SRA Handbook

Indemnity

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Version 13 of the Handbook was published on 01/04/2015. For more information, please click 'History' Above

Rule 8: Indemnity

Indemnity for ceased practices

8.1

Any member of a previous practice which ceased on or before 31 August 2000 who has at any time been either:

(a)

an assured as a result of the issue of a certificate under one or more of the master policies, or

(b)

a person entitled to be indemnified by virtue of the issue of a receipt under the Solicitors' Indemnity Rules 1987-1990 or a payment of Contribution and Value Added Tax thereon as stated in the Solicitors' Indemnity Rules 1991-1999,

and who is not, at the time during the indemnity period when a claim is first made or intimated against him or her or when circumstances which might give rise to such a claim are first notified by him or her to Solicitors Indemnity Fund Limited, a person entitled or required to be indemnified in respect of claims arising from that previous practice by a policy of qualifying insurance or otherwise under the SIIR,

and the previous practice

shall be entitled to indemnity out of the fund in the manner, to the extent and subject to the conditions and exclusions set out in these Rules against:

(c)

all loss (including liability for third party claimants' costs) incurred by the previous practice or any member thereof at any time arising directly from:

(i)

any claim(s) first made or intimated against the previous practice or any member thereof during the indemnity period in respect of any description of civil liability whatsoever which may have been incurred in private practice by the previous practice or by a member as a member of such previous practice;

(ii)

any claim in respect of any such description of civil liability as aforesaid, made or intimated against the previous practice or any member thereof, whether during or subsequent to the indemnity period arising out of circumstances notified to Solicitors Indemnity Fund Limited during the indemnity period as circumstances which might give rise to such a claim; and

(d)

all costs and expenses incurred with the consent of Solicitors Indemnity Fund Limited (such consent not to be unreasonably withheld) in the defence or settlement or compromise of any such claim as aforesaid.

Eligible former principals

8.2

Rule 8.1 shall apply in addition in respect of any principal of a previous practice that is an eligible former principal.

8.3

In respect of any claim referred to in Rule 8.2 made by an eligible former principal, the extent of the indemnity (if any) to be provided by Solicitors Indemnity Fund Limited shall be limited to an amount equal to the lesser of:

(a)

the Due Proportion of the Deductible (excluding any Penalty Deductible) in respect of the eligible former principal that would have been disregarded by Solicitors Indemnity Fund Limited in relation to the claim had it been made under the Solicitors' Indemnity Rules 1999; and

(b)

such amount if any which the relevant successor practice is entitled to and seeks to recover from the eligible former principal in relation to the claim.

8.4

For the purposes of Rule 8.3, "Due Proportion", "Deductible" and "Penalty Deductible" shall have the meanings respectively given to them by the Solicitors' Indemnity Rules 1999, as set out in Schedule 1 to these Rules.

Expired run-off claims

8.5

Any firm or person shall be entitled to indemnity out of the fund in the manner, to the extent and subject to the conditions and exclusions set out in this Rule 8.5, in relation to an expired run-off claim, provided that:

(a)

such claim is first notified to Solicitors Indemnity Fund Limited at any time between 1 September 2007 and 30 September 2020; and

(b)

there is no preceding qualifying insurance which provides cover for such claim; and

(c)

such claim does not relate to or arise out of any claim first made against an insured or circumstances first notified to the provider of such preceding qualifying insurance, in either case at a time when such preceding qualifying insurance was required to provide cover in respect thereof; and

(d)

such person was an insured under the relevant preceding qualifying insurance.

Notwithstanding any other provision of these Rules:

(e)

the obligations of the fund and/or any insured in respect of an expired run-off claim shall be in accordance with, and limited to, the expired run-off cover; and

(f)

any obligation owed by any insured under the preceding qualifying insurance to the qualifying insurer which issued such insurance shall be deemed to be owed to Solicitors Indemnity Fund Limited in place of such qualifying insurer, unless and to the extent that Solicitors Indemnity Fund Limited in its absolute discretion otherwise agrees.