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New compliance toolkit to help smaller practices with PII

Small firms struggling to secure affordable professional indemnity cover will have access to special rates thanks to a new compliance toolkit designed by pioneering virtual law firm Scott-Moncrieff and Associates.

18 April 2011

“Small firms and sole practitioners have problems with PII because they are less likely to have somebody to deal with risk and compliance, which insurers view with greater suspicion,” said founder Lucy Scott-Moncrieff.

Scott-Moncrieff set up her own firm as the first virtual practice in the late 1980s, primarily handling legal aid cases. Benefits to solicitor members include access to lower PII premiums negotiated at network level.

Joining the scheme will involve preliminary vetting by Surelaw’s brokers, Hera Indemnity, and an audit by Surelaw reviewing the applicant’s risk assessment and

management systems. Starting at £5,000, membership of the scheme will represent a substantial outlay for firms but Scott-Moncrieff said it should far outweigh the cost of obtaining cover outside the scheme.

Compliance will become a separate challenge for smaller firms with the introduction of the new SRA entity-neutral handbook in October, which will require all firms to have compliance officers for legal practice (COLPs) and for finance and administration (COFAs).

SRA chief executive Antony Townsend said in order to absorb the regulatory burden smaller firms and sole practitioners could share some support functions where appropriate, including COLPs and COFAs. He warned, however, that each firm will have to have its own COLP and COFA, who must be either a manager or employee of the firm.

“Although it is possible for individuals to hold positions in more than one firm, the work of COLPs and COFAs is closely integrated with the daily workings of their firm and requires them to have sufficient seniority,” he said. “To fulfil the role in more than one firm, individuals would need to have the necessary capacity, as well as the SRA’s approval of their designation, taking into account all circumstances.”

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Professional indemnity Regulators Legal Aid