SRA Handbook

Management and administration of the fund

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Part 4: Management and administration of the fund

Rule 17: Powers of the Society

17.1

Solicitors Indemnity Fund Limited shall hold, and have full power to manage and administer, the fund, subject only to:

(a)

such directions, conditions and/or requirements as the Society may from time to time issue to or impose upon it expressly pursuant to this provision, and/or

(b)

such further detailed arrangements as the Society may from time to time agree with it.

17.2

Without limiting the generality of Rule 17.1, the management and administration of the fund shall include power to:

(a)

collect and recover contributions due to the fund in accordance with these Rules;

(b)

deposit or invest in such manner as Solicitors Indemnity Fund Limited may determine all or any part of the fund, including any interest, dividends, profits, gains or other assets accruing to or acquired by the fund;

(c)

arrange such insurances as Solicitors Indemnity Fund Limited may determine in respect of the fund and/or its assets and/or the fund's liability under these Rules to afford indemnity in respect of claims and costs and expenses; and to handle all aspects of any such insurances, including the payment of premiums thereon out of the fund and the making and recovery of claims thereunder;

(d)

receive, investigate and handle claims to indemnity and other notices prescribed to be given to Solicitors Indemnity Fund Limited by these Rules, including settlement and compromise and making of ex gratia payments out of the fund in respect thereof and conduct of any dispute or difference referred to arbitration under Rule 15;

(e)

receive, investigate and handle any claim made or intimated against any person in respect of which they are or may be entitled to be provided with indemnity out of the fund (whether or not a claim to indemnity hereunder has been made) and/or in respect of which the conduct is by these Rules assigned to Solicitors Indemnity Fund Limited, including settlement and compromise and making of ex gratia payments and conduct of any proceedings arising in respect of such claim;

(f)

claim and recover reimbursement in respect of any sums paid by way of indemnity in any circumstances in which such reimbursement may under these Rules be claimed;

(g)

exercise any right of subrogation save where such rights are waived in accordance with these Rules;

(h)

maintain full and proper records and statistics (which subject to Rule 18, shall at all reasonable times be available on request to the Society for inspection and copying) as to the fund and all aspects of its management and administration;

(i)

make to and review with the Council of the Society annually and at any other time that the Council may require, written and (if the Council so requires) oral reports as to the fund and, subject to Rule 18, its management and administration, including inter alia recommendations as to the contributions which are or may be required in respect of past, present and/or future indemnity periods and the circumstances in which, extent to which and conditions and exclusions subject to which indemnity should in any future indemnity period be afforded out of the fund;

(j)

engage the assistance of any third party in respect of all or any aspect(s) of the management and administration of the fund;

(k)

delegate to any third party all or any aspect(s) of the management and administration of the fund;

(l)

institute and/or conduct such proceedings as it may consider necessary or appropriate for the due management and administration of the fund in its own name or (subject to prior consent of the Society) in the name of the Society;

(m)

disburse and/or reimburse out of the fund all administrative and legal and other costs, overheads, fees and other expenses and liabilities incurred in respect of the fund, including without prejudice to the generality of the foregoing any such costs, overheads, fees and other expenses and liabilities incurred by the Society in respect of the establishment or maintenance, or the management, administration or protection, of the fund;

(n)

disburse and/or reimburse out of the fund payments for any educational, charitable or other useful purpose which in its opinion is likely directly or indirectly to lead to the reduction or prevention of claims on the fund or otherwise to further the purpose or interests of the fund;

(o)

disburse and/or reimburse out of the fund the costs, fees and expenses of the handling after 31 August 1987 of claims and potential claims against assureds notified under the master policies and master policy certificates;

(p)

effect out of the fund or by arrangement with third parties the funding pending reimbursement by master policy insurers of such claims and potential claims and to bear out of the fund the costs, fees and expenses incurred thereby.

Rule 18: Use of information

18.1

Without prejudice to the Society's power under Rule 4.5 to designate itself as the person responsible for holding, managing and administering the fund, information and documents obtained by Solicitors Indemnity Fund Limited about any particular practice or member thereof in the course of investigating and handling any claim made or intimated or any circumstances notified as mentioned in Rule 21, may be utilised by Solicitors Indemnity Fund Limited for the purpose of preparation of general records, statistics, reports and recommendations (not identifying the particular practice or member) for or to the Society.

18.2

Solicitors Indemnity Fund Limited may bring to the attention of the Society at any time and without notice to the practice or person concerned:

(a)

any failure to provide information in respect of any practice as required by Part III of the Solicitors' Indemnity Rules 2006 (or any earlier corresponding provisions) or any material omission or inaccuracy in such information;

(b)

any failure to pay any contribution or other sum due when required to do so under these Rules (or any earlier corresponding Rules) or to reimburse any amount due by way of a Deductible, Due Proportion or Penalty Deductible, or (in the case of an expired run-off claim) which falls within a policy excess;

(c)

a material inaccuracy in any proposal form submitted by or on behalf of a practice;

(d)

(in the case of an expired run-off claim) any matter or circumstances that would permit the expired run-off cover to be avoided or but for the provisions of clause 4.1 of the MTC (and/or the corresponding of the expired run-off cover);

(e)

any dishonesty or fraud suspected on the part of any person in relation to any practice or member thereof, or any other person subject to these Rules or any earlier corresponding Rules, or any insured; and

(f)

any claim of inadequate professional services of which it becomes aware made against any such practice, member or person or any insured.

