The Solicitors Regulation Authority today announced an unprecedented cash call on the profession, comprising hefty increases in practising certificate fees and compensation fund contributions. Solicitors will pay an extra £100 next year as a result.
In a business plan also unveiled today, the regulator announced that its budget for 2026/27 must rise by 29% to £111.5m to fund a complete overhaul of the organisation. To meet this demand, the SRA proposes to increase its call on the PC fee for individual solicitors from £190 to £240. That will cover 40% of the SRA’s requirements; the remaining 60% will be charged to firms and calculated based on turnover.
The highest sum previously levied for the compensation fund was £31.6m in 2024/25 – the year that thousands of claims were made by clients of the collapsed firm Axiom Ince. The total contribution fell to £26m last year, but will soar to £46.3m in 2026/27 after the unexpected closure of PM Law in February piled another heavy burden on the fund. As of April 2026, applications for compensation related to PM law reached an estimated £20m, with more expected.
The SRA says that its reserves have been drained by growing pressure on core activities, as well as adverse costs orders from the Solicitors Disciplinary Tribunal following failed prosecutions.
The scale of the operational challenges the regulator faces has increased sharply: between 2022 and 2025, the number of misconduct reports assessed rose by 45% to 16,499.
There has also been a costly rise in the number of interventions, with 35 in the first six months of 2025/26 alone compared with 42 in the whole of 2024/25. These also incur hefty storage costs for files seized from shut-down firms.
Chief executive Sarah Rapson said the SRA’s approach, capabilities and resources have not kept pace with the market it regulates, as business models have become more complex and technology has advanced. She added: ‘Moving forward, the SRA must focus on fewer priorities, move from a largely reactive to a proactive approach to regulation, and improve operational and technological capabilities to be better prepared for the scale and complexity of the challenges we face. It must focus more on the biggest risks impacting consumers and be more alert to issues on the horizon.’
A consultation on the business plan opens today, focusing on further developing and investing in IT infrastructure and developing new ways of working to improve casework, decision-making and internal processes.
The regulator wants to move away from reactively dealing with issues by moving towards early engagement and greater use of data and intelligence. With such significant rises in reports, a new approach will be tested to improve triage and effectively result in fewer cases being investigated.
Law Society of England and Wales president Mark Evans said the substantial proposed fee increase was 'deeply concerning'.
'We support the principle of the compensation fund which is a vital protection for consumers and clients. Several failures, including most recently PM Law, have placed considerable strain on the resources of the compensation fund and we recognise the need to rebuild the fund’s reserves.
'The new CEO of the SRA, Sarah Rapson, has inherited a problematic legacy and we welcome her openness and commitment to address those problems. We do not doubt that this will require money and resource.
'But we cannot forget that it is the hard-working front line of the profession that bears the cost of fixing an organisation, which had lost focus on its core role as demonstrated by its failures over the Axiom Ince and SSB collapses.
'Therefore, any increase in costs to the profession and certainly any increase approaching anything like the scale now being proposed must come with a credible and transparent plan from the SRA to deliver measurable and long-lasting improvements. Engagement with the profession is essential to reassure our members that the regulator is taking steps to actively avoid a repeat of past failings.'
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