTED ON 31 MARCH 2009 BY THE SOLICITORS' ACCOUNTS (LEGAL SERVICES ACT) AMENDMENT RULES 2009;]or other legal person [;END INSERTED MATTER;]which is member of [;BEGIN MATTER DELETED ON 31 MARCH 2009 BY THE SOLICITORS' ACCOUNTS (LEGAL SERVICES ACT) AMENDMENT RULES 2009;]such Recognised Body [;END DELETED MATTER;] [;BEGIN MATTER INSERTED ON 31 MARCH 2009 BY THE SOLICITORS' ACCOUNTS (LEGAL SERVICES ACT) AMENDMENT RULES 2009;]the Limited Liability Partnership [;END INSERTED MATTER;].
where a [;BEGIN MATTER DELETED ON 31 MARCH 2009 BY THE SOLICITORS' ACCOUNTS (LEGAL SERVICES ACT) AMENDMENT RULES 2009;]Recognised Body is a partner or held out as a partner, all such persons as are referred to in [;END DELETED MATTER;] [;BEGIN MATTER INSERTED ON 31 MARCH 2009 BY THE SOLICITORS' ACCOUNTS (LEGAL SERVICES ACT) AMENDMENT RULES 2009;]body corporate or other legal person is a Partner in the Firm, all solicitors, Registered European Lawyers or Registered Foreign Lawyers who are within [;END INSERTED MATTER;]paragraph (a)(iii) of this definition (including sub paragraphs (A) and ( [;BEGIN MATTER DELETED ON 31 MARCH 2009 BY THE SOLICITORS' ACCOUNTS (LEGAL SERVICES ACT) AMENDMENT RULES 2009;]B [;END DELETED MATTER;] [;BEGIN MATTER INSERTED ON 31 MARCH 2009 BY THE SOLICITORS' ACCOUNTS (LEGAL SERVICES ACT) AMENDMENT RULES 2009;]C [;END INSERTED MATTER;]) thereof), paragraph (a)(iv) of this definition (including sub paragraphs (A) and ( [;BEGIN MATTER DELETED ON 31 MARCH 2009 BY THE SOLICITORS' ACCOUNTS (LEGAL SERVICES ACT) AMENDMENT RULES 2009;]B [;END DELETED MATTER;] [;BEGIN MATTER INSERTED ON 31 MARCH 2009 BY THE SOLICITORS' ACCOUNTS (LEGAL SERVICES ACT) AMENDMENT RULES 2009;]C [;END INSERTED MATTER;]) thereof), [;BEGIN MATTER DELETED ON 31 MARCH 2009 BY THE SOLICITORS' ACCOUNTS (LEGAL SERVICES ACT) AMENDMENT RULES 2009;]and [;END DELETED MATTER;] [;BEGIN MATTER INSERTED ON 31 MARCH 2009 BY THE SOLICITORS' ACCOUNTS (LEGAL SERVICES ACT) AMENDMENT RULES 2009;]or [;END INSERTED MATTER;] paragraph a(v) of this definition.
It is the duty of each Principal, under Rule 4, to ensure that the Firm has Qualifying Insurance at all times.
includes without limitation all the professional services provided by a Firm including acting as a personal representative, trustee, attorney, notary, [; BEGIN MATTER DELETED ON 1 OCTOBER 2009 ;]licensed [; END DELETED MATTER ;] insolvency practitioner or in any other role in conjunction with a Practice, and includes services provided pro bono publico, but does not include:
Practice carried on by a Solicitor or Registered European Lawyer in the course of employment with an employer other than a Firm; or
[;BEGIN MATTER INSERTED ON 31 MARCH 2009 BY THE SOLICITORS' ACCOUNTS (LEGAL SERVICES ACT) AMENDMENT RULES 2009;]Practice carried on through a Non-SRA Firm; or [;END INSERTED MATTER;]
such other offices as the Council may from time to time designate; or
[;BEGIN MATTER INSERTED ON 31 MARCH 2009 BY THE SOLICITORS' ACCOUNTS (LEGAL SERVICES ACT) AMENDMENT RULES 2009;](d) [;END INSERTED MATTER;] [;BEGIN MATTER DELETED ON 31 MARCH 2009 BY THE SOLICITORS' ACCOUNTS (LEGAL SERVICES ACT) AMENDMENT RULES 2009;](c) [;END DELETED MATTER;]
Practice consisting only of:
providing professional services without remuneration for friends, relatives, or companies wholly owned by the solicitor or Registered European Lawyer's family, or registered charities; or
administering oaths and taking affidavits.
If you are unsure whether you or your Practice fall within this definition, you should consult the Solicitors Regulation Authority. Contact details appear at the end of the introductory commentary.
means a single Policy which includes the Minimum Terms and Conditions, or more than one Policy which, taken together, include the Minimum Terms and Conditions, and each of which includes the Minimum Terms and Conditions except only in relation to the Sum Insured (as defined in the Minimum Terms and Conditions).
All Firms are required to take out and maintain, as a minimum, Qualifying Insurance. This may take the form of a single policy, or policies written by more than one Qualifying Insurer which together provide the minimum cover required under these Rules.
means an Authorised Insurer which has entered into a Qualifying Insurer's Agreement with the Society which remains in force for the purposes of underwriting new business at the date on which the relevant contract of Qualifying Insurance is made.
A list of all Qualifying Insurers appears on the website of the Solicitors Regulation Authority at www.sra.org.uk, and is also available from the Solicitors Regulation Authority. Contact details appear at the end of the introductory commentary.
Qualifying Insurer's Agreement
means an agreement in such terms as the Society may from time to time prescribe setting out the terms and conditions on which a Qualifying Insurer may provide professional indemnity insurance to solicitors and others in Private Practice in England and Wales.
A copy of this standard form agreement, which each Qualifying Insurer is required to enter into, is available on request from the Solicitors Regulation Authority. Contact details appear at the end of the introductory commentary.
means a body [;BEGIN MATTER DELETED ON 31 MARCH 2009 BY THE SOLICITORS' ACCOUNTS (LEGAL SERVICES ACT) AMENDMENT RULES 2009;]corporate [;END DELETED MATTER;]for the time being recognised [;BEGIN MATTER INSERTED ON 31 MARCH 2009 BY THE SOLICITORS' ACCOUNTS (LEGAL SERVICES ACT) AMENDMENT RULES 2009;]by the Solicitors Regulation Authority [;END INSERTED MATTER;]under section 9 of the Administration of Justice Act [;BEGIN MATTER DELETED ON 31 MARCH 2009 BY THE SOLICITORS' ACCOUNTS (LEGAL SERVICES ACT) AMENDMENT RULES 2009;]1985. [;END DELETED MATTER;] [;BEGIN MATTER INSERTED ON 31 MARCH 2009 BY THE SOLICITORS' ACCOUNTS (LEGAL SERVICES ACT) AMENDMENT RULES 2009;]1985 and the SRA Recognised Bodies Regulations [2009] [;END INSERTED MATTER;] .
