The Legal Services Board (LSB) has approved a rise in the contributions solicitors make to the Compensation Fund, despite serious concerns from the Law Society of England and Wales.
The Solicitors Regulation Authority (SRA) has sought to increase contributions to the Compensation Fund levy, to continue to manage the fund on a sound financial basis. Law Society chief executive officer Ian Jeffery said:
“The SRA’s request for additional funds is largely the result of the collapse of Axiom Ince and the cost of compensating its victims.
We expect the independent review of the SRA’s performance on this matter commissioned by the LSB to be published as soon as possible, so that the lessons can be learned.
We also strongly encourage the SRA to prioritise its focus on core activities and only undertake additional workstreams based on evidence of regulatory need, or specific gaps in responding to consumer needs, rather than looking for additional fining powers. A substantial increase – 200% for individuals and 236% for firms – is deeply concerning.”
He said that in their consultation response, the Law Society asked the SRA to reconsider how the levy was apportioned, to ensure the burden was distributed fairly, and to take proactive measures to prevent future substantial claims. He added:
“Solicitors are steadfast in their wide support for the Compensation Fund, as a vital protection for clients, and it clearly delineates the profession from unregulated providers of legal services.
The Law Society endorses the LSB’s call for enhanced transparency and accountability to the regulated community paying contributions to the Compensation Fund, necessary improvements that we also requested.”
