Compensation Fund contributions set to fall

The Solicitors Regulation Authority (SRA) has announced that  the Compensation Fund contributions they set for the next practising year are going to fall.

They state that, subject to final SRA Board and Legal Services Board approval, the individual contribution for 2019/20 will be £60 (reduced from £90) whilst the firm contribution will fall by £530 to £1,150.

Among reasons for the drop in contributions is a decline in the number, and complexity, of interventions. However, the overall contribution remains higher than recent years because of the continuing risk of a greater number of high value claims, particularly due to solicitors’ involvement in dubious investments schemes.

The Board of the SRA set the contribution levels by taking account of historical and existing claim numbers, and then analysing potential future claims. The SRA have said that they do not want to impose unnecessary costs on those they regulate.

Paul Philip, SRA Chief Executive, said:

“The Compensation Fund provides an essential safety net for those who need it, helping to maintain trust in the profession.

“We have to make sure there are enough funds to cover potential claims, both on current applications and those we expect to receive. The two year on year rises in contribution reflected forecasts of potentially significant increases in claim values on the Fund, especially from involvement in investment schemes.

“With fewer than expected interventions over the last year or so, I am pleased that we have now been able to bring contributions down.”

Compensation Fund contributions are collected in October as part of the annual renewals process.

Further information can be found in the Law Society’s Practising certificate fees consultation 2019-20.

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