[;BEGIN MATTER INSERTED ON 31 MARCH 2009 BY THE SOLICITORS' ACCOUNTS (LEGAL SERVICES ACT) AMENDMENT RULES 2009;]Recognised Sole Practitioner [;END INSERTED MATTER;]
[;BEGIN MATTER INSERTED ON 31 MARCH 2009 BY THE SOLICITORS' ACCOUNTS (LEGAL SERVICES ACT) AMENDMENT RULES 2009;]means a solicitor or Registered European Lawyer authorised by the Solicitors Regulation Authority under section 1B of the Solicitors Act 1974 to practise as a sole practitioner. [;END INSERTED MATTER;]
means an individual registered with the Society under regulation 17 of the European Communities (Lawyer's Practice) Regulations 2000.
means an individual registered with the Society under section 89 of the Courts and Legal Services Act 1990 .
means these rules as from time to time modified or amended.
means a Firm [;BEGIN MATTER INSERTED ON 31 MARCH 2009 BY THE SOLICITORS' ACCOUNTS (LEGAL SERVICES ACT) AMENDMENT RULES 2009;]or former Firm [;END INSERTED MATTER;]which has ceased to practise in circumstances where, in accordance with paragraph 5.1 of the Minimum Terms and Conditions, run-off cover is not required to be provided by any Qualifying Insurer.
means the Law Society of England and Wales.
means a person who has been admitted as a solicitor and whose name is on the roll (within the meaning of the Solicitors Act 1974) and who practises as a solicitor whether or not he or she has in force a practising certificate as referred to in that Act and also includes practice under home title of a former Registered European Lawyer who has become a solicitor.
[;BEGIN MATTER INSERTED ON 31 MARCH 2009 BY THE SOLICITORS' ACCOUNTS (LEGAL SERVICES ACT) AMENDMENT RULES 2009;]Solicitors Regulation Authority [;END INSERTED MATTER;]
[;BEGIN MATTER INSERTED ON 31 MARCH 2009 BY THE SOLICITORS' ACCOUNTS (LEGAL SERVICES ACT) AMENDMENT RULES 2009;]means the Solicitors Regulation Authority carrying out regulatory functions assigned to the Law Society as an Approved Regulator. [;END INSERTED MATTER;]
means such measures as the Council may from time to time require with a view to reducing the risk of claims being made against a Firm in the future or with a view to enabling a Firm in the future to obtain Qualifying Insurance outside the Assigned Risks Pool.
means run-off cover provided by the Solicitors Indemnity Fund following the expiry of run-off cover provided to a Firm in accordance with these Rules or otherwise under a Policy (but subject to compliance with the Minimum Terms and Conditions).
a reference to any statute, statutory provision, [; BEGIN MATTER INSERTED ON 1 OCTOBER 2009 ;]code [; END INSERTED MATTER ;] or regulation includes:
headings are for ease of reference only and shall not affect the interpretation of these Rules;
explanatory notes and commentary shall be ignored in interpreting these Rules; and
the appendices to these Rules form part of these Rules.
4 Obligation to effect insurance
All Firms carrying on a Practice during any Indemnity Period beginning on or after 1 October [; BEGIN MATTER DELETED ON 1 OCTOBER 2009 ;]2008 [; END DELETED MATTER ;] [; BEGIN MATTER DELETED ON 1 OCTOBER 2010 ;][; BEGIN MATTER INSERTED ON 1 OCTOBER 2009 ;]2009 [; END INSERTED MATTER ;] [; END DELETED MATTER ;][; BEGIN MATTER INSERTED ON 1 OCTOBER 2010 ;]2010 [; END INSERTED MATTER ;] must take out and maintain Qualifying Insurance under these Rules.
A solicitor or Registered European Lawyer is not required to take out and maintain Qualifying Insurance under these Rules in respect of work done as an employee or whilst otherwise directly engaged in the Practice of another Firm (including without limitation as an Appointed Person), where that Firm is required by these Rules to take out and maintain Qualifying Insurance.
Run-off Firm must apply in accordance with these Rules to be issued with an ARP Run-off Policy.
Under these Rules, Firms have a continuing obligation to ensure that they have Qualifying Insurance in place at all times with effect from 1 October [; BEGIN MATTER DELETED ON 1 OCTOBER 2009 ;]2008 [; END DELETED MATTER ;] [; BEGIN MATTER DELETED ON 1 OCTOBER 2010 ;][; BEGIN MATTER INSERTED ON 1 OCTOBER 2009 ;]2009 [; END INSERTED MATTER ;] [; END DELETED MATTER ;][; BEGIN MATTER INSERTED ON 1 OCTOBER 2010 ;]2010 [; END INSERTED MATTER ;]. Refer to the definitions of Practice, amongst others, to establish whether a Firm falls within the scope of these Rules. Firms should also check that any insurance that they take out in order to comply with these Rules (as opposed to any "top-up" cover) is taken out with a Qualifying Insurer. A list of Qualifying Insurers appears on the website of the Solicitors Regulation Authority at www.sra.org.uk, and is also available from the Solicitors Regulation Authority. Contact details appear at the end of the introductory commentary.
If a Firm cannot obtain a Policy from a Qualifying Insurer it should apply to join the Assigned Risks Pool in accordance with Part 3 of the Rules, if it is an Eligible Firm. If it is not an Eligible Firm, it must cease Practice.
