Law Society: Application to Legal Services Board for budget approval
The cost of practising as a solicitor is set to increase by 11% in the next year, although the financial impact will be felt by firms rather than individuals.
The Law Society is to seek approval from the Legal Services Board to collect £148.4m from the profession for the year from 1 November, £16.6m more than in the current year.
Of this, £86.5m will go to the Solicitors Regulation Authority (SRA), a year-on-year rise of £16.3m, £37.6m to the Law Society, up £800,000, and £24.3m to pay the levies that contribute to the cost of the Legal Services Board, Legal Ombudsman and Office of Professional Body Anti-Money Laundering Supervisors. This last figure is actually down £500,000 on the current year.
Individuals pay 40% of the total through the practising certificate (PC) fee, £59.4m in 2025/26. The extra money for the SRA equates to £26 more on the fee, taking into account the ever-increasing number of solicitors – the regulator expects there to be 184,000 in November.
However, the Law Society has actually reduced its share of the fee by £3 – probably due to using reserves – and the reduction in levies knocks off another £4, taking the PC fee to £326 for the coming year. It is currently £307.
But when the proposed £20 reduction, to £70, in the individual contribution to the SRA Compensation Fund is taken into account, the overall individual cost of practising will fall by £1.
Law firms will pay 60%, or £89m, of the money, 12% more than last year. The impact on individual firms will vary depending on how their turnover has moved over the two years; if it is unchanged, the increase will be no more than 8.8%.
The compensation fund contribution for firms will fall from £2,220 to £1,950.
In the SRA’s consultation over its 2025/26 business plan and budget, it explained that a “significant and sustained increase” in the number of reports about solicitor misconduct was partly responsible for the higher budget requirement.
Speaking yesterday to the media following the recent SRA board meeting, chief executive Paul Philip also highlighted how the regulator has had to move resources into its mushrooming work on firms conducting bulk litigation.
The SRA revealed that it now has more than 80 live investigations across 74 firms with potentially 200,000 plus claims between them, most commonly relating to financial products, housing disrepair and cavity wall insulation.
“It’s a huge issue and we have very serious concerns about firms involved in high-volume cases or bulk litigation,” said Mr Philip.
“It’s a space-occupying issue for us because obviously it becomes a priority but we’ve also got to get the rest of the work done.”
Mr Philip also revealed that SRA chair Anna Bradley attended “a roundtable briefing with the Ministry of Justice and other key stakeholders to discuss the issue of bulk claims with a view to identifying potential measures that could be taken to protect consumers against harmful practices in this area”.
In June, the Civil Justice Council review of litigation funding called on the government to investigate urgently the type of litigation funding used by collapsed bulk claims firms like SSB Law and Pure Legal.
This should consider “whether issues concerning portfolio funding require regulatory reform of the legal profession”, it said.
The SRA only received seven formal responses to the business plan consultation and reported that there was broadly “little concern or opposition about our proposed increase in budget for 2025-26”.
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