Practising fee hits 700

INCREASES: compensation fund contributions up 150% and trainees' salaries to rise by 1,000

The practising certificate fee will rise 50 to 700 this year, with compensation fund contributions rising 150%, the Law Society's ruling council decided last week.

The council also unanimously approved a 1,000 rise in the minimum salary for trainee solicitors.

The PC fee - which rose from 495 last year to the present 650 - is to rise to meet the objectives set out in the Society's corporate plan, which the council approved in December.

The Society's budget for 2003 will top 83 million.

In addition, the Society is facing a larger tax bill than anticipated.

It stems from this year's National Insurance hike, which will cost up to 300,000, and an additional 1.1 million of irrecoverable VAT.

This arises from a change in how Customs & Excise calculates the proportion of input VAT the Society can recover on its non-business activities (all regulatory activity is classed as non-business).

Contributions to the Solicitors Compensation Fund - which pays out in cases of fraud - are set to rise from 200 to 500 for all solicitors seven or more years qualified.

Solicitors between four and six years qualified will pay 250 (100 last year), with those three or fewer years qualified remaining exempt.

Retiring Law Society treasurer Ken Byass said the rises were vital to cover outstanding gross claims of 31 million.

As at April 2002, the fund's assets stood at 27.5 million.

He warned that failure to approve the rise would mean, like the directors of troubled insurer Equitable Life, that the Society was entering into a commitment it did not have the money to cover.

Despite concerns about the effect of the rise on legal aid firms, the council voted down an amendment laid by Phillip Hamer to set the levels at half those proposed.

He noted that historically only around 50% of the gross value of claims is actually paid out, and said it would be better to make an additional call for cash on the profession if the fund was running low.

Other council members recalled how unpopular such a move had been previously.

The minimum salary is to change for the first time in two years, and will be 14,600 for central London and 13,000 elsewhere for new trainees.

The recommended minimum will also rise 1,000 to 15,600 and 14,000 respectively.

The minimum level below which waivers will not be granted rose similarly to 10,000.

Standards board chairman Ed Nally said the levels of debt incurred by many law students and the salaries needed to service those debts continued to be a concern.

Failing to increase the minimum salary would send the wrong message to such students, he said.

He also accepted a proposal from Margaret Bailey, the Trainee Solicitors Group's council member, to review the levels annually.

l Geoffrey Sandercock, a high street solicitor based in Pontypool, Gwent, won a three-way election to take over as Law Society treasurer.

Neil Rose