Note that, under the Minimum Terms and Conditions, a Policy, once taken out, cannot be cancelled before the end of an Indemnity Period unless:
[; BEGIN MATTER INSERTED ON 1 OCTOBER 2009 ;](1) [; END INSERTED MATTER ;]the Policy is an ARP Policy and the Firm has replaced it with a Policy of Qualifying Insurance outside the Assigned Risks Pool; or
[; BEGIN MATTER INSERTED ON 1 OCTOBER 2009 ;](2) [; END INSERTED MATTER ;]the Firm merges with another Firm and a Policy of Qualifying Insurance is in place for the merged Firm; or
[; BEGIN MATTER INSERTED ON 1 OCTOBER 2009 ;](3) it subsequently transpires that the Firm was not in fact required to take out and maintain a Policy under these Rules; or [; END INSERTED MATTER ;]
[; BEGIN MATTER INSERTED ON 1 OCTOBER 2009 ;](4) in the case of an ARP Policy, it subsequently transpires that the Firm was not was not, or has ceased to be, an Eligible Firm; or [; END INSERTED MATTER ;]
[; BEGIN MATTER INSERTED ON 1 OCTOBER 2009 ;](5) [; END INSERTED MATTER ;]the Qualifying Insurer which issues the Policy becomes the subject of an Insolvency Event, and the Firm has replaced the Policy with another Policy of Qualifying Insurance.
The effect of cancellation in the circumstances described in (3) or (4) above is that the Firm ceases to have Qualifying Insurance in place with effect from the cancellation, and would therefore be in breach of Rule 4.1 if it were to carry on a Practice thereafter without taking out a new Policy.
Each Firm carrying on a Practice during any Indemnity Period beginning on or after 1 October [; BEGIN MATTER DELETED ON 1 OCTOBER 2009 ;]2008 [; END DELETED MATTER ;] [; BEGIN MATTER DELETED ON 1 OCTOBER 2010 ;][; BEGIN MATTER INSERTED ON 1 OCTOBER 2009 ;]2009 [; END INSERTED MATTER ;] [; END DELETED MATTER ;][; BEGIN MATTER INSERTED ON 1 OCTOBER 2010 ;]2010 [; END INSERTED MATTER ;], and any person who is a Principal of such a Firm, must ensure:
that the Firm has in place and maintains Qualifying Insurance outside the Assigned Risks Pool during any such Indemnity Period;
or, in the case of an Eligible Firm,
that the Firm has applied to enter the Assigned Risks Pool in accordance with the procedure set out in Rule 10;
in either case before the start of any relevant Indemnity Period or the start of Practice whichever is later.
A Run-off Firm, and any person who was a Principal of that Run-off Firm immediately prior to it becoming a Run-off Firm, must ensure that the Run-off Firm has applied to enter the Assigned Risks Pool in accordance with the procedure set out in Rule 13.4(a). Making such an application does not absolve any Firm or person from any breach of Rule 5.1.
A Firm which has continued to practise without Qualifying Insurance immediately prior to closing down is required to apply for Run-Off Cover through the Assigned Risks Pool, but the Firm and any Principal of the Firm may still face action for a breach of Rule 5.1 for practising without Qualifying Insurance.
6 Insolvency of Qualifying Insurer
that the Firm has in place Qualifying Insurance with another Qualifying Insurer which must be arranged as soon as may be reasonably practicable and in any event within four weeks of such an Insolvency Event;
that the Firm applies within that period of four weeks to enter the Assigned Risks Pool in accordance with the procedure set out in Rule 10.
It is important to be aware that the arrangements for professional indemnity insurance put in place by the Solicitors Regulation Authority do not seek to protect Firms against the insolvency of a Qualifying Insurer. If an Insolvency Event occurs in respect of an insurer, that insurer will cease to be a Qualifying Insurer for the purposes of [; BEGIN MATTER INSERTED ON 1 OCTOBER 2010 ;]writing new policies and Firms insured by that insurer must effect alternative insurance in accordance with [; END INSERTED MATTER ;] these Rules. This is because, in such circumstances, the insurer may not be in a position to pay claims in full. Any Firm which has qualifying insurance with a Qualifying Insurer which is the subject of an Insolvency Event [; BEGIN MATTER DELETED ON 1 OCTOBER 2010 ;]must [; END DELETED MATTER ;] [; BEGIN MATTER INSERTED ON 1 OCTOBER 2010 ;]is required [; END INSERTED MATTER ;] therefore [; BEGIN MATTER INSERTED ON 1 OCTOBER 2010 ;]to [; END INSERTED MATTER ;] obtain replacement cover as soon as possible, and in any event within four weeks of the Insolvency Event occurring. Having done so, a Firm should cancel the policy with the insolvent insurer and, if entitled to do so, seek a return of the premium relating to the balance of the Indemnity Period from the insurer which has become the subject of the Insolvency Event.
8 Registered European Lawyers
The special provisions contained in Appendix 3 to these Rules shall apply to a Firm that has at least one Principal who is a Registered European Lawyer.
PART 3: THE ASSIGNED RISKS POOL
9 Operation of the Assigned Risks Pool
The Assigned Risks Pool shall be managed by the ARP Manager.
10 Applying to the Assigned Risks Pool
Where a Firm carrying on a Practice has not obtained Qualifying Insurance outside the Assigned Risks Pool in respect of any Indemnity Period or part thereof to which these Rules apply it must, if an Eligible Firm, apply in accordance with the procedure set out in this Rule 10 to enter the Assigned Risks Pool, subject to Rule 10.2, before the start of the relevant Indemnity Period.
A Firm which for any reason does not have Qualifying Insurance in place should apply to the Assigned Risks Pool before the start of the relevant Indemnity Period if it is an Eligible Firm. However, it is important to note that premiums payable to the Assigned Risks Pool are intended to be high, and Firms would therefore be prudent to seek quotations from Qualifying Insurers outside the Assigned Risks Pool before the start of an Indemnity Period.
An ARP Policy can be cancelled if it is replaced by a Policy with a Qualifying Insurer. A return premium may be payable to a Firm which cancels an ARP Policy in these circumstances - refer to Appendix 2 for the basis on which the ARP Premium and any return premium is calculated.
Firms should also be aware of the other consequences of being insured through the Assigned Risks Pool set out in this part of the Rules, including the need to comply with any Special Measures under Rule 10, and the limitations on eligibility set out in the definition of "Eligible Firm".
[; BEGIN MATTER DELETED ON 1 OCTOBER 2010 ;]A Firm about to start carrying on a Practice which has not already obtained Qualifying Insurance outside the Assigned Risks Pool may, if an Eligible Firm, apply to enter the Assigned Risks Pool after the start of any relevant Indemnity Period. [; END DELETED MATTER ;]A Firm must not start carrying on a Practice without [; BEGIN MATTER DELETED ON 1 OCTOBER 2010 ;]either [; END DELETED MATTER ;] having obtained Qualifying Insurance outside the Assigned Risks Pool [; BEGIN MATTER DELETED ON 1 OCTOBER 2010 ;]or, alternatively, in the case of an Eligible Firm, without having applied in accordance with the procedure set out in this Rule 10 to enter the Assigned Risks Pool [; END DELETED MATTER ;].
