Law Society rejects SLCC statements on the Guarantee Fund
The Law Society of Scotland has strongly rejected suggestions
relating to the Guarantee Fund which are contained within the
Scottish Legal Complaints Commission (SLCC) annual report for 2011
as published earlier today.
As part of its annual report, the SLCC refers to the Guarantee
Fund which exists to protect clients who have lost money as a
result of the dishonesty of a solicitor or firm.
The SLCC annual report states that:
"There is a statistical relationship between the number and
total value of the claims made on the fund in the same year as an
individual claim, and the level of payment made in individual
claims. This suggests that the outcome of claims is influenced by
factors other than the merits of the claims"
The Society has today rejected this assertion as wholly
misleading as the merit of the individual claim remains the only
consideration when considering the outcome of that claim and any
subsequent payment from the Guarantee Fund. This was clearly
explained to the SLCC in meetings and in written correspondence
from the President of the Society, all in advance of today's report
publication.
With the SLCC annual report being laid before the Scottish
Parliament, the Society has today written to the Cabinet Secretary
for Justice and opposition justice spokespeople to clarify the
situation and give a more accurate picture.
Alistair Morris, convener of the Society's Guarantee Fund
committee, said: "It is deeply frustrating that the SLCC suggests
the outcome of Guarantee Fund claims are influenced by factors
beyond the merits of the claim, especially when we have made it
clear verbally and in writing that such a suggestion is wholly
wrong. It is even more concerning that the SLCC do not even
refer to those assurances from the Society in their report.
"The Society co-operated fully with the SLCC when it
commissioned research into the Guarantee Fund earlier this year.
However we raised significant concerns at the misleading and
potentially damaging interpretation of raw statistical data
relating to the Guarantee Fund which suggests that the amount paid
out in any claim is dependent on the sums held in the fund at
any one time.
"We have made it clear to the SLCC, both verbally and in
writing, that all Guarantee Fund claims are considered entirely on
a case by case basis and on their own merit, regardless of the
funds held. It is extremely disappointing that the SLCC annual
report now risks misleading people into thinking that the outcomes
of Guarantee Fund claims go beyond their individual merits.
"There are significant reserves held in the Guarantee Fund
currently. Additionally, it is backed by Stop Loss Insurance
amounting to £6 million and the legislation covering the Fund
allows the Society to levy members if we faced circumstances where
there were insufficient funds in the Guarantee Fund and Stop Loss
Cover to cover the cost of a claim.
"Following our discussions with the SLCC we were informed that
it intended to commission further research as a result of some of
these initial findings. I hope this goes ahead and there will be an
opportunity to demonstrate that this statement contained within the
annual report laid before the Scottish Parliament is inaccurate and
misleading."
NOTES TO EDITOR
The Scottish Solicitors' Guarantee Fund protects those who have
lost money because of the dishonesty of a solicitor or a member of
their staff. It is a fund of last resort, which means it can only
compensate those who have exhausted all other options of recovery.
The award of a grant is discretionary. All firms in Scotland
contribute annually to the fund
16 December 2011