In her first interview since leaving the Solicitor’s Indemnity Fund, former managing director Elizabeth Mullins has denied that the fund’s £450m shortfall was the cause of its demise.
By mid-1998 SIF had a £450m shortfall and was forced to go cap in hand to the profession, a move which led to the Law Society vote to scrap it in May last year.
But Mullins, who now heads Zurich Professional’s solicitor business, believes that SIF was already on its last legs and the lack of funds was not the reason for its demise.
She says: “The debate over SIF would have taken place in any event as it was an issue for the profession.”
But a lawyer who was involved in developing one of the alternatives to SIF says that the old scheme was much better than alternatives.
“The shortfall was the straw that broke the camel’s back. SIF was the best solution for the profession. But the reason people voted against it was out of ignorance and almost entirely because of the accumulated shortfall,” he says.
Mullins says that following the announcement of the shortfall of £250m for 1993 to 1994, a complete review was carried out using actuaries of how the figures were calculated. SIF accordingly showed some improvements and all that was possible was done to remedy the situation.
Mullins’ appointment as SIFmanaging director came just as the true extent of the fund’s problems were coming to light, but she insists that she did not feel like a scapegoat. “I had been with the scheme for 16 years and when I took over I felt that we needed to get it right as a message to the profession.”
But she still believes there are issues surrounding giving indemnity cover to lawyers who repeatedly make claims and were always bailed out by SIF.
“The profession has to ask itself if those solicitors should be acting on behalf of clients,” she says.
Mullins takes two former colleagues, Sarah Venus and Andrew Nickels, to Zurich Professional with her.