SRA launches consultation on fee moderation for law firms
The SRA has launched a consultation on how the costs of regulation should be paid for by the profession. Its main reason for this is the fact that it believes that the current method, through the practising certificate fee, leads to anomalies and unfairness.
Following the feedback from previous consultations, the SRA board concluded that
- cost should be allocated so that 40% of the total funding of regulation is raised through the individual fees, and 60% through the firm fees, and
- firms' regulatory payments should be based on their turnover (defined in England and Wales as gross fees), assessed in different bandings.
Most firms should be able to plan for fluctuations in their fixed costs, given sufficient warning. However, some firms will face a considerable overall increase in the first year of change. This will be fair in so far as it reflects the level of activity but if their more recent turnover is significantly lower, then a fee based on historic turnover may give rise to financial difficulty.
For that reason, the SRA Board believes that it should consider providing a transitional fee moderation process for certain firms to facilitate the move to the new funding arrangement.
The purpose of this paper is
- to consult on a proposed transitional fee moderation process, and
- to identify eligibility criteria which are both fair to firms who may need to seek moderation and to all other firms who will, as a result, have to bear a slightly bigger share of the cost.
Take part in the consultation, or find out more.