Future of solicitors' Guarantee Fund goes out to views

The future of the scheme designed to protect clients in cases of dishonesty by a Scottish solicitor is the subject of a major consultation launched today by the Law Society of Scotland.

Its three month consultation on the Scottish Solicitors’ Guarantee Fund follows 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 which suggested that 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.

Today's consultation considers who can claim from the fund, as well as who from the legal profession should financially 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, convener of the 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."

Commenting that the change of name would make it easier for clients to understand, she added: “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.”

Click here to access the consultation, which is open until 9 October 2015.

• The Society has also published a second consultation on entity regulation, which can be accessed from the same link. This follows a round of consultation last year and provides more detail on how entity-based regulation might work in practice. It looks in more detail at experience in other jurisdictions that are using or are looking at using an entity-based model, and asks more specific questions around how such a system would work in practice in Scotland.