Any Firm wishing to start up a new Practice must obtain Qualifying Insurance, [; BEGIN MATTER DELETED ON 1 OCTOBER 2010 ;]whether in the open market [; END DELETED MATTER ;] with a Qualifying Insurer [; BEGIN MATTER DELETED ON 1 OCTOBER 2010 ;]or through [; END DELETED MATTER ;] [; BEGIN MATTER INSERTED ON 1 OCTOBER 2010 ;]other than [; END INSERTED MATTER ;] the Assigned Risks Pool, before starting Practice. [; BEGIN MATTER INSERTED ON 1 OCTOBER 2010 ;]For the avoidance of doubt, a Firm which has not previously been regulated by the Solicitors Regulation Authority or a Non-SRA Firm that elects (and is accepted) for regulation by the SRA must also arrange Qualifying Insurance outside the Assigned Risks Pool in order to commence carrying on a Practice. [; END INSERTED MATTER ;] Subject to this requirement, a new Firm may start Practice at any time during an Indemnity Period.
By applying to enter the Assigned Risks Pool, the Firm and any person who is a Principal of that Firm agrees to, and (if the Firm is admitted to the Assigned Risks Pool) the Firm and any person who is a Principal of that Firm shall be jointly and severally liable to:
pay any costs and expenses incurred by the Society or the ARP Manager incurred as a result of any failure or delay by the Firm in complying with these Rules;
and shall be required to implement at the expense of the Firm any Special Measures.
Firms within the Assigned Risks Pool may be subject to a range of Special Measures. The appointed inspectors (in the first instance, the Forensic Investigations Unit of the Compliance Directorate) will visit a Firm insured through the Assigned Risks Pool to carry out investigation and monitoring of the Firm. This is in order to determine what Special Measures are appropriate for that Firm, and to ensure that those measures are fully implemented. It should be noted that the costs of investigation and monitoring by the Inspection & Investigation Directorate, costs and expenses incurred through any failure or delay by the Firm to comply, and the implementation of the Special Measures will be payable by the Firm concerned (and by any Principal of that Firm), in addition to paying the ARP Premium.
Any material misrepresentation made in an application for admission to the Assigned Risks Pool shall, subject to any waiver under Rule 19.1, render the Firm a Firm in Default for the purposes of Part 4 of these Rules. The provisions of that Part shall apply to the Firm as if that Firm had not been admitted to the Assigned Risks Pool but neither the Firm nor any Principal of the Firm shall be entitled to the refund of any ARP Premium paid to the ARP Manager. Any amount so paid shall be credited against any sums payable under Part 4 of these Rules.
Although an ARP Policy, once issued, cannot be cancelled (unless and until a replacement Policy with a Qualifying Insurer is issued to that Firm), a Firm which makes a material misrepresentation in its application to be admitted to the Assigned Risks Pool will be nevertheless treated in the same way as a Firm in Default.
The application for admission to the Assigned Risks Pool must be made to the ARP Manager on the proposal form provided by the ARP Manager.
The applicant must state on the proposal form the date from which cover is sought. This date must not be earlier than the date on which the application is made for admission to the Assigned Risks Pool. The applicant must also provide such other information as the ARP Manager requires for the purposes of setting a premium.
It is in the interests of the Firm and each of the Principals of that Firm to verify that the application to enter the Assigned Risks Pool has been received and that the Firm is insured. An application should be made before the start of an Indemnity Period. Failure to comply with the requirements of this Rule and Rules 13 to 15 will result in the Firm becoming a Firm in Default.
An applicant whose first application is deemed under Rule 10.9 not to have been made must, within seven days of the day when under Rule 10.9 the first application is deemed not to have been made, make a fresh application. The Firm and any person who is a Principal of the Firm must ensure that the Firm is in a position to prove to the reasonable satisfaction of the Society that the Firm's fresh application was delivered within those seven days to the ARP Manager at the address specified on the proposal form. Provided the Firm's fresh application was so delivered, the application shall be treated as having been made at the date when the Firm's first application was made. A Firm that is not in a position to prove to the reasonable satisfaction of the Society that its fresh application was so delivered shall be deemed not to have made any application.
the date on which the Firm obtains Qualifying Insurance outside the Assigned Risks Pool; or
the date when the Firm ceases to be an Eligible Firm.
An Eligible Firm which should have applied to the Assigned Risks Pool before the start of an Indemnity Period but fails to do so will have breached these Rules by failing to take out a Policy from the start of the Indemnity Period. It may make a later application, but will be liable to pay the ARP Default Premium for the Indemnity Period in question. Each Principal in an Eligible Firm which fails to make an application in time commits a disciplinary offence.
Any Firm in the Assigned Risks Pool, and any person who is a Principal of that Firm, is liable to pay to the ARP Manager the ARP Premium in respect of that Firm within thirty days of such premium being notified to it by the ARP Manager.
11 Special Measures
An Eligible Firm that has applied to enter the Assigned Risks Pool in accordance with the procedure set out in Rule 10 will be issued with an ARP Policy by the ARP Manager.
A copy of the standard-form ARP Policy is available on the website of the Solicitors Regulation Authority at www.sra.org.uk and is also available from the Solicitors Regulation Authority. Contact details appear at the end of the introductory commentary.
A Firm in the Assigned Risks Pool must if and to the extent required by the Council submit to investigation and monitoring by the Society and/or its agents, including investigation and monitoring:
to determine the reasons why Qualifying Insurance outside the Assigned Risks Pool was not obtained;
to ascertain what Special Measures should be taken by the Firm.
The Society's costs and expenses of the investigation and monitoring and the Society's costs and expenses of ascertaining what Special Measures should be taken and of monitoring them shall be met by the Firm and by any person who is a Principal of that Firm. The amount of such costs and expenses shall be determined by the Society which shall not be required to give any detailed breakdown thereof.
The appointed inspectors (in the first instance, the Forensic Investigations Department of the Inspection & Investigation Directorate) will visit a Firm insured through the Assigned Risks Pool to carry out investigation and monitoring. This is in order to determine what Special Measures should be taken and are appropriate for that Firm, and to ensure that those measures are fully implemented. It should be noted that the costs and expenses of investigation and monitoring by the Inspection & Investigation Directorate and the implementation of the Special Measures (together with VAT if applicable) will be payable by the Firm concerned (including each Principal of that Firm), in addition to paying the ARP Premium.
