A group of 35 top law firms is threatening legal action against the Law Society if it does not swiftly revamp the Solicitors Indemnity Fund (SIF).
Known as the November Group, the firms – most of which are among the top 50 in the country – are seeking the right to get private sector indemnity insurance. They are angered by the £450m shortfall announced by SIF this year, and by the fact that firms with poor claims records are not thrown out of the fund.
The firms are pooling financial resources and threatening to seek a judicial review of Law Society rules that keep them bound to the mutual fund.
The November Group will await the January release of the Law Society report by John Appleby, which will outline future indemnity insurance options for the profession, before finalising future action.
Earlier this year the firms set up a working group, comprising representatives from Bird & Bird, Dibb Lupton Alsop, Hill Dickinson and Radcliffes Crossman Block, and chaired by Christopher Hales of Holman Fenwick & Willan.
Holman Fenwick partnership chairman Jonathan Fine said the firms would give the Appleby committee a chance, but warned that they would not hesitate to challenge SIF's supremacy.
“We envisage debate first, and dispute with the Law Society later,” said Fine.
He added that the group, which Holman Fenwick first brought together more than two years ago, was not opposed in principle to a mutual fund, though it is unhappy with how it has been managed.
However, The Lawyer has learned that Clifford Chance pulled out of the group last summer because it seemed to be intent on abolishing SIF. Clifford Chance argues that the £450m shortfall has to be paid off, whether SIF is abolished or not, and there is no guarantee yet that the private sector will offer a better insurance deal.
Law Society council member John Appleby has urged the rebelling firms to take a “rational approach”, and not to prejudge his committee's report.
But November group member firm Hammond Suddards is in little mood for compromise. “We want out,” senior partner John Heller told The Lawyer while attending the
International Bar Association conference in New Delhi.
“What's the point of being in an organisation that cannot get its reserves rights? If you join Sun Alliance and pay a premium, they can't come back and ask for more money.”