I was interested to read your news item 'Call for free-market indemnity'. I agree completely with Clive Boxer and, of course we know that last year's Law Society President has also called for a review of the SIF monopoly.
When I joined with others earlier this year to found the Solicitors' Association we had, as one of our stated objectives, the abolition of the SIF monopoly. It seemed to us at the time wrong in principle to allow an insurance monopoly to exist within a social structure that exhorts both deregulation and free-market competition.
The problems usually associated with any monopoly are obvious: there is little incentive to maintain price competition or apply commercial principles in the administration and delivery of the particular product or service. SIF is no different: during the debates about conveyancing which occupied so much of the Law Society Council's time last year, it became abundantly clear that SIF had not built up a body of claims experience upon which meaningful policy decisions could be made and were opposed in principle to any measures which might have had the affect of removing certain areas of legal practice from the indemnity fund altogether.
Most professionals in this country are in a difficult position. Solicitors are obliged to compete for work in an unregulated and extremely cut-throat marketplace. That same market is then distorted by the existence of a rigorous, expensive and highly regulated set of compulsory professional standards. One or the other has to go before a combination of rock-bottom fees and an absolute guarantee forces the majority of firms into bankruptcy – leaving the minority in a monopoly situation.