12 Time in the Assigned Risks Pool
A Firm may leave the Assigned Risks Pool at any time after it has satisfied the ARP Manager that the Firm has obtained Qualifying Insurance outside the Assigned Risks Pool at least until the expiry of the relevant Indemnity Period.
Refer to Appendix 2 to determine whether any return premium will be payable on leaving the Assigned Risks Pool.
Subject to Rule 12.7, a Firm may only remain in the Assigned Risks Pool so long as it is an Eligible Firm, or if it becomes a Run-off Firm.
Firms cannot remain insured through the Assigned Risks Pool for more than [; BEGIN MATTER DELETED ON 1 OCTOBER 2010 ;]24 [; END DELETED MATTER ;] [; BEGIN MATTER INSERTED ON 1 OCTOBER 2010 ;]12 [; END INSERTED MATTER ;] months in any [; BEGIN MATTER DELETED ON 1 OCTOBER 2010 ;]five year period [; END DELETED MATTER ;] [; BEGIN MATTER INSERTED ON 1 OCTOBER 2010 ;]four consecutive Indemnity Periods [; END INSERTED MATTER ;], and should therefore seek insurance in the open market with a Qualifying Insurer as soon as practicable. A Firm which is no longer an Eligible Firm (because, for example, it has already been insured through the Assigned Risks Pool for [; BEGIN MATTER DELETED ON 1 OCTOBER 2010 ;]24 [; END DELETED MATTER ;] [; BEGIN MATTER INSERTED ON 1 OCTOBER 2010 ;]12 [; END INSERTED MATTER ;] months in the last [; BEGIN MATTER DELETED ON 1 OCTOBER 2010 ;]five years [; END DELETED MATTER ;] [; BEGIN MATTER INSERTED ON 1 OCTOBER 2010 ;]four Indemnity Periods [; END INSERTED MATTER ;]) must either obtain Qualifying Insurance on the open market or cease carrying on Practice.
Subject to Rule 12.7(b), a Firm in Policy Default at the end of an Indemnity Period shall be deemed to be a Firm in Default for the purposes of Part 4 of these Rules and shall not be an Eligible Firm. This Rule shall not apply in any case where the Council is satisfied that there exists a genuine dispute between the Firm and a Qualifying Insurer or the ARP Manager which makes it unreasonable for the Firm to be deemed to be a Firm in Default pending the resolution of that dispute.
A Firm in Policy Default must remedy that default before the start of an Indemnity Period if it wishes to obtain insurance through the Assigned Risks Pool at any time during that Indemnity Period. Alternatively, it must either obtain Qualifying Insurance in the open market, or cease carrying on Practice. If a Firm believes that there is a genuine dispute which justifies that Firm not being deemed to be a Firm in Default, it should apply to the Solicitors Regulation Authority as soon as possible before the start of the next Indemnity Period. Contact details appear at the end of the introductory commentary.
A Firm that is no longer an Eligible Firm must either have Qualifying Insurance outside the Assigned Risks Pool or forthwith cease carrying on Practice.
Where the Practice of a Firm (the Original Firm) which has at any time been in the Assigned Risks Pool is split between two or more Firms (the Successor Firms), the Council may in its absolute discretion treat the Successor Firms or any of them and the Original Firm as being a single Firm for the purposes of determining whether the Successor Firms or any of them are or remain an Eligible Firm.
Where the Practice of a Firm (the Original Firm) which has at any time been in the Assigned Risks Pool is merged with, acquired, absorbed, or by any other means taken over by a Firm (the Successor Firm) the Council may in its absolute discretion treat the Successor Firm and the Original Firm as being a Single Firm for the purposes of determining whether the Successor Firm is or remains an Eligible Firm.
The purpose of this Rule is to ensure that the time limit on participation in the Assigned Risks Pool cannot be avoided by a merger or reconstitution of that Firm. A Firm which was not previously eligible to join the Assigned Risks Pool will not necessarily become an Eligible Firm by virtue of changes in the composition of a Firm. Firms which are unsure about their eligibility following any such change should consult the Solicitors Regulation Authority. Contact details appear at the end of the introductory commentary.
to allow a Firm to remain in or to re-enter the Assigned Risks Pool after any date when the Firm would otherwise cease to be an Eligible Firm; and
to permit a Firm to be admitted into or remain in or to re-enter the Assigned Risks Pool notwithstanding that the Firm is in Policy Default on such terms and conditions as the Council may prescribe including the taking of steps by the Firm by a specified date or dates to remedy the Policy Default;
It is envisaged that these powers would be exercised only in exceptional circumstances. Any application seeking the exercise of this power should be made to the Solicitors Regulation Authority at least three months before the Firm in question would otherwise cease to be an Eligible Firm.
13 Eligibility of Firms in Default
At any time during the Period of Default a Firm in Default is entitled to be admitted to the Assigned Risks Pool and to be issued with an ARP Policy in accordance with Rule 13.2, subject to the provisions of this Rule 13.
A Firm in Default is entitled to be admitted to the Assigned Risks Pool if:
[; BEGIN MATTER INSERTED ON 1 OCTOBER 2009 ;] (b)
had it been admitted to the Assigned Risks Pool at the start of the Period of Default, its admission at that time would not have rendered it ineligible to be admitted to the Assigned Risks Pool for any part of any subsequent Indemnity Period in which it was in fact admitted to the Assigned Risks Pool;
[; BEGIN MATTER DELETED ON 1 OCTOBER 2009 ;](b) [; END DELETED MATTER ;][; BEGIN MATTER INSERTED ON 1 OCTOBER 2009 ;](c) [; END INSERTED MATTER ;]
it has applied to join the Assigned Risks Pool in accordance with Rule 10;
[; BEGIN MATTER DELETED ON 1 OCTOBER 2009 ;](c) [; END DELETED MATTER ;][; BEGIN MATTER INSERTED ON 1 OCTOBER 2009 ;](d) [; END INSERTED MATTER ;]
[; BEGIN MATTER DELETED ON 1 OCTOBER 2009 ;](d) [; END DELETED MATTER ;][; BEGIN MATTER INSERTED ON 1 OCTOBER 2009 ;](e) [; END INSERTED MATTER ;]
the Firm will be subject to and comply with Rules 10.3(b) to 0 and 11.2.
If a Firm fails to make an application to the Assigned Risks Pool at the start of an Indemnity Period, and does not have any other Policy of Qualifying Insurance in force for that Indemnity Period, it may still be eligible to be issued with an ARP Policy provided that it meets all of the requirements of [; BEGIN MATTER DELETED ON 1 OCTOBER 2009 ;]Rule 13.1 [; END DELETED MATTER ;][; BEGIN MATTER INSERTED ON 1 OCTOBER 2009 ;]Rule 13.2 [; END INSERTED MATTER ;]. However, each Principal of the Firm will have committed a disciplinary offence, and the Firm and each Principal of that Firm will be liable to pay the ARP Default Premium under any ARP Policy issued.
