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Law Society launches consultation on client protection fund

22 July 2015 | tagged News release

A major consultation has been launched on the consumer fund available to clients who fall victim to the dishonesty of Scottish solicitors.

The Law Society of Scotland has launched its three month consultation on the Scottish Solicitors’ Guarantee Fund following the completion of an independent review by KPMG earlier this year. 

The Society has already decided to change the operating name of the Fund to the ‘Client Protection Fund’.  This followed feedback to suggest the current name was confusing and misleading, a conclusion also reached by Sheriff Principal Bowen in a separate review of consumer protection in conveyancing cases.

The newly launched consultation will now look at who can claim from the fund as well as whom from the legal profession should finically contribute to it.  The Fund is currently financed by way of an annual levy on all solicitor partners in private practice, without any public money being used.

Carole Ford, the convener of the Law Society’s regulatory committee said: “By setting high standards for solicitors and regularly inspecting firms, the Law Society has an important responsibility to try and prevent problems from arising in the legal services market.

“We also need a robust system 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 the dishonesty of a solicitor or their staff.

“For over 60 years, the Guarantee Fund has been a cornerstone of the Scottish solicitor profession’s regulation, giving assurance to consumers and being funded entirely by solicitors without the use of taxpayers' money.  

“Following an independent review of the fund, we have decided the name itself is not fit for purpose and needs to be changed.  The name will change to the Client Protection Fund later this year, which will be easier for the public to understand.

“However, there are other issues.  Who should pay into the Fund?  Who should be able to make a claim?  Should there be new rules on capital adequacy and whistleblowing to try and prevent problems from arising and to allow for quicker action when those problems arise?  We are keen to hear views on these issues from solicitors and other organisations or individuals who have an interest in protecting the public, before we take any decisions”.

The consultation is open until 9 October 2015. 

The Society has also published a second consultation on entity regulation.  This follows a round of consultation last year and provides more detail on how entity regulation might work in practice. 


Notes to editor

The Guarantee Fund is enshrined in law through Section 43 of the Solicitors (Scotland) Act 1980 although it was first established by the Legal Aid and Solicitors (Scotland) Act 1949.

The Guarantee Fund is a fund of last resort and in most cases will only compensate those who have exhausted all other options of recovery.

The award of a grant is discretionary and is decided by the Society's Guarantee Fund Sub-committee or by staff with delegated authority, which is made up of experienced solicitors and people from outwith the legal profession altogether and is appointed by the Council of the Law Society.

A justifiable claim must satisfy a number of conditions;

•           The solicitor must have acted dishonestly in the course of their legal practice.

•           The claimant must have suffered monetary loss.

•           There must be no other means of recovering the money; for example, by suing the solicitor directly or making a negligence claim.

The fund is paid for entirely by solicitor firms without the use of taxpayer money from government.

More background information is available via the Law Society website.


More information on the consultation is available at


Please contact Val McEwan on 0131 226 8884 or  email

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