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LSB backs down on payments from profession

15 September 2009

The Legal Services Board has abandoned a plan which would have enabled it to recoup 70 per cent of its set-up costs in its first year from the legal profession.

The latest estimate of the cost of establishing the LSB and Office for Legal Complaints is £19.9m. At least 80 per cent of the bill is likely to be paid by solicitors.

Chris Kenny, chief executive of the LSB, said that following a consultation the board had decided that the levy could be paid by the professional bodies in three equal instalments.

He said the paper had originally proposed a payment of 70 per cent in the first year, 20 per cent in the second and 10 per cent in the third.

The Law Society said in its response to the consultation paper that it had based its financial plans on an equal split between the years. The society is raising the new PC fee from £995 to £1,180 next month, partly because of the need to fund the LSB levy.

Kenny said that those professional bodies wanting to pay a greater amount, or the whole of their share of the set-up costs, in one instalment, would be free to do so.

“A major driver of this decision has been to give approved regulators as much flexibility as possible in their payment terms, for maximum sensitivity to their operations,” Kenny said.

“To achieve this, we have revised our initial recommendations in response to calls made through the consultation responses.”

The running costs of the LSB, from January 2009 to March 2010, have been estimated at £1.14m.

The levy for the set-up and running costs of the LSB will be based on the number of regulated professionals in each branch of the profession.

The levy for the establishment costs of the OLC will be based on the number of service-related complaints received over a three-year period ending on 31 December 2008.

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