How To Deal With A PII Renewal Refusal

With daily stories in the legal press about the hardest Professional Indemnity Insurance (PII) market for years and the October deadline looming for most solicitors to renew, Steve Roberts, a partner in our specialist SRA team considers how to cope in the event you do not obtain renewal.
It is probably the worst nightmare for any owner or manager of a law firm to be faced with the prospect of being unable to renew their PII. But what does that actually mean and how can you best plan to move forward.

Extended Policy Period

If you have failed to obtain PII renewal, your firm will still be covered by its existing PII policy for the Extended Policy Period. This means that you can operate as normal for a period of 30 days. This will be followed by a cessation period of 60 days where you are unable to accept any new instructions. During this period, you will either need to secure PII, arrange for another firm to become a successor practice or close your firm. If you are looking to sell or merge your business with another firm who can become a successor practice, it is important to note that 90 days is a very short period in which to secure an agreement and for all parties to complete the required due diligence. Even where negotiations are ongoing, you need to be prepared for the possibility that the firm will need to close.

Firm Closure

This can often be the hardest decision for any solicitor to make but if you are unable to obtain PII, it is imperative that you close your firm properly. A failure to do so can lead to an intervention by the SRA which can have disastrous consequences in terms of both the costs of the intervention payable by the principals and disciplinary action being taken against the owners and managers. Our handy guide of things to consider when closing a firm is a good place to start.

The Future

Even where you have had to close your firm, you will still need to consider what you are going to do in the future. It might be that you need to continue to work either to maintain your lifestyle or to fund the payment of run-off cover insurance. Having been a manager or owner of your own firm, it can be difficult to return to being an employed solicitor but there are other options available.

Many firms offer solicitors an opportunity to work as a consultant solicitor on a fee share basis. This would provide the freedom to work on your own terms whilst someone else takes on the administrative and compliance burden. It may be that you can arrange transfers for your clients from your closed firm which will preserve your WIP and secure a smooth transition for clients. Richard Nelson LLP offers consultancy opportunities at competitive rates, more information can be found here.

Alternatively, the 2019 Authorisation of Individuals Regulations at Regulation 10.2 do offer solicitors the opportunity to work as freelance solicitors without the need to be authorised as a recognised sole practice. If this is something you wish to consider, you should arrange to speak with one of our specialist solicitors to discuss the various issues you would need to think about.


If you are facing the prospect of being unable to obtain PII, as with any regulatory issue, it is imperative to take advice early and make a plan. The old adage of fail to prepare, prepare to fail applies in these circumstances as much as any other. Our specialist team of solicitors are on hand to talk you through your options and we have a wealth of experience of helping solicitors through difficult times.


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