2018/19 contributions to the Compensation Fund
We have set the level of contributions to the Compensation Fund for 2018/19. Contributions for solicitors will increase by £50 – from £40 to £90. Firm contributions will increase by £902, from £778 to £1,680.
The level of contributions is set by our Board taking into account historical and existing claims, and analysis of future claims. In the light of key risks to the profession, including solicitor involvement in dubious investments schemes, it has decided to increase the levy for the second year running.
The Compensation Fund is a key part of the regulatory framework, supporting public confidence. It can pay grants to those that have suffered financial hardship because of a solicitor’s dishonesty or failure to account for client money. While not every case will result in successful claims and we do not want to impose unnecessary cost on the profession, it is important that sufficient funding is available.
SRA Chief Executive, Paul Philip, said:
“The extra layer of protection the Compensation Fund provides helps maintain trust and confidence in regulated law firms. We are responsible for making sure there are enough funds to cover potential future claims and the rise in contributions reflects the forecasts of increased pressure on the Fund.”
Compensation Fund contributions are collected in October as part of the annual renewals process.As part of the Law Society Group, we have confirmed in the joint consultation for 2018/19 that our net funding requirement remains unchanged from 2017/2018 – at £52.6m. This is around three per cent lower than in 2015/16.
The Law Society Group’s consultation on its net funding requirement is available here:
Investment schemes are a priority risk for the us, as outlined in the Risk Outlook:
We have therefore published numerous warnings about the threat of investment schemes and connected issues over the last decade.
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