A lone voice in the wilderness

This is all well and good, but those in the know – such as brokers, insurers and lenders – are not supporting these suggested changes wholeheartedly. In fact, in many cases it is quite the opposite.

I have been told off the record by two large lenders that: “The suggestions are a serious matter for us. I don’t believe the answer is such a blanket change which appears to have been hastily pulled together and with limited time to respond given the implications within
the consultation.” And second that: “This subject is now causing concern with lenders, if we can’t rely on an insurance policy at all, then I can see that some lenders will take the view that they can’t take the risk.”

Ryan Senior, director at Aon Risk Solutions has said: “We believe that the proposed changes to PII have the potential to significantly impact the industry as a whole and could be very damaging. As such, we would strongly recommend that you consider responding to the SRA on behalf of your firm.”

I do not believe that the proposed changes would transfer significant risk from the insurer to the law firm. I would not expect beneficial reductions in premiums or easier access to cover.

The other issue is that very
few firms respond to SRA consultations, for a variety of reasons. First there are time constraints. Like most practitioners, I already spend
at least 50 per cent of my time
doing management.

Second, there is a feeling that responding is totally pointless, because decisions have already been made. The trouble with the SRA’s consultations is that none of us believe that our comments or views will make any difference.

Third, there is concern among firms about putting their heads above the parapet with the SRA. No one wants to email the SRA. It feels like poking an angry bear with a stick.

Last, there is a reluctance to be a voice in the wilderness. How many ‘lone voices’ will feel that their input will actually be heard and make any difference at all.

Another problem is that the SRA launched four consultations on the same day, allowing only six weeks to respond. For a busy solicitor, six weeks to respond to one consultation is barely enough, let alone to respond to four.

An earlier consultation saw
the SRA reject a proposal that unrated insurers be banned from acting as participating insurers. That consultation received just
31 responses.

I have been badgering my member firms to respond. Consequently, I hope the SRA has received additional responses to the PII consultation. I doubt it has received many.

The SRA should reopen the
four consultations and should be working a lot harder on not alienating the firms it regulates, especially if it really wants
their input. SJ

Rob Hailstone is director of Bold Legal Group

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