SLCC proposes further 8.5% levy rise

Solicitors would pay an extra £30 a year in their levy to the Scottish Legal Complaints Commission for 2018-19, under budget proposals published by the Commission today.

The 8.5% increase, which follows a 12.5% increase for the current year, is attributed by the SLCC to a 14% rise in complaints over the last two years, coupled with an end to a longstanding subsidy of costs from its reserves. The proposed increase in the SLCC’s budget is 5.2%, which will be used to recruit new case workers to handle the increase in complaints

At the full rate the levy would rise from £356 to £386. Solicitors in their first three years of practice would pay half that, or £193, up from £178; those practising outwith Scotland £126, up from £116; and in-house lawyers £116, up from £107. The advocates' levy would rise from £169 to £183. Conveyancing and executry practitioners would pay equivalent rates depending on experience and employment; and members of the Association of Commercial Attorneys £123. No change to the complaints levy is proposed.

At the same time the SLCC has called on members of the public, and legal professionals, to join a discussion about who should pay for the increasing cost of complaints about lawyers. One issue is whether the levy can be apportioned more closely to practice sectors that generate more complaints. This, the consultation states, raises complex issues, which "will take time, and will potentially require new data collection and a new approach to levy collection – the cost of which would need weighed against the advantages". Meantime, it would be possible to rebalance the various levies in favour of groups such as advocates that generate low levels of complaints.

If there were no increase for advocates this year, the increase for solicitors would be 8.7% instead. If the rise were confined to solicitors in private practice, it would come to 10%.

It is also consulting on how that funding should be arranged, now that the Law Society of Scotland has been authorised as an approved regulator of new business models allowing non-solicitor ownership. With a "realistic total cost" to the SLCC of around £160,000, it states: "The SLCC must balance avoiding creating a barrier to entry for a new regulator, and to new business models, with the need to recoup costs already outlaid over the last eight years, costs of operation, and ensure no impact on the current levies on solicitors, advocates, and commercial attorneys." Having "heavily discounted" these estimates, it suggests an approved regulator fee of £20,000, with a complaints levy for an upheld complaint of £10,000. 

In its paper the SLCC states that complaints in the first two quarters of 2017-18 showed an 8.6% increase on the same period in the previous year, adding: "If this year follows the same pattern as last year this may slacken in the second two quarters of the year, but will potentially still lead to a third consecutive year of increased complaints. The board must also consider a scenario in which the rise is steeper." Complaints appear to be rising across the board, with no significant trends being identified.

The SLCC has also committed to increasing the efficiency and effectiveness of the complaints procedure as a key focus of its proposed work plan for 2018-19. It will also continue to campaign for legislative reform, during and after the current independent review of legal regulation.

CEO Neil Stevenson commented: "Complaints remain a tiny proportion of all legal work. However, as numbers increase, and those entering the later, more costly, stages of our process also rise, our costs increase. We know that the vast majority of complaints come from a small number of practice areas. Last year the Law Society of Scotland questioned the proportionality of the levy on certain groups within the profession, such as in-house lawyers, in the Society’s public response to our consultation. In recognition of that, part of this year’s consultation opens up the question of how the levy might be divided among different groups of legal practitioners. We are open to the views of the profession, and those of the wider public, about where we should be moving to: a levy that falls more on those areas that generate most complaints and costs or, conversely, a single rate for all lawyers.

"This year also sees the first year a levy will be due from a legal services approved regulator, who will in turn be licensing alternative business structures with non-lawyer ownership. The 2010 legislation enabling this anticipates that this funding will come from the new legal services market. We see it as critical that the current levy for individual lawyers does not subsidise this new market. However, we must also consult approved regulators and take their views into account."

Mr Stevenson added: "We recognise that as we were able to reduce the levy in previous years, through drawing on our limited reserves, an increase this year will not be welcome. It was always our position that using reserves to subsidise the levy could not continue indefinitely. However, we have continued working to try to tackle the common causes of complaints through information to lawyers and consumers. In the longer term, the best outcomes for the public and the legal profession will come from working collaboratively to reduce complaints, and therefore our workload and the obvious operating costs associated with that.

"We are also pleased to announce major saving this year, including the potential for over £80,000 over the next five years in terms of property costs, and a significant reduction in legal costs, now last year’s legal challenges against us have been dealt with."

Click here to access the consultation on the budget and levy proposals. The consultation closes on 13 March 2018.