How the compensation fund works

5 July 2021

The compensation fund is made up of annual payments by everyone we regulate. Payments from the Fund can be made where:

• money has been stolen or not been accounted for by someone we regulate
• a regulated person did not have insurance in place.

Our powers to operate the SRA Compensation Fund are set out in legislation and our Rules.

We publish an annual report and financial statements on the compensation fund.

General

The compensation fund is a discretionary fund. That means that no-one is entitled to a payment.

On all applications:

• We expect applicants to be open and honest with us, and to provide us with all relevant evidence in support of their application.
• We will collate evidence to help us decide an application. We may have access to information that an applicant does not, for instance, the accounting records of a firm or information from our investigation. If so, we may also use this evidence in reaching a decision.
• We can refuse to make a payment even if our rules for making a payment are satisfied.

Things you should know

• To make an application to us you must satisfy our eligibility criteria
• You must have suffered a financial loss resulting directly from:
  • The dishonesty of someone we regulate
  • A failure to account for money by someone we regulate
  • The civil liability of someone we regulate which should have been covered by insurance, but the insurance was not in place
• You must make your application within 12 months of when you first knew, or reasonably should have known, of your loss. We may extend the time-limit if there are reasons to justify this.
• The maximum we can pay for a single claim is £2 million. We may be able to pay a higher sum if there are exceptional circumstances in the public interest.
• Where we receive multiple applications relating to the same or connected circumstances, we may cap the total amount we will pay.
• Some losses are not covered by the Fund and cannot be paid – read more on who can claim.
• Where your loss was caused by more than one party, we will consider the role of each party in causing your loss, before deciding whether to make or reduce a payment.
• We will consider whether you have contributed to your own loss. If so, we may reduce or reject an application.
• We must give notice of your application to the solicitor(s) and give them a chance to comment on it.

Find out more about how we can help applicants and the application process, as well understanding what you might be entitled to.