SIF reports £20m growth in accumulated surplus

The Solicitors Indemnity Fund (SIF) last week reported an increase in its accumulated surplus of more than £20m.

The Solicitors Indemnity Fund (SIF) last week reported an increase in its accumulated surplus of more than £20m.

In the last financial year, the fund’s accumulated surplus, or net profit, rose from £33.6m to £55.4m. Meanwhile, the number of open files fell to 3,526 as of August 2004, compared with 5,670 in August 2003.

SIF, the solicitors’ insurer which was owned by the Law Society, went into run-off on 1 September 2000 and now deals only with claims made against firms that ceased practising before that date. But the price of dealing with those outstanding claims is still high. The cost of using external solicitors fell only slightly, from £22.3m in the financial year ending 31 August 2003 to £18.3m in the equivalent period last year.

SIF employs a panel of 14 law firms to deal with claims. The panel firms are Barlow Lyde & Gilbert, Beachcroft Wansbroughs, Bond Pearce, Browne Jacobson, Cripps Harries Hall, Crutes, Fishburns, Henmans, Lovells, James Chapman & Co, Mills & Reeve, Morgan Cole, Reynolds Porter Chamberlain and Weightmans.

Meanwhile, an annual survey of professional indemnity cover shows that 19 per cent of solicitors’ firms changed brokers when renewing cover last year, up from 9 per cent in 2003.

The survey, carried out by risk management solicitors Legal Risk, found that ‘personal relationships’ was cited by 41 per cent of respondents as the principal reason for changing brokers. Of the respondents, 31.2 per cent stated that ‘service’ was what made them change.

Most firms buy between £50m and £100m of cover, but 14 per cent of the survey’s respondents said they had reduced indemnity cover in 2004.

Legal Risk surveyed the UK’s top 100 law firms by turnover.

Number of open files
Year ending No of files
31 August 2001 14,430
31 August 2002 8,676
31 August 2003 5,670
31 August 2004 3,526
Source: Solicitors Indemnity Fund

Cost of external solicitors
Year ending Cost (£m)
31 August 1999 68.5
31August 2000 58.5
31 August 2001 47.5
31 August 2002 39.5
31 August 2003 22.3
31 August 2004 18.3
Source: Solicitors Indemnity Fund