The Solicitors Regulation Authority has decided against providing a general appeals process for firms that end up paying significantly higher practising certificate fees under the new PC fee regime from 2011, it emerged last week.

SRA board chair Charles Plant (pictured) told the Gazette that there would be no appeals process beyond the transitional arrangements for a ‘fee moderation system’ currently under consultation which, if implemented, will only apply to this year’s renewal.

The decision not to introduce an appeals process comes despite a recognition by the consultants advising the SRA on the new fee regime that the turnover-based system of charging to be introduced this October could unfairly penalise highly efficient legal aid firms.

During a board discussion on the issue in February, external consultant to the SRA Jamie Turner said an appeals system may be needed to ensure legal aid practices, which may have a high turnover but low actual profit, do not pay too high a fee.

Turner said he was considering drawing up plans for an appeal mechanism which would be available to all legal aid firms, and to other practices up to a certain level of turnover.

But Plant expressed concerns at the time that any appeals procedure could turn into ‘a monster’. The board chair confirmed last week that it will not be introduced.

However, the SRA is currently consulting on an option for a transitional ‘fee moderation process’, which would apply to the 2010 renewal only. The process would specifically address unfairness caused by the use of 2009 turnover figures to calculate the firm-based element of the 2010 PC fee.

To be eligible to have their PC fee reduced, firms would need to have a turnover below £500,000 in their most recent closed annual accounts. The total PC fee payable under the new system in 2010 would need to be at least 50% more than they paid in 2009 under the current system, and they must have experienced a turnover drop of at least 30% compared to the figure they submitted to the SRA in 2009.

From the 2010 renewal, 60% of the regulatory burden will be paid for through a firm-based fee, calculated on turnover, and 40% through a PC fee paid by individual solicitors.