The Legal Services Board has approved a significant increase in the Compensation Fund contributions solicitors must pay
Today, the Legal Services Board (LSB) announced a rise in the contributions solicitors make to the Compensation Fund, driven by the need for financial stability following recent high-profile collapses, including Axiom Ince. The Solicitors Regulation Authority (SRA) initiated this increase to ensure the fund remains adequately managed.
Ian Jeffery, the chief executive officer of the Law Society of England and Wales, expressed serious concerns regarding the SRA’s request for additional funds. He stated, “The SRA’s request for additional funds is largely the result of the collapse of Axiom Ince and the cost of compensating its victims.” Jeffery emphasized the importance of the independent review of the SRA’s performance, which the LSB commissioned, urging its publication to facilitate learning from the incident.
The approved changes reflect a substantial increase in contributions, with individual solicitors facing a 200% hike and firms experiencing an increase of 236%. Jeffery described this as “deeply concerning” and indicated that the Law Society had previously requested the SRA to reconsider the allocation of the levy to ensure a fair distribution of costs among practitioners. The Society also called for proactive measures to prevent similar substantial claims in the future.
While solicitors broadly support the Compensation Fund as a critical protection for clients, the Law Society underscored the need for improved transparency and accountability regarding the contributions to the fund. “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,” Jeffery noted.
The Law Society has reiterated its commitment to working with the SRA and LSB to address these issues, advocating for more balanced approaches to fund management and regulatory activities that align with consumer needs.
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