Lawyers face a hike in their SIF contributions next year following the Law Society's decision last week to scrap the fund by September 2000.
The extra payments will provide cover for the surge of claims expected in the run-up to SIF's demise and provide cover for Year 2000 claims.
A Law Society spokeswoman says the exact figures have yet to be worked out, but should be ready for council consideration next month.
The long and tortuous campaign to scrap SIF and allow the profession to buy insurance through approved insurers culminated in the Law Society council voting to ditch the compulsory fund last week.
Lawyers can either insure themselves through approved insurers or through SIF's replacement – the Managing General Agency (MGA). The Law Society will be responsible for the MGA, a group scheme for lawyers who do not want to shop around.
A spokesman for City anti-SIF November Group says it welcomes the decision but warns: “There's a lot of hard work that remains to work through the detail and we would emphasise the devil lies in the detail.”
He says the group will collaborate with the Law Society to secure the best deal for the profession. But the November Group is maintaining its support for SIF rebel Michael Dalton, whose High Court challenge to SIF's legality kicks off on 6 July.
Wendy Gray, chairwoman of anti-SIF campaigner the Millennium Group, describes the probable contribution rise as a “double whammy”. She adds: “People will try and get claims in before the deadline because they know SIF are a soft touch. The MGA appears to be the 'Son of SIF' from the proposals I have seen. We will be stuck with the same culture. SIF has a 12-year history of failure. I can't see the market buying it.”
The council's decision to scrap SIF is a rapid U-turn on its original vote in March to keep the fund. Pressure on it to ditch SIF became too great after a postal ballot of the whole profession revealed more than 70 per cent of voters wanted the right to choose.
Last week, the council again almost opted to delay making a decision: an amendment calling for yet more consultation with the profession was narrowly defeated by 23 votes to 17 after a passionate plea for action by Law Society president Michael Mathews.
“The profession has lost confidence with SIF. It has decided – wisely or unwisely – for the open market. We can't abdicate responsibility and throw it all back open. We need to make a decision,” said Mathews.
Unlike the March vote, in which the votes of the four SIF directors swung the decision in favour of retaining the fund, the directors were this time not allowed to speak, never mind vote.
Angus Andrew, a solicitor at west London firm Osbornes, resigned from the SIF board in disgust, giving him the chance to speak at the debate.
The council plan will include the setting up of an assigned risks pool, which will allow firms that have problems gaining insurance on the open market – perhaps because of unacceptable claims records – to obtain cover.
SIF managing director Elizabeth Mullins comments: “There will be many in the profession who share our disappointment that this unparalleled scheme will shortly come to an end. However, it is time to move on.”
THE FALL AND FALL OF SIF
September 1987: Solicitors Indemnity Fund comes into effect.