An ARP Policy issued under this Rule may afford cover retrospectively from the start of the Period of Default until the [; BEGIN MATTER INSERTED ON 1 OCTOBER 2009 ;]earlier of [; END INSERTED MATTER ;] end of the then current Indemnity Period or, if earlier, the date on which the Firm in Default would have ceased to be an Eligible Firm, ignoring for these purposes any failure to pay the ARP Premium or the ARP Default Premium:
[; BEGIN MATTER INSERTED ON 1 OCTOBER 2009 ;](a) [; END INSERTED MATTER ;]
[; BEGIN MATTER INSERTED ON 1 OCTOBER 2009 ;]the [; END INSERTED MATTER ;] end of the then current Indemnity Period [; BEGIN MATTER DELETED ON 1 OCTOBER 2009 ;]or, if earlier, [; END DELETED MATTER ;][; BEGIN MATTER INSERTED ON 1 OCTOBER 2009 ;]; or [; END INSERTED MATTER ;]
[; BEGIN MATTER INSERTED ON 1 OCTOBER 2009 ;](b) [; END INSERTED MATTER ;]
the date on which the Firm in Default would have ceased to be an Eligible Firm, ignoring for these purposes any failure to pay the ARP Premium or the ARP Default Premium[; BEGIN MATTER DELETED ON 1 OCTOBER 2009 ;]: [; END DELETED MATTER ;] [; BEGIN MATTER INSERTED ON 1 OCTOBER 2009 ;]; or [; END INSERTED MATTER ;]
[; BEGIN MATTER INSERTED ON 1 OCTOBER 2009 ;](c) [; END INSERTED MATTER ;]
[; BEGIN MATTER INSERTED ON 1 OCTOBER 2009 ;]the date on which, had the Firm in Default been admitted to the Assigned Risks Pool at the start of the Period of Default, its being covered by the Assigned Risks Pool from that time would have first caused it to have been ineligible to be admitted to the Assigned Risks Pool for any part of any subsequent Indemnity Period in which it was in fact admitted to the Assigned Risks Pool. [; END INSERTED MATTER ;]
A Run-off Firm shall be entitled at any time following the date on which it first becomes a Run-off Firm to be admitted to the Assigned Risks Pool and to be issued with an ARP Run-off Policy, subject to the following conditions:
the Run-off Firm has made an application to join the Assigned Risks Pool in manner provided by Rule 10.5 stating on the proposal form that it is a Run-off Firm and giving the date from which cover under an ARP Run-off Policy is sought;
A Run-off Firm will be eligible to be issued with an ARP Policy if it meets all of the requirements of Rule 13.4. However, each Principal of the Firm will have committed a disciplinary offence for failing to make an application to the Assigned Risks Pool for run-off cover in accordance with Rule 5.2, and the Firm and each Principal of the Firm will be required to pay the ARP Run-off Premium under any ARP Run-off Policy issued.
An ARP Run-off Policy shall provide run-off cover to a Run-off Firm retrospectively from the date on which it became a Run-off Firm until the end of the day immediately prior to the sixth anniversary of:
Rule 12.7 shall apply so as to enable the Council to extend the period in [; BEGIN MATTER DELETED ON 1 OCTOBER 2009 ;]Rule 13.3 [; END DELETED MATTER ;][; BEGIN MATTER INSERTED ON 1 OCTOBER 2009 ;]Rule 13.3b [; END INSERTED MATTER ;] for which a Firm in Default may be issued with an ARP Policy.
It is envisaged that this power would be exercised only in exceptional circumstances.
Any Firm that has been admitted to the Assigned Risks Pool under Rule 13.1 shall for the purposes of computing its continuing eligibility to remain in the Assigned Risks Pool be deemed to have been admitted to the Assigned Risks Pool at start of the Period of Default and to have remained continuously in the Assigned Risks Pool until the end of the Indemnity Period current at the date of its application.
Rule 15.2 shall not apply to a Firm which has under Rule 13 been admitted to the Assigned Risks Pool and which has been issued with an ARP Policy or an ARP Run-off Policy, the liability of the Firm and of any person who is a Principal of that Firm being limited in those circumstances to the excess payable under the terms of the Policy.
14 Firms which fail to apply to the Assigned Risks Pool
A Firm in Default which is entitled to be admitted to the Assigned Risks Pool and to be issued with an ARP Policy in accordance with Rule 13.1 but which does not make an application to join the Assigned Risks Pool shall, notwithstanding, be liable, together with any person who is a Principal of that Firm, to pay to the Society an amount equivalent to the ARP Default Premium calculated for the whole of the Period of Default.
A Firm in Default which is entitled to be admitted to the Assigned Risks Pool and to be issued with an ARP Run-off Policy in accordance with Rules 13.4 and 13.5 but which does not make an application to join the Assigned Risks Pool shall, notwithstanding, be liable, together with any person who is a Principal of that Firm, to pay to the Society an amount equivalent to the ARP Run-off Premium calculated for the whole of the period equivalent to that which would be provided by an ARP Run-off Policy in accordance with Rule 13.5, or, if shorter and if it can be ascertained, the Period of Default.
If a Firm fails to make an application to the Assigned Risks Pool, but carries on Practice without having obtained Qualifying Insurance, each Principal in that Firm will have committed a disciplinary offence. The same is true if a Run-off Firm fails to apply to be issued with an ARP Run-off Policy. In each case, that Firm, and each Principal in that Firm, will also be liable under these Rules to:
15 Arrangements in relation to uninsured Firms
The ARP Manager on behalf of the Society shall make arrangements with Qualifying Insurers to cover any Claim (as defined in the Minimum Terms and Conditions) against:
including any Defence Costs (as defined in the Minimum Terms and Conditions) relating to a Claim, in like manner and to the like extent as the Claim and the Defence Costs would have been covered had that Firm during the Period of Default been in the Assigned Risks Pool and been issued with an ARP Policy and/or, as the case may require, an ARP Run-off Policy.
A Firm shall not be deemed to have been admitted to the Assigned Risks Pool or to be covered in accordance with Rule 15 solely by virtue of the fact that the ARP Manager may conduct or settle any claim made against that Firm under the terms of any agreement between the Society and any Qualifying Insurer.
