A leading commercial law firm has warned IFAs that Professional Indemnity Insurers will seek a greater role in internal compliance procedures.
Law firm Reynolds Porter Chamberlain is predicting that the new regulations governing civil court actions, which come into effect next month, will encourage PI insurers to demand a greater involvement in IFAs complaints handling.
The Civil Procedure Reforms aim to cut legal costs for the public and the Government, by encouraging early settlements and ensuring all case information is exchanged quickly.
If the case does end up in court, penalties and fines may be ordered against the firm, which will ultimately be paid by the IFA's PI insurer.
Reynolds Porter Chamberlain says that a detailed initial response is essential to case. PI insurers will want to be involved from this point as they are likely to pick up the bill.