The Solicitors Regulation Authority has spent £5m less than expected on interventions this year, the regulator revealed today.
The SRA’s annual review for 2013/14 showed expenditure on interventions was £5.2m lower than provisioned.
The number of interventions is actually up on 2013 – from 48 to 51 – but the absence of any larger firms needing regulatory action meant spending was kept in check. In comparison, the failure of firms such as Atteys and Blakemores last year forced the SRA to commit £2.2m to interventions in the first quarter of 2013 – almost £1m more than it spent on interventions for the whole of 2012.
Changes to intervention funding last year mean the savings for 2014 will be passed onto the compensation fund and in turn the profession.
The review added: ‘Because our expenditure on intervention-related agent and archiving costs has been lower than anticipated, the amount recovered to our budget from the compensation fund is similarly lower. This is a direct result of the lower than estimated number of interventions.’
Meanwhile, the SRA has said it will decide next year on future plans for indemnity run-off cover provided by the Solicitors Indemnity Fund.
The regulator has previously said run-off cover should be cut to three years and the current limit of six is considered too onerous.
The Law Society has stated its favoured option is to extend the cover.
The SRA has asked for evidence on the issue this year, and the responses to that will go to a wider consultation on PII and compensation issues due for next spring.