Solicitors had to pay their indemnity insurance premium in one lump on 1 October, and it can be a hefty chunk of the projected turnover for the year. Apparently a lot of firms have just closed rather than pay it, because business is so bad.

According to “industry professionals”, in addition to the firms who just gave in and closed, up to 500 solicitors’ firms fell into the “Assigned Risks Pool” - the ARP - which is a kind of self-funded insurance pool for solicitors who can’t get insurance cover in the marketplace. [Thanks to whoever you are, for putting me right on what ARP stands for.] This could mean they simply didn’t get it arranged in time, or they were relying on a quote from just one insurer which didn’t come. But it does sound like an awful lof of solicitors’ firms couldn’t afford the one-off premium when the deadline came, or couldn’t arrange financing for it.

Until now, personally I have not seen much evidence of firms going under, but 500 firms going into the ARP sounds fairly catastrophic to me.

The Law Society Gazette also says indemnity insurance premiums were up 40% this year, which couldn’t have helped either. But maybe not all firms were hit. Our premiums were actually 10% down on last year.