Complaints trigger 15% rise in PC fees

By Neil Rose

The practising certificate fee is to rise by 65 this year and not 25 as predicted three months ago, the Law Society's ruling Council voted last week.The 15% increase to 495 for 2000/2001 is attributed in the main to a reassessment of funding for the Office for the Supervision of Solicitors (OSS), which will now receive 12.5 million in the 2001 budget.

This is 4 million more than predicted in a guideline budget produced in April, although it does not take into account income from the investment business certificate.

This, however, will dry up in the next year when the Financial Services Authority takes over investment business monitoring.Under April's guideline budget, the fee was to rise to 455, which Law Society treasurer Ken Byass said at the time was necessary to deal with two major items of unforeseen expenditure in the last year: 10 million spent on the OSS change programme and 1 million spent on the legal aid campaign.In April, Mr Byass said the estimated budget for 2001 was calculated on the basis of a 'scaling down of emergency operations'.

However, he said this week that although the emergency was provided for, there is an 'increase in ongoing expenditure year on year which wasn't apparent in April'.Mr Byass told the Council meeting: 'The level of activity at the OSS has got to be greater than in the past to fulfil its obligations.

In the years when the fee was 430, the OSS was underfunded.'The 430 level had been maintained for the last two years, having dropped steadily from a 495 high in 1994/95.The Society's budget for 2001 is 66.7 million, 9 million more than in 1999 and 7.4 million more than in the April guideline budget.Meanwhile, the Council also voted to double contributions to the Solicitors Compensation Fund - which compensates victims of dishonest or fraudulent solicitors - to 200 for practitioners seven or more years qualified.

It will be 125 for those four, five and six years qualified solicitors.

Solicitors three years qualified or less are exempt.The hike is in the face of a possible jump in payouts, and one case in particular which has a potential 19 million liability.

This is despite a good year for the fund, which saw grants at their lowest level for 11 years (7.5 million).

The fund now stands at 50 million.Kevin Martin, chairman of the Society's compliance and supervision committee, said contributions have previously been set at minimum levels and the increase was necessary to avoid the possibility of a shortfall arising, as happened with the Solicitors Indemnity Fund.An original proposal to raise the headline figure to 250 was dropped on the advice of the Society's audit committee, while an effort to retain the 100 figure was soundly defeated.

The vote was 80% in favour of 200 and 20% for 100.See Comment