THE LAW Society's top advisory body is urging the council to scrap the Solicitors Indemnity Fund (SIF) and let lawyers insure through a master policy, or on the open market.
The call by the Interim Executive Committee (IEC) will be made when the Law Society council meets to decide SIF's fate this week.
The recommendation - cautiously welcomed by anti-SIF campaigners - marks a victory for SIF rebel, Michael Dalton, since the IEC's decision was influenced by his bid to judicially review SIF's monopoly.
In an IEC statement, the Law Society acknowledges for the first time that the Portsmouth lawyer might have a case.
"The society has been advised that although it has strong arguments, the outcome of the Dalton case, or any subsequent litigation is by no means clear cut. The IEC considers that it would be unwise to continue with a monopoly mutual, since the consequences of SIF being ruled illegal would be disastrous for the profession."
Dalton says he welcomes the recommendation, but plans to pursue his case: "I am challenging SIF's right to
have a monopoly from 1996 onwards, against four years of premiums that I am unable and unwilling to pay."
Having discarded a mutual fund, or an approved insurer operating alone, IEC also rejected a mutual fund/open market plan, claiming the levy required to support the mutual "would not be acceptable to the profession".
The IEC's approved combination is a choice of one or two insurers providing a master policy on terms similar to SIF, or the use of approved insurers.
Law Society president Michael Mathews says this combination involves the profession paying an additional levy to ensure high-risk firms are not left without cover.
He denies the "assigned risk pool" would be used to prop up failing firms. These would be put on probation before cover is withdrawn, he says, and participation in the pool would be for a limited time only.
Paul Clements, spokesman for anti-SIF organisation the November Group, says: "We are pleased that SIF is not going to be the way forward, but we want to know more about how this scheme is going to operate."
Wendy Gray, spokeswoman for the Millennium Law Group, which is also anti-SIF, says that anything which moves towards an open market is a step forward, but stresses that a special general meeting called by her group for this week to discuss SIF is still on.