Costs News

21 October 2021
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Legal Services Board approves 2% increase in practising fee for Costs Lawyers

The Legal Services Board (LSB) has approved the Costs Lawyer Standards Board’s (CLSB) application for a 2% increase in the 2022 practising certificate fee (PCF) from £275 to £281.

The CLSB projects total PCF income for 2022 of £191,020, based on the assumption of 670 individuals paying a PCF. This is a slight reduction from last year’s 675.

LSB chief executive Matthew Hill said in the decision notice that the application enabled the oversight regulator “to be confident that the CLSB has carefully and properly planned its financial position for the forthcoming year. The CLSB has also updated its reserves policy and we are satisfied it complies with the requirements of the rules”.

The target level of uncommitted reserves was reduced from 12 months to six months’ operating expenditure – £110,000 is currently held – and the yearly contribution to reserves halved to £5,000.

The PCF was static at £250 from 2011 to 2019, increasing to £275 in 2020. Next year’s rise “reflects changes in our projected cost base”, the CLSB said in its application.

The regulator said that, in setting the figure, it had been “mindful” of the impact of Covid-19 but that its latest coronavirus impact survey showed this had in fact been less than anticipated. There was also no evidence that the level of PCF was causing a particular impact on hard-pressed legal aid practitioners.

The three main items in the CLSB’s budget for 2022 are £30,985 on regulatory policy – a review of the code of conduct is the first of its business plan priorities – £20,056 for the levies payable for the costs of the LSB and Legal Ombudsman, and £19,300 on external engagement.

There were 21 responses to the CLSB’s consultation on the PCF – 14 supported the proposed increase and one felt it was “not unreasonable”.

The regulator noted: “Respondents commented that the PCF represented good value for money and reflected the positive change that had recently been made at the CLSB.”

Five responses opposed the rise and the other did not address it.

The second business plan priority – there are 17 in total – is to implement changes to the training rules and other regulatory arrangements relating to education, informed by evidence from the CLSB’s current competencies project, “to modernise the requirements for becoming a Costs Lawyer and facilitate a wider range of flexible pathways to qualification”.

The application to the LSB expanded on this, saying that the competencies project suggested that the Costs Lawyer qualification was “not currently instilling all the skills and attributes that a student needs to be a successful practitioner”.

It continued: “A greater focus on skills such as effective communication, self-management and agile thinking will contribute to the development of an independent, strong and effective profession. As well as assuring consistent high standards, regulatory changes will also ensure the course can be delivered flexibly, making it accessible to a more diverse range of students.”

The application revealed that the competencies project, which had not been a business plan objective last year, was funded by £10,466 more in PCF income than the CLSB had budgeted for last year.

This was due to “a higher-than-expected number of practitioners renewing their practising certificate for 2021” after it took a conservative estimate of the likely size of the regulated community given the uncertainty caused by Covid-19.

Another key priority for next year will be evaluating the extent to which the revised approach to continuing professional development has been understood and adopted by Costs Lawyers.

Mr Hill welcomed the CLSB’s “transparency and accountability on its activities in its engagement with its regulated community. This all serves to promote a meaningful discussion regarding the costs, benefits and value of regulation”.

He noted that the CLSB did not get “significant engagement” on its proposed business plan and suggested that it consider “alternative routes to obtaining input from the profession beyond its consultation document”.

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