18.3

Such information and documents shall not otherwise be disclosed or available to the Society without the prior consent of the practice (or any subsequent or successor practice thereto) or member concerned, except where Solicitors Indemnity Fund Limited or the Society have reason to suspect dishonesty on the part of any practice, previous practice, subsequent or successor practice or any member or former member thereof, or insured.

18.4

Any information and documents held by Solicitors Indemnity Fund Limited about a particular practice or member thereof may be disclosed or available to the Society without the prior consent of the practice (or any subsequent or successor practice thereto) or member concerned where the Society has been requested by any practice, subsequent or successor practice or member thereof to grant, amend or revoke any waiver under Rule 19 or to make a determination under Rule 20.

18.5

Solicitors Indemnity Fund Limited may pass to the Society the name of any practice (including any subsequent, successor or previous practice) or any member or former member thereof in circumstances where Solicitors Indemnity Fund Limited has cause for concern having regard to:

(a)

the nature, incidence or value of paid and/or reserved claims in respect of any such practice or member; or

(b)

the existence of circumstances which are considered by the fund to create an increased risk of claims occurring in respect of that practice or member; or

(c)

failure on the part of a practice or member thereof, or any insured, to comply with their obligations under these Rules (or any earlier corresponding Rules);

and for the purposes of paragraphs (b) and (c) above Solicitors Indemnity Fund Limited shall have the power to determine criteria which would indicate the likelihood of an increased risk of claims occurring and to specify those obligations in respect of which a failure to comply could form the basis for Solicitors Indemnity Fund Limited to pass on information.

18.6

In the exercise of the powers set out in Rule 18.5 Solicitors Indemnity Fund Limited may give details to the Society of the reasons for the decision to pass the name of the practice or member thereof to the Society including, in appropriate cases, releasing documentary information provided that no such documentary information will be released which could breach the general duty of confidentiality owed by a practice or member thereof to a client or former client.

18.7

In respect of any information that may be brought to the attention of the Society in accordance with Rules 18.1 to 18.6:

(a)

the Society shall keep all such information confidential;

(b)

the Society shall not (except where and to the extent required by law or in the proper performance by the Society of its regulatory functions) at any time reveal any such information to any person other than a duly authorised employee of the Society or any of its subsidiaries; and

(c)

any privilege attaching to such information shall not be regarded as having been waived whether by virtue of such information having been provided to the Society or otherwise;

but the provisions of this Rule 18.7 shall not prevent the Society from making use of any such information for the purpose of bringing disciplinary proceedings against any person.

Rule 19: Waivers

19.1

The Society shall have power in any case or class of cases to waive in writing prospectively or retrospectively any obligation on any solicitor, recognised body, licensed body or foreign lawyer under these Rules and to amend or revoke any such waiver.

19.2

Any application by any person for:

(a)

a waiver of any obligation under these Rules or under the Solicitors' Indemnity Rules 2001 or any Rules subsequent thereto; or

(b)

a correction or recalculation of any sum paid or payable to the fund under these Rules, or under the Solicitors' Indemnity Rules 2001 or any Rules subsequent thereto;

must be made in writing to the Society no later than 3 calendar months from the date on which the relevant obligation has effect in relation to that person, or the date on which that person is notified thereof by Solicitors Indemnity Fund Limited, whichever is the earlier.

19.3

No application by any person for:

(a)

a waiver of any obligation under the Solicitors' Indemnity Rules 2000 or any Rules made prior thereto; or

(b)

a correction or recalculation of any sum paid or payable to the fund under the Solicitors' Indemnity Rules 2000 or any Rules made prior thereto;

may be considered unless it was made in writing to the Society as soon as practicable, and in any event no later than 28 February 2002.

19.4

Any appeal against any decision made by the Society in respect of any application for a waiver of any obligation under these Rules or any previous Rules, or in respect of any correction or recalculation of any sum paid or payable to the fund under these Rules or any previous Rules, must be made in writing to the Society within 21 days from the date of the decision.

19.5

An application for a waiver as contemplated by this Rule 19 or the making of an appeal against any decision made by the Society in respect of such application shall not relieve any person from any obligation under these Rules or any previous Rules pending the determination of any such application or appeal.

Rule 20: Decisions by the Society

20.1

The Society shall have power to treat any person as complying with any provision of these Rules for the purposes of the SA notwithstanding that the person has failed to comply with any provision of these Rules where such non-compliance is regarded by the Society in a particular case or cases as being insignificant.