Fee policy 2018/2019

15 June 2018

What are mandatory practising fees?

Our powers to charge fees are mainly contained in the Solicitors Act 1974 and the Administration of Justice Act 1975, as amended by the Legal Services Act 2007. Our powers to set fees for alternative business structures (ABS) are contained in the Legal Services Act 2007.

The majority of our funding comes from annual fees set each year.

We can charge annual fees to individuals (eg practising certificate fee) as well as to firms (recognised bodies and licensed bodies). These are mandatory and must be paid in order for individuals and firms to practise.

The same statutes also require us to provide a Compensation Fund and to seek contributions from individuals and firms to meet the cost of claims and running the Fund.

What do the fees pay for?

The income from mandatory practising fees can only be used for certain purposes.

These are

  • regulatory activities (the total costs of the SRA)
  • non-regulatory activities provided by the Law Society which are Permitted Purposes under the Legal Services Act (eg Law reform activities)
  • levies required to be paid under the Legal Services Act
  • part of the cost of the Legal Services Board (LSB)
  • part of the costs of the Legal Ombudsman
  • full cost of the Solicitors Disciplinary Tribunal (SDT)

All of these costs make up the total funding requirement which needs to be met by regulated individuals and firms, including ABS.

How we spent your fees in 2017/18

Area Percentage
Staff costs 41%
Disciplinary legal fees 10%
Interventions 11%
Other costs, such as office expenses and research programmes 13%
Services we share with the Law Society, for example HR and Finance 15%
Projects, such as Modernising IT 11%

Due to rounding, the figures do not add up to 100%

What are the principles the SRA uses to determine fees?

The SRA adopted a set of eight principles for setting fees in any year in 2010, they are to:

  • be fairer to fee payers
  • be efficient and economical to administer
  • ensure a predictable income to meet the cost of regulation
  • be stable - charges should not vary considerably year on year
  • be as simple as possible - to enable the regulated profession to predict their likely fees
  • be based on data that can be verified
  • ensure that, where possible, the costs of processes that are not of general application should be borne by those making such application, as far as possible, on a cost recovery basis
  • take some account of ability to pay, in particular in relation to small and new businesses, charitable and not-for-profit organisations, and not be a deterrent for new entrants

The current split for determining fees is

  • a 60/40 Firm/Individual split of practising fees
  • a 50/50 Firm/Individual split of compensation fund contributions
  • maintaining the maternity leave discount on practising certificates

Pro-rata fees and maternity discounts

Practising period start Full fee Maternity leave start Discounted fee
November 1 2018 – December 31 2018 £278.00 November 1 2018 – December 31 2018 £163.00
January 1 2019 - March 31 2019 £221.00 January 1 2019 - March 31 2019 £134.00
April 1 2019 - June 30 2019 £163.00 April 1 2019 - June 30 2019 £106.00
July 1 2019 - October 31 2019 £106.00 July 1 2019 - October 31 2019 £77.00

What happens now?

The figures on this page represent the proposed budget for 2018/19. It has not yet been approved.

The approval process is:

  • The Law Society Council will approve the budget itself on Wednesday 5 July
  • Our Board will approve the way the budget is collected on Wednesday 18 July
  • The proposals will be submitted to the Legal Services Board, which will aim to make a decision in mid August
  • Renewals for 2018/19 will then start on 1 October

Feedback

If you have any comments to make to the SRA on the fee-setting process, please contact us.