SLCC proposes shifting levy burden towards principals

Principals in private practice could end up paying proportionally more, while their employees along with in-house lawyers and advocates would pay less, under proposals for the coming year's levy published today by the Scottish Legal Complaints Commission.

While seeking an overall 9% increase in its budget income, the SLCC has offered two different models as it seeks to respond to feedback that certain sectors pay more by way of levy than is justified by the level of complaints they generate.

Charged on the current basis, its general levy would rise by £35 from £386 to £421 for the year fom 1 July 2019, with discounted rates of £126 for in-house lawyers and £199 for advocates.

However its proposal is that the £386 rate be frozen for employed lawyers, but jump by £108 to £494 for partners and managers in private practice. In-house and advocates' rates would also be frozen, at £116 and £183 respectively.

In its consultation the SLCC observes that almost all the main issues which lead to complaints, "understandably, relate to private practice where solicitors are working directly with the public, often on complex and personally challenging issues".

It continues: "At the moment, practising certificates (to which the SLCC levy relates) are not in any way restricted or specialised to one area of law, so there is no easy mechanism that offers efficient levy collection in the current statutory model to target these areas.

"However, there are strong arguments that in-house lawyers and advocates generate only a marginal number of complaints and cost, and that they should thus pay a lesser share. We have always discounted these rates compared to those paid by private practice, but each year we are open to feedback from the profession on this apportionment issue."

Regarding the need to raise additional money, the SLCC says it faces a "triple challenge": a further increase in the number of complaints being made, marking a rise of 22% over the past three years; its success in reducing complaint handling times over the last 24 months, "but there is still more to be done"; and balancing these challenges with its "mission to deliver a fair service that delivers robust outcomes for practitioners and consumers alike".

Spending on staff salaries is projected to rise by 12.2%, and on indirect staff costs by 8.3%. Non-staff costs are budgeted to rise by 3.8%, due largely to a higher depreciation charge. The budget increases frontline staff, covers the public sector pay deal, invests in IT improvement to aid smarter working, and supports ongoing management change with a view to improving efficiency.

Jim Martin, SLCC chair, commented: "The funding model is fundamentally flawed. This is a multi-million pound industry yet the complaints model is funded, in the main, by levies on individual solicitors, often subsidising their private sector employers. Regulatory reform needs to move to a focus on regulating the business units that provide services to the public and not just individual staff within them.

"Ultimately business owners set the risk and quality culture in a business, and are accountable for services delivered to the public. Business owners need to meet the cost of complaints about their businesses. In the context of rising complaints, and an ongoing pattern of common issues in certain areas, we are interested in views on whether this is a fairer approach and encourage all sectors of the profession, and the public, to engage in this debate."

Chief executive Neil Stevenson added: "Not only is the number of complaints increasing, but individual complaints are becoming longer and more complex to work on. We know that our staff work hard and combined with changes to our process, we have been working through more complaints. However, we cannot stand still and must meet the continuously rising demand. We are keen to explore all options to improve our processes where we can, but will also continue to make the case for new primary legislation to create a better statutory system, and call on the Scottish Government to move rapidly to consult on the recommendations of the recent independent review of legal regulation."

Click here to view the consultation. The deadline for responses is 5pm on Thursday 14 March 2019.