THE insurance industry is ready and willing to insure law firms on the open market, according to a report undertaken on behalf of the November Group of City firms which is fighting for the abolition of the Solicitors Indemnity Fund (SIF).
The report, by Trevor Moss of insurance brokers Nelson Hurst & Marsh, which specialises in insuring law firms, claims premiums last year for a range of firms would have been at least 40 per cent less if they had been able to get insurance on the open market.
It says confidential discussions with two insurers a leading Lloyd's syndicate and a large household name insurance company 'have resulted in an extremely positive response' about insuring on the open market.
However, the report concedes that of the 8,542 practices in England and Wales around 800 would have difficulties finding insurance in the market. It suggests that a much smaller SIF could be retained to act as a hospital for uninsurable firms.
The report will be discussed by the November Group's indemnity insurance working party this week when it will draw up its formal response to the plan to divide SIF into a series of separate mutual funds a plan which was devised by a Law Society working party headed by John Appleby.
The November Group's Paul Clements, a partner at Radcliffes Crossman Block, said: 'This is the first hard evidence that we have received that the commercial insurers will be able to provide the type of insurance that we might require.'
The November Group has threatened to seek a judicial review if the Law Society continues with a mutual indemnity insurance fund. The Lawyer understands a fighting fund has been set up to enable it to seek counsels' opinion on the matter.
Hammond Suddards partner Edward Coulson, one of two members of the Appleby working party who disagreed with its key recommendations, said the report confirmed his view that the open market option needed further investigation.
This Thursday the Law Society council will meet in private to decide how the profession should be consulted on the way forward for SIF, which is planning to publish its latest accounts in the next two weeks.
SIF managing director Elizabeth Mullins said the £450m shortfall had stabilised and categorically rejected a claim in the Nelson Hurst report that it had shot up to £650m.