SRA provides Compensation Fund update

The Solicitors Regulation Authority (SRA) has announced that they will not be imposing an overall cap on claims against the compensation fund as a result of the Axiom Ince intervention. Furthermore, the SRA has provided information on how those claims will be prioritised going forward, such as the priority, in order to maintain the financial solvency of the fund.

This prioritisation approach, alongside managing the cashflow of the fund, means that the SRA will not be asking solicitors to make an in-year contribution at this stage – however, this is being reviewed on an on-going basis subject to further interventions or unforeseen events which will place additional demand on the fund.

It is important to note that this decision isn’t just off the back of Axiom Ince, but also the interventions and collapses of Metamorph and Kingly.

Ian Jeffery, Law Society of England and Wales, Chief Executive Officer, has said:

“As the representative body for the solicitor profession, we think it right that our members are not being asked to make an in-year contribution to the Compensation Fund. This decision will protect consumers and maintain public confidence in the fund.

We maintain that the solicitor profession must be consulted before any decision is made by the SRA on its future approach to such exceptional compensation questions, given that our members would be required to pay for it.

We will work with the SRA as it seeks to review whether its client protection and compensation fund arrangements are fit for purpose in the future.”