16 Disciplinary consequences of failure to comply with these Rules
The provisions in Part 4 of the Rules are made without prejudice to the powers of the Council or the Society under the Solicitors Act 1974 , the Administration of Justice Act 1985 , the Courts and Legal Services Act 1990 or the European Communities (Lawyer's Practice) Regulations 2000 , or rules made under any of them, to bring disciplinary proceedings against any Firm that has failed to comply with these Rules or any person who is or was a Principal in such a Firm or to intervene in a Practice carried on by such a Firm.
Payment of the ARP Default Premium and/or the ARP Run-off Premium does not detract from the fact that the Firm in question, and each Principal of that Firm, has committed a breach of these Rules as a result of the Firm being a Firm in Default. If a Firm in Default is not an Eligible Firm, it must either obtain Qualifying Insurance in the open market, or cease carrying on Practice and make an application to the Assigned Risks Pool for run-off cover in accordance with Rule 5.2.
Policy Default and Special Measures are defined in Rule 3.1. Note that a Firm that is carrying on a Practice while in Policy Default will also not be an Eligible Firm for the purpose of seeking further cover through the Assigned Risks Pool.
Any Qualifying Insurer (including the ARP Manager) may, in relation to any Firm which applies to it for Qualifying Insurance, and in the case of the ARP Manager any Run-off Firm or Firm in Default, whether or not that Firm applies to enter the Assigned Risks Pool, bring to the attention of the Society (including, in the case of the matters referred to in Rule 17.1(f), the Legal Complaints Service[; BEGIN MATTER INSERTED ON 1 OCTOBER 2009 ;] and/or the Office for Legal Complaints [; END INSERTED MATTER ;][; BEGIN MATTER INSERTED ON 1 OCTOBER 2010 ;] (including the Legal Ombudsman) [; END INSERTED MATTER ;]) at any time and without notice to the Firm concerned:
any failure on the part of the Firm or any person who is a Principal of that Firm to pay any sum, including an ARP Premium, ARP Default Premium or ARP Run-off Premium, on or before the date specified in these Rules or to reimburse any amount falling within a Policy excess which has been paid out by a Qualifying Insurer to a claimant;
the fact that the Firm has become or is believed to have become a Run-off Firm;
any matter or circumstances that would entitle the Firm's Qualifying Insurer to avoid or repudiate a Policy but for the provisions of clause 4.1 of the Minimum Terms and Conditions (and/or the corresponding of the Policy);
any dishonesty or fraud suspected by a Qualifying Insurer on the part of any Insured as defined in the Minimum Terms and Conditions; and
All Firms, whether they obtain their Qualifying Insurance on the open market or through the Assigned Risks Pool, or whether, having failed to obtain Qualifying Insurance, they are subject to the provisions of Part 4 of these Rules, are deemed to have consented to their Qualifying Insurer or the ARP Manager bringing to the attention of the Solicitors Regulation Authority any of the matters referred to Rule 17.1 that may be applicable to the Firm. Any such information is subject to the confidentiality provisions of Rule 17.4.
The Legal Complaints Service of the Society [; BEGIN MATTER INSERTED ON 1 OCTOBER 2009 ;] and/or the Office for Legal Complaints [; END INSERTED MATTER ;][; BEGIN MATTER INSERTED ON 1 OCTOBER 2010 ;] (including the Legal Ombudsman) [; END INSERTED MATTER ;] may pass such information as it in its absolute discretion sees fit to any [; BEGIN MATTER DELETED ON 1 OCTOBER 2009 ;]other [; END DELETED MATTER ;] department or office of the Society, and to any Qualifying Insurer, including the ARP Manager, in relation to any complaint of inadequate professional services against a Firm of which it becomes aware.
The Council may require any Qualifying Insurer or the ARP Manager to bring to the attention of the Society any of the matters referred to in Rule 17.1 where it reasonably believes there are matters which ought to be brought to the attention of the Society in accordance with Rule 17.1.
In respect of any information that may be brought to the attention of the Society in accordance with Rules 17.1 to 17.3:
in relation to information about a Firm's Policy under Rule 18, disclosing that information, where and to the extent that the Society in its absolute discretion considers it appropriate, to any person entitled to such information, and to any other department or office of the Society, including without limitation to the Legal Complaints Service[; BEGIN MATTER INSERTED ON 1 OCTOBER 2009 ;] and/or the Office for Legal Complaints [; END INSERTED MATTER ;][; BEGIN MATTER INSERTED ON 1 OCTOBER 2010 ;] (including the Legal Ombudsman) [; END INSERTED MATTER ;].
18 Details of Qualifying Insurer
If a person (a Claimant) asserts a claim against a Firm or any person insured under that Firm's Policy, and where such claim relates to any matter within the scope of cover of the Minimum Terms and Conditions (whether or not such claim would or may be upheld), the Firm and any person who is at the relevant time (or, in the case of a Firm which has ceased Practice, any person who was immediately before that Firm ceased Practice) a Principal in that Firm shall be required, upon being so requested by that Claimant, by any person insured under that Firm's Policy, or by any other person with a legitimate interest, to provide to that person the following details in relation to that Firm's Policy:
A Firm, and each Principal in that Firm, is required to provide details of that Firm's policy of Qualifying Insurance to any person who asserts a claim against anyone insured under that Firm's Policy. Under Rule 17, the Solicitors Regulation Authority has the power to disclose information regarding a Firm's Qualifying Insurer where it considers it appropriate to do so.
19 Waiver powers
Any application by any person for a waiver of any Rule or part of any Rule under the Solicitors' Indemnity Insurance Rules 2001 to [; BEGIN MATTER DELETED ON 1 OCTOBER 2009 ;]2008 [; END DELETED MATTER ;] [; BEGIN MATTER DELETED ON 1 OCTOBER 2010 ;][; BEGIN MATTER INSERTED ON 1 OCTOBER 2009 ;]2009 [; END INSERTED MATTER ;] [; END DELETED MATTER ;][; BEGIN MATTER INSERTED ON 1 OCTOBER 2010 ;]2010 [; END INSERTED MATTER ;] must be made in writing to the Society as soon as reasonably practicable, and in any event no later than the relevant date set out below:
Solicitors' Indemnity Insurance Rules 2001
Relevant date - whichever is the later of:
30 November 2001; or
3 calendar months from the occurrence of any event or circumstances first giving rise to the obligation on that person under the relevant Rule or part of any Rule in respect of which the waiver application is or was made, but in any event no later than 30 November 2002.
