NOT a single large commercial firm wants to keep the Solicitors Indemnity Fund (SIF), according to a survey of the top 1,200 firms conducted by The Lawyer in conjunction with Pricewaterhouse Coopers.
The damning verdict on SIF – which is contained in this year's The Lawyer/Pricewaterhouse Coopers Financial Management in Law Firms survey – comes amid claims from disgruntled high street solicitors that the fund could be declared insolvent.
According to the survey nearly 70 per cent of firms with over 50 partners want to ditch a mutual fund and buy insurance on the open market. The remaining 30 per cent favour a “commercial mutual fund” – along the lines mooted recently by the November Group of City firms – independent of the Law Society.
Overall, half the profession want the open market and a quarter want to retain SIF with the rest in favour of a revamped commercial mutual.
The survey covers a broad range of firms in terms of geography and size and was carried out in May after the Law Society issued its consultation paper on the future of SIF in April.
Firms have until the end of July to respond to the Law Society which will debate SIF at the September council meeting.
In a separate development, the Solicitors Property Group (SPG) has sent documents to The Lawyer which show SIF's assets at £461m while its liabilities total over £1bn.
The document, written by an unnamed sole practitioner, states: “SIF is insolvent by ordinary reckoning and would find it difficult to resist a High Court application that it should be wound up.”
SPG executive officer Leslie Dubow said the SPG had no plans to apply for the fund to be wound up but it was open to any firm to do so.
Elizabeth Mullins, managing director of SIF, said a High Court action would fail because SIF could meet its liabilities as the Law Society council was empowered to levy any extra contributions necessary to meet the shortfall.
But Richard Green, partner with Bogan Gilson and member of SPG's executive committee, said: “While there is no doubt the council has the power to raise the shortfall, they are under no obligation to do so.
“It is politically impossible for the council to ask firms to come up with £60,000 each in one go.”