SLCC plans standstill levies, but promises second look
Standstill levies on the legal profession to fund its operations in the year from 1 July 2021 have been proposed by the Scottish Legal Complaints Commission, in its annual budgeting consultation just published.
Last year the SLCC incurred much criticism for pushing through a 3.5% budget and levy increase as the COVID-19 pandemic began to take its toll on fee incomes, and also complaint numbers. This year's draft plan shows anticipated income and expenditure both slightly down, from £3.993m to £3.958m, but with the annual levy element of its income unchanged.
However the SLCC says the proposed levies will be reviewed again before a final levy is set.
"Potential variables this year are more significant than in previous years, and there are a number of factors which could influence a revised levy", its statement said. "One of those is likely complaint numbers, and we are seeking further information in this consultation on factors likely to impact transactions and consumer satisfaction."
Its budget consultation was also finalised before details of the Scottish budget and the public sector pay policy for 2021-22 were announced yesterday. "The proposed pay policy will lead to lower costs for the SLCC than the assumptions made in this budget. The SLCC will now analyse and assess the impact of this, and will consider adjustments to the proposed budget and levy on that basis, as well as in response to any consultation responses received."
Current levies are £492 for principals and managers, £400 for other private practice solicitors with three or more years' experience, £200 for those in their first three years, £130 for those practising outwith Scotland, £120 for in-house lawyers and £189 for advocates. Conveyancing and executor practitioners pay at the £400 or £200 rate for solicitors as appropriate, and members of the Association of Commercial Attorneys £127.
All these rates would remain unchanged, as would the complaints levy of £5,000 and the approved regulator fee levied on the Law Society of Scotland of £3,000.
The SLCC's draft operating plan for the 2021-22 year focuses on delivering and driving improvements in its complaint handling functions while supporting the legal sector to prevent the common causes of complaints. It also outlines its response to the changing landscape and working environment created by the impact of COVID-19. The SLCC has reviewed and refined its 2020-24 strategy to take account of this.
Chief executive Neil Stevenson commented: "The proposed budget is set to achieve the successful delivery of our core duties – managing complaints and awarding redress, monitoring trends and delivering guidance and best practice support to the sector. The positive impact of improvements and efficiencies, with the number of complaints we expect to see in the coming year, mean that we can propose a static levy.
"We commend the extraordinary efforts of many lawyers to keep cases and transactions moving for clients in the most difficult of circumstances. However, work for the SLCC has continued to arrive, and we need to play our part in ensuring that access to justice, in terms of our remit, is not hindered by the current situation.
"We welcomed the hugely helpful engagement with our requests for input on the impact of COVID-19 on transactions and potential complaint numbers. This has informed our projections, and we look forward to considering any further input to this consultation."
Chair Jim Martin added: "I am immensely proud that the organisation responded swiftly to ensure we could continue to deliver our statutory functions efficiently and effectively in this year’s challenging circumstances, while continuing to focus on improvements to our processes. We continue to monitor and respond to the changing external environment, and to prepare for the changes still to come. Plans for this are set out in our refined strategy and our 2021-22 operating plan.
"As well as improving our current processes, we continue to support reforms that will fundamentally improve the complaints and wider regulatory system."
"Follow own logic": Society
The SLCC should "follow their own logic" and make a substantial reduction in the levy, to match a fall in complaints received, the Law Society of Scotland said in its initial reaction to the proposals.
Complaints to the SLCC in 2019-20 dropped by 22%, from 1,326 to 1,036, compared to the previous year, and the Society said the proposed freeze did not go far enough when the profession was "suffering the harsh economic reality of the pandemic".
President Amanda Millar commented: "The SLCC has justified inflation-busting rises in the levy in recent years by pointing to an increase in complaints received. Their annual report shows complaint numbers dropped by a substantial percentage last year, so according to their own logic the levy should likewise fall.
"While the Law Society has always disputed that the increase in complaints has justified the size of the increase, the SLCC should not have it both ways. If the two figures are to be linked when it's to the SLCC’s benefit, they should also be linked when it benefits the profession.”
Click here to view the consultation. Responses are due by Thursday 18 March.