SRA Board agrees new fees policy and draft fee determinations (subject to further approvals)

The SRA Board has reviewed and agreed in principle the policy and draft fee determinations for the new approach to practising fees, which come into force for this year's renewal cycle. (These decisions are subject to final decisions by the SRA Board and the Law Society Council in July, and approvals by the Legal Services Board.)

The new fees structure includes a much reduced individual practising certificate fee, which is likely to be in the region of £460 (compared to £1,180 for 2009/2010), plus a firm fee calculated on a firm's banded turnover.

The new structure also covers Compensation Fund contributions, the costs of which will be allocated in a different way, based on an individual fee which all regulated individuals will pay (likely to be around £10), plus a flat-rate fee for all firms that hold client money (likely to be £120). The figures will not be finalised until July 2010 when decisions are made by the SRA and Law Society, and approval is sought from the Legal Services Board (LSB).

The new fees structure follows extensive consultation with the profession over the last 12 months, including three consultation papers and a series of workshops.

SRA Chief Executive Antony Townsend said: "This is about greater fairness in meeting the costs of regulation going forward.

"The way the fees are allocated across the profession will change, with firm fees raising 60 per cent of the total costs, and individual fees raising 40 per cent of the total costs. The individual fee will be less than half what it is at present. With 60–80 per cent of the regulatory activity focused on private practice firms, this will allocate the costs across the profession more fairly.

"The fees structure has also been simplified and will be more transparent in terms of what is charged and what it is paying for. We have provided extensive information to solicitors in letters, and via the website, to help them plan for the changes."

The practising fees cover the costs of the SRA, Law Society activities which are permitted purposes under the Legal Services Act (for example law reform activities) as well as levies such as part of the set-up and running costs of the Legal Services Board (LSB), the new Legal Ombudsman Service, and the continuing costs of the Solicitors Disciplinary Tribunal and the Legal Complaints Service.

Next steps are:

  • Law Society Council to decide the total funding requirement.
  • SRA Board to make the final fee determinations in July (subject to LSB approval), once the total funding requirement is agreed by the Council.
  • LSB approvals to be sought for changes to regulatory arrangements and regulations as a result of the new fees policy, and for the actual practising fees.

Notes to editors

The new fee structure (subject to approvals) will be made up of four components:

  • Individual practising fee – flat fee payable by every solicitor seeking a practising certificate and every recognised European lawyer and recognised foreign lawyer seeking to register;
  • Firm-based practising fee – fee payable by every firm (recognised sole practitioner or recognised body), based on the firm's turnover;
  • Individual Compensation Fund contribution – flat fee payable by each individual irrespective of whether they hold client money (exception for Crown Prosecution Service which has statutory exemption);
  • Firm Compensation Fund contribution – flat fee payable by firms which hold client money.

Letters were sent to all firms earlier this month indicating what their indicative regulatory fees and Compensation Fund contributions for 2010/2011 could be. As specified in the letter, these figures were likely to change as the funding requirement had not yet been determined and the turnover information from the profession was incomplete.

Read more information, including questions and answers and an online calculator.

Print page to PDF