MEMBERS of the Law Society's ruling council have demanded an independent inquiry into the circumstances behind the Solicitors Indemnity Fund's shock announcement of a £248m shortfall in contributions.
Concern has also been expressed at the manner of last month's announcement by the SIF that law firms faced a possible 30 per cent hike in their contribution fees, largely due to an “onslaught” of conveyancing claims.
Although the shortfall was announced on the day of a full council meeting, council members were not informed of the news until after the meeting. Some members have suggested that the timing of the announcement, which may threaten the current drive for conveyancing rules to be relaxed to allow solicitors to set up property centres, was “no coincidence”.
Anthony Bogan, chair of the Solicitors Association, former Law Society president Martin Mears and deputy treasurer Robert Sayer are leading the calls for an inquiry.
Bogan predicted that the increase in contributions needed to make up the shortfall would put some firms out of business.
“I hope something tangible comes out of this. There needs to be a full and independent inquiry into the viability of continuing with compulsory mutual insurance,” he said. Commenting on the shortfall, Mears added: “When you've got a series of blunders of this magnitude you expect people to resign.”
John Franks, a veteran council member who represents West London, said the Law Society must now get its act together over conveyancing rules.
“Even £248m is not going to break the profession. But what will fire everybody is continuing with the same problems. We need to tackle the question of conveyancing.”
A Law Society spokesman said the council would look at what could be done to reduce the impact on the profession.
Elizabeth Mullins, managing director of the SIF, rejected claims that it had timed its announcement to influence the conveyancing debate.
She put the timing down to the fact that the SIF wanted to tell council members before publication of the annual report so they could look at the facts before the matter is debated by the council in March.