2011 - Guarantee Fund

2011 Research

The Scottish Solicitors' Guarantee Fund (the Guarantee Fund) aims to protect people who have suffered financial loss because of the dishonesty of a solicitor or a member of their staff.  If someone believes they have lost money in this way, they can make a claim against the Guarantee Fund.   It is often referred to as the fund of last resort, because compensation is only given to those who have no other way to get their money back.

The Guarantee Fund is managed and run by the Law Society of Scotland (LSS). The LSS decides whether an investigation into the claim should be carried out or not and whether to make a payment.

As part of its oversight of the effectiveness of the Scottish Solicitor's Guarantee Fund the SLCC commissioned two pieces of research, each looking at different aspects of the Guarantee Fund.

The first piece of research conducted by Progressive, a research company, involved issuing questionnaires to people who sent claims to the Guarantee Fund.  We were aiming to understand what people's actual experiences and perceptions were about making a claim.

The overall findings were:

  • more people were satisfied with the Guarantee Fund process than were not
  • for those that were dissatisfied, comments largely fell into two key areas:
    • the length of time the process took to complete and
    • the lack of, or inaccurate, information
  • more people than not felt that the process was easy to understand, fair and objective, and easy to complete
  • the majority of people who responded believed the Guarantee Fund is designed to protect the public, that the decision making process is fair and objective, and that the outcomes reached through it are usually fair
  • the main criticisms related to perceptions that information was misleading information, that processes were complex and took too long and that there was bias within the process
  • suggested improvements included making communication simpler and more frequent

The second piece of research by The University of Manchester was a statistical analysis of data from claims.  The research analysed the statistical data to establish if there were any relationships between different aspects of claims made.  What the research did not do was explore or look into the detail of individual claims or seek to establish if there were underlying reasons for any findings.

The statistical analysis identified a relationship between the number and total value of claims received in the same year as an individual claim and the level of payment made on an individual claim.  The University's conclusion was that the outcomes of individual claims on the Guarantee Fund are statistically related to factors beyond the 'merits of the individual claim'.  The SLCC notes this conclusion but has not drawn any conclusions about underlying reasons, as they could be subject to many different factors, not all of which would be within the control of the LSS.

The SLCC would like to thank both of its researchers, and to the Law Society of Scotland for providing access to information and data, and for its willingness to do more work in this area.

Future work

The SLCC is keen to take this work forward.  Following on from the two pieces of research we:

  • are using the results from the Progressive research as a baseline for ongoing monitoring.  The questionnaire used in the research will be issued by the LSS to all claimants at the end of the claims process.  These questionnaires will be returned to and monitored by the SLCC.  We will share information with the LSS and publish findings periodically
  • will carry out an audit of a sample of the actual claims from which the University of Manchester took the statistical data.  During the first half of 2012 we will examine the actual cases, the processes followed and the records of decisions to explore whether there are identifiable reasons for the statistical relationship.

If you are interested in reading the full text of the research it is available here:

PDF Progressive Guarantee Fund Report 2011 (227 KB)

PDF University of Manchester Guarantee Fund Report 2011 (181 KB)