Fury as SIF fees hike hits home

Firms of all sizes have reacted with anger and confusion to letters from the crisis-hit Solicitors Indemnity Fund (SIF) notifying them of massive hikes in their fund contributions.

One leading figure, Dibb Lupton Alsop managing partner Nigel Knowles, said the City would be certain to back a campaign for SIF's monopoly to be abolished following the recent revelation of a £450m shortfall in the fund.

"I am absolutely certain that the firm which actually gets its act together and sets up an action group will achieve a result," he said, attacking the fund as a "disgrace".

Although the long-awaited letters were sent out this month, when many lawyers are on holiday, SIF received 50 letters of complaint within a week.

Some solicitors' premiums have doubled since last year, while others misunderstood the basis on which their premiums were calculated and received higher bills than expected.

Pannone & Partners managing partner Joy Kingsley said the firm had initially worked out the increase for the firm as 60 per cent, not the 50 per cent figure set by the Law Society Council. She attacked "lack of choice" of indemnity cover and said she was "horrified" at the increase.

Ann Alexander of Alexander Harris & Co said indemnity was now the "largest source of expenditure outside salaries".

But while Law Society Council members up and down the country have reported anger and dismay among their constituents, any move against SIF rules looks likely to come from the City - a firm with more than 50 partners faces a £1.1m bill this year compared to £700,000 in 1997/98.

Freshfields' managing partner Ian Terry was concerned City firms would bear a disproportionate share of the burden.

City Law Society chairman Anthony Pugh-Thomas is to propose the setting up of a working party to examine the way the fund operates.

Sole Practitioners' Group chairman Tim Readman said his group was gearing up to offer assistance to solicitors hit by the fees hike.

Private client specialist Cliona O'Tuama, whose premium has doubled, suggested rules requiring solicitors to use the SIF were anti-competitive.

But John Webber, managing partner at Russell Jones & Walker, warned against a "knee-jerk reaction".

A Law Society spokesman said the society had "every sympathy" with solicitors badly affected by the increase.