Funding increase raises alarm for solicitors

The Law Society of England and Wales has expressed deep concerns regarding the Solicitors Regulation Authority's (SRA) proposed funding increase outlined in its 2026-2027 business plan. This consultation proposes an unprecedented rise in funding intended to facilitate a one-year “reset,” which the Legal Services Board (LSB) must evaluate for approval.

Law Society president Mark Evans warned, “The LSB must not forget that the SRA’s proposed practising certificate (PC) fee increase is largely to fund remedial action to fix problems of the SRA’s own making. It is solicitors, already dealing with higher costs and heavy regulatory burdens, who are having to pay the price.” His statements reflect the broader anxiety within the legal profession about the financial implications of the proposed changes.

The SRA aims to secure a 29% increase in its total funding requirement, raising the SRA's share of the individual practising certificate fee from £190 to £240. This increase also includes heightened compensation fund contributions following recent firm failures, such as the Axiom scandal, which the SRA reportedly failed to address in a timely manner. “We have to voice strong and widespread concerns from the profession about the increase in both the PC fee and the compensation fund levy,” added Evans.

He further noted, “The SRA’s need for increased funding is a bitter pill driven by past institutional weakness. In this context the LSB and SRA must bear in mind the impact on firms and individual solicitors.” The cumulative financial pressures, particularly on smaller firms and those in lower-margin sectors like legal aid, pose significant risks to market sustainability, consumers accessing legal services, and overall access to justice.

In light of these challenges, Evans suggested that the SRA should explore potential targeted fee reductions for legal aid firms. “In these circumstances, the SRA should look into the possibility of targeted fee reductions for legal aid firms, to support access to justice,” he explained.

He also welcomed the SRA’s decision to abandon its plans to take over the regulation of CILEX professionals, calling it “a wasteful distraction from the regulator’s core responsibilities, which we had opposed from the start.” He urged the SRA to focus its resources on high-risk issues to ensure public safety, stating, “The SRA must prioritise high-risk issues more rigorously, ensuring resources are focused on matters posing the greatest risk to the public, rather than lower-impact or easier cases.”

Evans highlighted ongoing concerns surrounding the SRA’s inconsistent decision-making and the variable capabilities of its investigators, emphasising, “Persistent concerns among solicitors about inconsistent decision-making, delays and variable investigator capability, have undermined confidence in the regulator, and need to be addressed.”

To foster improvements, he insisted that plans to enhance operational capacity must be complemented by a cultural shift within the SRA. “The SRA’s plans to improve operational capacity and capability must be accompanied by culture change. This should include a shift away from overly process-driven and enforcement-led approaches and a greater emphasis on supporting compliance,” he noted.

As the representative body for solicitors, the Law Society pledges to hold the SRA accountable for its actions. “Our guarded acceptance of the need for more investment in its core regulatory functions is not a green light for year-on-year increases,” Evans concluded, reinforcing the importance of accountability and sustainable change within the regulatory framework.