Costs News

07 November 2019
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Legal Services Board approves 10% hike in Costs Lawyer practising fee

The Legal Services Board (LSB) has approved the Costs Lawyer Standards Board’s (CLSB) application to increase the practising certificate fee (PCF) by 10% to £275, the first increase since 2011.

Twenty-five of the 30 responses to the CLSB’s consultation with the profession supported the rise.

One of the reasons given by the CLSB for the rise was to ensure sufficient contingency and contribution to reserves, given that the lack of newly qualified Cost Lawyers over at least the next three years.

The increase will result in income of £181,500 for 2020, based on the assumption that there are 660 regulated Costs Lawyers. In his approval letter, LSB chief executive Matthew Hill (pictured) said: “The application highlights that the number of Cost Lawyers may be lower than 660.

This is because there is currently no route to entry into the Costs Lawyer profession to offset natural attrition out of the profession. If the professional qualification reopens in 2020, CLSB anticipate seeing newly qualified numbers begin to rise again by 2023.”

As we reported last month, applications for the 2020 Costs Lawyer qualification are now open.

The CLSB’s initial application provided indicative budgets for the next three years, which suggested no further increases in the level of its PCF over this period beyond inflation.

Mr Hill said: “The CLSB has since clarified that it expects to be in a better position at the point of setting next year's budget to assess both its progress in making improvements against the LSB’s performance framework and the level of resourcing required to make and sustain progress going forward. This process will begin around April 2020…

“It has therefore modified the position in its application – i.e. that future increases are unlikely – to make it clear that it will focus on setting resources at a level that enable it to deliver regulatory outcomes with which it is tasked.”

The CLSB also intends to increase its reserves over the coming years to the level of a full year’s operating costs – it currently has £105,000 in reserves and wants to reach £160,000.

While, in previous years, the CLSB has simply allowed any surplus from the year to roll over into its reserves, there is a specific provision for 2020 for £10,000 to be paid into reserves.

Mr Hill said the LSB would normally consider a year’s costs in reserves to be excessive.

“However, given the current risk associated with the fact there is no current route of entry into the profession, we are satisfied that the CLSB’s policy is justified and does not result in excessive reserves.”

Separately, Mr Hill’s report to the October meeting of the LSB said: “We reported last month that the sustainability of the CLSB was a concern. The current position is more optimistic given the appointment of the new chief executive and the positive steps that have been and are being taken to address the weaknesses identified in the transitional performance assessment.

“Nevertheless, the challenges remain significant. We continue to monitor the issues closely. The LSB chair and chief executive will attend the CLSB October board meeting.”

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