CLC lays out plans for changes to charges and practice fees
By Law News
The CLC proposes increasing practice fees and adjusting the Legal Ombudsman levy to ensure fair cost distribution
The Council for Licensed Conveyancers (CLC) has initiated a consultation on proposed changes to how its contribution towards the Legal Ombudsman is paid. Currently, firms that generate complaints pay 30% of the cost, but the CLC plans to increase this to 50%. Additionally, the CLC is consulting on a 9% increase in the fee practices pay for regulation.
The annual consultation, which records the CLC's finances and operating budgets, highlights that practice fees fell by 60% between 2017 and 2022 due to excess reserves and a deficit budget. However, reserve levels have now stabilised, necessitating that full operating expenditures be charged to regulated firms.
Rising costs and falling practice turnovers, exacerbated by the pandemic and economic downturn, have impacted the CLC's income. Aggregate practice turnovers decreased by 4% in 2023 and 1% in 2024. Despite lower income, the CLC's responsibilities have expanded, including enhanced anti-money laundering supervision and compliance with stricter regulatory requirements from the Legal Services Board.
To cover the cost of delivering consumer protection, the CLC proposes a 9% fee increase for 2024, equivalent to 6p per £1,000 of turnover. This will bring the CLC’s budget to £2.78 million, allowing for investments in resources such as staff for policy development, complaint handling, and enhanced monitoring and licensing capabilities.
The current OLC levy structure, where 70% of the cost is shared by all firms and 30% by those generating complaints, will be adjusted to a 50/50 split. This aims to incentivise firms with high complaint levels to reduce them. As a result, 63 of the 85 practices with cases at the Legal Ombudsman will see a decrease in costs, while 22 practices will pay more. Firms with no cases will benefit from lower charges.
No changes are proposed for other fees, with individual license fees remaining at their 2010 levels and compensation fund contributions unchanged since 2020.
CLC Chief Executive Sheila Kumar emphasises the need to balance maintaining regulatory standards with supporting the profession. The consultation period is open for eight weeks, concluding on 6 September.