The Legal Services Board today confirmed its acceptance of higher practising certificate fees for 2013, as agreed by the Law Society’s Council in early July. The practising certificate (PC) fee for 2013 will increase by 5%, from £328 to £344, following a reduction of 23% from 2011 to 2012.
The 2013 compensation fund levy, to cover uninsured losses faced by clients, will increase by £32 (per individual) and £568 (per firm), to £92 and £1,340 respectively.
Des Hudson, Law Society chief executive, said the 2013 levy remains low by recent historical standards. Contribution rates in the two preceding years were set substantially lower than recent averages, partly in preparation for the introduction of alternative business structures, the Society said.
Hudson added: 'The agreed 2013 PC fee and compensation fund levy package represents an increase over this year, but remains less for most firms than the equivalent charge three years ago. We are acutely aware of the challenging conditions many firms face and minimising increases to the PC fee has been a major target for the Society.’
On the compensation fund Hudson said: 'Our strategy for the last few years has been to keep the compensation fund levy as low for members as is practically possible, by maintaining a reserve fund just large enough to cover expected annual payouts.
'This does risk significant year-to-year variation but we felt it better that funds sit in our members' bank accounts rather than the reserves of the compensation fund.
'When the present scheme was introduced, it was agreed that it should be open to review, in particular the element of the compensation fund levy paid by firms which is the same irrespective of scale. We concluded that the level payable this year by all firms is at the maximum that can be considered reasonable; we will work with the Solicitors Regulation Authority to review the compensation fund allocation formula before the 2014 levy is set, with a view to requiring smaller firms to pay less than larger firms.'