CLOSURE OF 136 LAW FIRMS NATIONWIDE: COMMENT FROM BIRMINGHAM LAW SOCIETY

Birmingham Law Society deeply regrets the fact that so many firms have been forced to close their doors by reason of their not being able to obtain professional indemnity (PI) insurance cover as required by the Solicitors Regulation Authority (SRA).

The majority of these firms have been closing down and winding up their practices in an orderly fashion over the last 4-6 weeks. These will have largely been proactive decisions to close, based on financial difficulties.

The effects of these closures on the solicitors, their assistants, staff and families, and the inconvenience for their respective clients is, however, extremely saddening.

It is very important that the following issues should be noted:

1. Solicitors cannot practice without compulsory Insurance cover, as required by the Solicitors Regulation Authority.

2. Failure to obtain insurance cover does not indicate any criminal action on the part of any partner or member of staff in any of the firms that the SRA have announced are forced to close.

3. Each firm has closed because it has not been able to obtain insurance cover for instance:

(a) Where the insurer has declined to provide cover
(b) The insurer has offered cover but upon terms or at a premium that the affected firm could not satisfy.
(c) Partners of the firm were unable to afford to pay for Insurance cover.

Firms authorised by the SRA to deliver legal services must have insurance – it is a public protection measure.

As will be noted from the list of the firms produced by the SRA, four small firms in the Birmingham area have been forced to close. At the time of going to press none of the partners of those affected firms have approached Birmingham Law Society for assistance or guidance. Birmingham Law Society remains committed to assist those firms under pressure in whatever manner Birmingham Law Society is able to assist.

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