City lawyers are now demanding changes to SIF and are calling for measures which may effectively allow them to opt out of the fund altogether.
Law Society president, Michael Mathews – who voted to scrap SIF – says he wants the monopoly to look at more flexible “deductibles”.
A deductible is a set amount a firm has to pay itself on every claim. Each firm must be insured by SIF for £1m, but if given a £1m deductible, the firm could get this cover from the open market and thus break from SIF.
Freshfields managing partner, Ian Terry, comments: “If the deductible were to be raised to £1m, then you would in effect be giving the larger firms a commercial opt-out of SIF. I can't believe that SIF would wish to offer that, because it needs the revenue it gets from SIF.”
Elizabeth Mullins, managing director of SIF, promises that there will be a review of SIF, but says such generous deductibles are unlikely and that no decisions would be made until the summer.
“Some firms are asking for greater flexibility in the level of deductibles, but whatever is decided, it won't automatically allow firms to effectively go to the open market,” she says.
The vote on SIF could not have been much closer. This is how the members voted on
Tuesday – the constituencies they represent are in brackets:
FOR – Angus Andrew (West London); Margaret Anstey (West Country and Gwent); Robin ap Cynan (The Welsh Marches); John Aucott (Birmingham and District); Anthony Bogan (Surrey); Bill Boyes (North East London); Kenneth Byass (Leicestershire, Northamptonshire and Rutland); Nigel Dodds (Northumbria); Maria Fernandes (non-constituency); Richard Ford (West Country and Gwent); Tony Girling (Kent); Richard Hegarty (Bedfordshire and Cambridgeshire); Roger Ibbotson (Leeds); Michael Long (Inner Sussex); Kerry Macgill (non-constituency); Sue Nelson (The City of Westminster); Eileen Pembridge (South London); John Pickup (Cheshire and North Wales); Geoffrey Sandercock (West Country and Gwent); Derek Sands (Manchester, Salford, Stockport and District); David Savage (Berkshire and North Hampshire); John Sneary (Dorset); George Staple (The City of London); Phillip Sycamore (Central Lancashire and Northern Greater Manchester); Robert Venables (The City of Westminster); Paul Venton (Croydon and North Kent); Graham White (Hertfordshire); Fraser Whitehead (Holborn); Peter Williamson (Holborn); Andrew Wilson (Derbyshire and East Staffordshire); Roger Wilson (Outer Sussex); Sam Wilson (Suffolk and North Essex).
AGAINST – Meg Andrews (Yorkshire); John Appleby (Nottinghamshire); Kamlesh Bahl (non-constituency); David Baker (Hampshire and the Isle of Wight); Laurence Bennett (Merseyside and District); Angela Deacon (non-constituency); Louise Delahunty (The City of Westminster); Michael Franks (West London); Cyril Glasser (non-constituency); Philip Hamer (Yorkshire); Howard Hardy (Lincolnshire); Bill Heaselgrave (Wolverhampton and Staffordshire); Richard Henchley (non-constituency); Andrew Holyrod (Merseyside); Mike Howells (Mid and West Wales); Michael King (Oxfordshire and Buckinghamshire); Kevin Martin (Coventry and Warwickshire); Michael Mathews (The City of London); Pauline McBride (non-constituency); Martin Mears (Norfolk); Trevor Murray (Essex); Nancy Nagle (West Country and Gwent); Edward Nally (Central Lancashire and Northern Greater Manchester); Michael Napier (Yorkshire); Paul Pharaoh (Birmingham and District); Andrew Prickett (non-constituency); Robert Sayer (Central and South Middlesex); Hilary Siddle (Cumbria and Lancaster); Lucy Winskell (non-constituency).
APOLOGIES – Helen Davies (West Country and Gwent); Robin Healey (non-constituency); Philip Hodson (Manchester, Salford, Stockport and District); Jennifer Israel (North Middlesex); David Keating (Northumbria); Andrew Kennedy (non-constituency); Lesley MacDonagh (The City of London); David McIntosh (The City of London); Simon Mumford South Wales); Alasdair Nicholson (Holborn); Peter Raymond (non-constituency); Peter Urwin (non-constituency); Jane Whittaker (non-constituency); Fiona Woolf (The City of London).