Law Society to hold 'root and branch' review of consumer compensation fund
The Law Society of Scotland has announced a wide-ranging and independent review of the compensation fund which is available for people who suffer financial loss through solicitor dishonesty.
The Scottish Solicitors' Guarantee Fund is funded entirely by the owners of solicitor firms through an annual payment and without the use of taxpayer money. The scheme is enshrined in legislation and acts as a fund of last resort for clients who have lost money through the dishonesty of Scottish solicitors and their staff.
Applications for payments from the fund are considered by a Law Society committee made up of experienced solicitors and members of the public from outwith the legal profession. Grants of over £1 million were approved from the fund in 2011/12, a sharp increase from the previous year following a number of Judicial Factor appointments.
As the administers of the Guarantee Fund, the Law Society has announced a full review which will be carried out independently following an open tender process. The review will study the purpose of the Guarantee Fund along with the cover and benefits it provides to consumers. It will also consider the funding and governance arrangements and how these fit with the rapidly changing legal marketplace. The review is expected to be completed over the next 12 months with a report and recommendations made to the Society's Regulatory Committee.
Carole Ford, the non-solicitor Convener of the Society's Regulatory Committee, said: "By setting high standards for solicitors and regularly inspecting firms, our first responsibility is to try and prevent problems from arising in the first place. However, we also need a robust scheme that protects innocent clients when things do go wrong, particularly when clients lose money through no fault of their own and as a result of a solicitor's dishonesty.
"For over 60 years, the Guarantee Fund has been a cornerstone of the Scottish solicitor profession, giving assurance to consumers and being funded entirely by solicitors without the use of taxpayers' money. Maintaining the fund and considering applications for payments from affected clients are just some of the many ways in which the Law Society works to protect the public interest.
"However, we know the legal market is changing and changing rapidly. That is why now is the right time to have a root and branch review of the fund and consider whether the arrangements put in place by legislation are still effective and appropriate for today."
Notes to editors
More detailed information on the Guarantee Fund is available via the Society's website.
The Guarantee Fund financial report for 2011/12 is available via the following link.
The Guarantee Fund is provided for in section 42 of the Solicitors (Scotland) Act 1980 although it was first established by the Legal Aid and Solicitors (Scotland) Act 1949.
FOR FURTHER INFORMATION: Please contact Val McEwan on 0131 226 8884 / firstname.lastname@example.org
21 November 2013