Solicitors' Indemnity Insurance Rules 2002
30 November 2002; or
3 calendar months from the occurrence of any event or circumstances first giving rise to the obligation on that person under the relevant Rule or part of any Rule in respect of which the waiver application is or was made, but in any event no later than 30 November 2003.
Solicitors' Indemnity Insurance Rules 2003
30 November 2003; or
3 calendar months from the occurrence of any event or circumstances first giving rise to the obligation on that person under the relevant Rule or part of any Rule in respect of which the waiver application is or was made, but in any event no later than 31 December 2004.
Solicitors' Indemnity Insurance Rules 2004
31 December 2004; or
3 calendar months from the occurrence of any event or circumstances first giving rise to the obligation on that person under the relevant Rule or part of any Rule in respect of which the waiver application is or was made, but in any event no later than 31 December 2005.
Solicitors' Indemnity Insurance Rules 2005
31 December 2005; or
3 calendar months from the occurrence of any event or circumstances first giving rise to the obligation on that person under the relevant Rule or part of any Rule in respect of which the waiver application is or was made, but in any event no later than 31 December 2006.
Solicitors' Indemnity Insurance Rules 2006
31 December 2006; or
3 calendar months from the occurrence of any event or circumstances first giving rise to the obligation on that person under the relevant Rule or part of any Rule in respect of which the waiver application is or was made, but in any event no later than 31 December 2007.
Solicitors' Indemnity Insurance Rules 2007
31 December 2007; or
3 calendar months from the occurrence of any event or circumstances first giving rise to the obligation on that person under the relevant Rule or part of any Rule in respect of which the waiver application is or was made, but in any event no later than 31 December 2008.
Solicitors' Indemnity Insurance Rules 2008
31 December 2008; or
3 calendar months from the occurrence of any event or circumstances first giving rise to the obligation on that person under the relevant Rule or part of any Rule in respect of which the waiver application is or was made, but in any event no later than 31 December 2009.
[; BEGIN MATTER INSERTED ON 1 OCTOBER 2009 ;] Solicitors' Indemnity Insurance Rules 2009
31 December 2009; or
3 calendar months from the occurrence of any event or circumstances first giving rise to the obligation on that person under the relevant Rule or part of any Rule in respect of which the waiver application is or was made, but in any event no later than 31 December 2010.
[; BEGIN MATTER INSERTED ON 1 OCTOBER 2010 ;] Solicitors' Indemnity Insurance Rules 2010
31 December 2010; or
3 calendar months from the occurrence of any event or circumstances first giving rise to the obligation on that person under the relevant Rule or part of any Rule in respect of which the waiver application is or was made, but in any event no later than 31 December 2011.
Any appeal against any decision made by the Society in respect of any application for a waiver of any Rule or part of any Rule under the Solicitors' Indemnity Insurance Rules 2000 to [; BEGIN MATTER DELETED ON 1 OCTOBER 2009 ;]2008 [; END DELETED MATTER ;] [; BEGIN MATTER DELETED ON 1 OCTOBER 2010 ;][; BEGIN MATTER INSERTED ON 1 OCTOBER 2009 ;]2009 [; END INSERTED MATTER ;] [; END DELETED MATTER ;][; BEGIN MATTER INSERTED ON 1 OCTOBER 2010 ;]2010 [; END INSERTED MATTER ;]) must be made in writing to the Society within 21 days from the date of the decision.
An application for a waiver as contemplated by this Rule 19.1 or the making of an appeal against any decision made by the Society in respect of such application shall not relieve any person from any obligation under the Solicitors' Indemnity Insurance Rules 2000 to [; BEGIN MATTER DELETED ON 1 OCTOBER 2009 ;]2008 [; END DELETED MATTER ;] [; BEGIN MATTER DELETED ON 1 OCTOBER 2010 ;][; BEGIN MATTER INSERTED ON 1 OCTOBER 2009 ;]2009 [; END INSERTED MATTER ;] [; END DELETED MATTER ;][; BEGIN MATTER INSERTED ON 1 OCTOBER 2010 ;]2010 [; END INSERTED MATTER ;] pending the determination of any such application or appeal.
It is envisaged that Rules will be waived only in exceptional circumstances. Anyone who wishes to apply for a waiver, or to appeal against an initial decision, must do so in accordance with the time limits set out in this Rule. Contact details appear at the end of the introductory commentary. [; BEGIN MATTER DELETED ON 1 OCTOBER 2009 ;]The Professional Standards Appeal [; END DELETED MATTER ;] Panel [; BEGIN MATTER INSERTED ON 1 OCTOBER 2009 ;]of Adjudicators Sub Committee [; END INSERTED MATTER ;] has adopted a waiver policy, which is available on request. Unless and until any waiver is granted, the person concerned must comply with the requirements of these Rules in full. A waiver may be granted subject to conditions, and may be revoked without notice.
The Council shall have power to treat any Firm as complying with any Rule or Rules for the purposes of the Solicitors Act 1974 notwithstanding that the Firm has failed to comply with a Rule or Rules where such non-compliance is regarded by the Council in a particular case or cases as being insignificant.
For the purposes of the Solicitors Act 1974 (including without limitation section 10 of that Act ), any person who is in breach of any Rule or part of any Rule under the Solicitors' Indemnity Insurance Rules 2000 to [; BEGIN MATTER DELETED ON 1 OCTOBER 2009 ;]2008 [; END DELETED MATTER ;] [; BEGIN MATTER DELETED ON 1 OCTOBER 2010 ;][; BEGIN MATTER INSERTED ON 1 OCTOBER 2009 ;]2009 [; END INSERTED MATTER ;] [; END DELETED MATTER ;][; BEGIN MATTER INSERTED ON 1 OCTOBER 2010 ;]2010 [; END INSERTED MATTER ;] shall be deemed, for so long as he remains in breach, not to be complying with these Rules.
20 Accountants' reports
Any accountant's report which a solicitor or Registered European Lawyer or registered foreign lawyer who is a Principal in a Practice or a Recognised Body is required to deliver to the Society under section 34 of the Solicitors Act 1974 or paragraph 8 of Schedule 14 to the Courts and Legal Services Act 1990 containing such information as is prescribed by rule 35 of the Solicitors' Accounts Rules 1998 must contain a statement certifying (if it is the case) for the whole period covered by the report (excluding any part of that period falling before 1 September 2000) either that the Firm has one or more certificates of Qualifying Insurance outside the Assigned Risks Pool or that the Firm has been issued with one or more policies by the ARP Manager.