Solicitors look set to be charged a £300 contribution to the compensation fund this year - in a move that reflects the likelihood of a rise in claims against the fund.


The Solicitors Regulation Authority (SRA) has chosen not to drop the level of contribution required from solicitors in its proposals, despite there being £40 million more in the fund than the amount of outstanding claims at the end of last year.



The SRA considers that a substantial safety net may be needed to address the anticipated rise in claims.



The compensation fund's cash reserves stood at £54 million in December 2007, while the value of outstanding claims was only £14 million. However, the SRA noted that solicitors are entering a 'risky period'.



The regulator intends to give solicitors greater stability in terms of their annual contribution to the fund. While this year's £300 fee will be the same as last year, in previous years solicitors have faced a rise of up to 900% in the contribution level from one year to the next. Rob Adams, SRA director of client protection, said: 'The [financial protection] committee's view is that we can manage this better. Our strategy is not to cut back to the lowest point whenever we have a reserve.'



The SRA has also proposed to retain a lower fee of £100 for solicitors who do not hold client money. However, the committee agreed to take a longer-term look at whether some individuals such as in-house lawyers, who do not have the potential to hold client funds, should be required to make any contribution at all.



Rachel Rothwell