Solicitors Indemnity Fund Annual Report and Financial Statements For the Year ended 31 October 2024
June 2025
Purpose and principal activities of the fund
The Solicitors Indemnity Fund (SIF) is a statutory fund established in 1987 governed by the Solicitors' Indemnity Rules 1987 as amended from time to time. The Rules are presently made under sections 37, 79 and 80 of the Solicitors Act 1974, section 9 of the Administration of Justice Act 1985, and paragraph 19 of Schedule 11 of the Legal Services Act 2007, with the approval of the Legal Services Board under paragraph 19 of Schedule 4 to the Legal Services Act 2007. The Rules are now also known as the SRA Indemnity Rules.
The Fund provided indemnity in respect of the practices of solicitors, recognised bodies and registered foreign lawyers carried on wholly or in part in England and Wales until 31 August 2000, when the Council of The Law Society decided to require firms to purchase indemnity insurance in the open market. The Fund therefore went into run-off from 1 September 2000. This means that the Fund is still liable for claims relating to events that arose prior to this date.
The Council of The Law Society determined that from 1 September 2007 the Fund would also provide cover for new claims and settle the associated liabilities arising from firms insured in the open market which have ceased without successor subsequent to 1 September 2000 and where the requisite six-year run-off period provided by their last market insurer or the Assigned Risks Pool has elapsed. The Assigned Risks Pool (ARP) is a temporary insurance scheme for businesses that cannot get professional indemnity insurance (PII) on the open market.
This indemnity cover for expired run off claims, also referred to as 'post six-year run off claims', commenced on 1 September 2007 and ended on 30 September 2020, but was subsequently extended by an additional year to 30 September 2021. During 2021 this cover was extended further to cover claims to 30 September 2022 and during 2022 it was extended further again to cover claims to 30 September 2023. From 1 October 2023 the Solicitors Regulation Authority took control of the Fund and the cover was extended further with no specified end date for claims to be notified.
The purpose of the Fund is to manage:
- the ongoing notified claims arising from the pre-1 September 2000 period ('historic claims') and settle the associated liabilities arising. The number of notified cases has been decreasing as cases meet their statutory limitation periods and the number of claims outstanding has been decreasing as claims have been concluded.
- new claims arising from 1 September 2000 against practices that had ceased without successor prior to 1 September 2000 based on the work they delivered prior to that date and settle the associated liabilities arising ('historic claims').
- new claims and settle the associated liabilities arising from firms insured in the open market and which have ceased without successor subsequent to 1 September 2000 and where the requisite six-year run-off period provided by their last market insurer or the Assigned Risks Pool has elapsed ('post six-year run off claims').
- the claim recoveries, and any interest due on those recoveries, that have materialised as a result of a previous claim settlement.
The Fund holds an investment portfolio to fund the settlement of net liabilities on claims and the cost of handling those claims.
Administration of the fund
On 1 October 2023 the management and administration of SIF transferred from Solicitors Indemnity Fund Limited (SIFL) to Solicitors Regulation Authority Limited ('SRA'). From this point the SRA held, managed and administered the Fund, and the Directors of SRA have been responsible for the governance of SIF. SRA directly administers all of the assets and liabilities of SIF. In the prior year, up until 30 September 2023, Solicitors Indemnity Fund Limited (SIFL) held, managed and administered the Solicitors Indemnity Fund (the 'Fund'), and the Directors of SIFL were responsible for the governance of the Fund.