Society uses reserves to deal with excess IT costs
The Law Society’s ruling council today approved a PC fee increase of £16 for the current year, from £328 to £344. The fee fell by 23 per cent last year, from £428 to £328.
However, the council also approved the SRA’s recommendation to increase individual Compensation Fund contributions from £60 to £92 and firm contributions from £722 to £1,340.
Des Hudson, chief executive of the society, said the funding needed to meet the group’s budget for 2013 would have been just over £100m, but during the current year, the society had accessed £10m from reserves, mainly to meet “overrun costs” on IT projects.
“In order to gradually rebuild those reserves, the proposed 2013 net funding requirement has been set at £103.5m,” Hudson said.
“The alternative, to replenish those reserves in one go with a large increase in the PC fee, would have placed an unnecessary burden on the profession.”
Antony Townsend, chief executive of the SRA, said he recognised the imperative to keep regulatory costs to the minimum and the SRA’s net funding requirement for 2013 had reduced.
Townsend said the increase in Compensation Fund fees followed a period of historically low fees, and was necessary to ensure that there were sufficient funds to cover predicted claims, and to “minimise the likelihood of us having to seek further funding” during the year.
Both proposals will be submitted to the Legal Services Board for formal approval.