The Solicitors Regulation Authority (SRA) has today published a consultation on its business plan and budget for next year, which includes a proposed rise in contributions to the Compensation Fund, in a move the Law Society has said will provide ‘crucial protection’.
The SRA are consulting on practising certificate fees for 2024/25, proposing it is held at the same level as this year – at £162 per person. The regulating body has set out that contributions to the SRA Compensation Fund from both firms and individuals will need to rise for the first time in five years.
Law Society of England and Wales chief executive officer Ian Jeffery said: “The Compensation Fund provides crucial protection and reassurance to consumers in contrast to the lack of protections offered by unregulated providers.
“Professions can only succeed if they uphold core values, such as integrity, reliability and accountability. On the rare occasions when our professional colleagues fail to uphold these values, our collective responsibility means that public faith is maintained.
“It is unfortunate that there have been such significant failings that we now face substantial increases in the individual and firm contributions to the Compensation Fund. It underlines the need for greater vigilance and probity on the part of our members and a focus on effectiveness by regulators.
“Ultimately, we accept that the role of solicitors is to protect the interests of their clients, and that we must do that, even when the costs are high, because the costs of not doing so would inevitably be higher.”
Individual compensation fund contributions for next year will be £90 and £2,220 for firms. The SRA says this ‘will allow fund reserves, significantly impacted by a substantial increase in the number of interventions and volume of claims over the past 18 months, to be rebuilt over the next two to three years’.
The SRA claim that they have taken steps to ‘smooth impacts over several years and keep the rise in contributions to the minimum required to ensure the fund can meet current and future needs’. This has included budgetary controls of costs, modelling of potential scenarios, and the negotiation of a banking facility in the event of future interventions – according to sra.org.
Paul Philip, Chief Executive of the SRA, said:
‘The SRA Compensation Fund plays a critical role in protecting the public and maintaining trust in the profession. We have a duty to ensure the fund is maintained and remains viable. This proposed rise has been driven by an unprecedented level and cost of claims and interventions in the last year. We have done all we can to make sure the contributions don’t rise any more than they absolutely have to.’
