4 August 2022

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Practising fee to remain static under CLSB plans for 2023

Business plan sets out how regulator will take forward recommendations in Hook Tangaza review of profession

The practising fee for Costs Lawyers is set to remain static at £281 in 2023 despite rising costs, the Costs Lawyer Standards Board (CLSB) has proposed.

The regulator’s annual consultation on the fee showed that its proposed budget for the year was £197,612, some £6,500 more than the current year.

The fee rose by £6 last year, mainly because of a slight reduction in the size of the profession beyond the usual level of natural attrition caused by the pandemic. However, this year “the number of practitioners within our community has stabilised at a healthy level”.

Despite rising inflation and year-on-year increases in the levies the profession pays through the regulator – this year £23 per Costs Lawyer for the Legal Services Board, £7 for the Legal Ombudsman and £9 for the Legal Choices website – the CLSB said: “We are conscious that it will also affect business costs for lawyers, potentially placing a disproportionate burden on sole practitioners. We are mindful that any increase in the cost of regulation could increase that impact further.”

The CLSB said it had pursued a variety of cost savings, such as replacing its virtual office in Manchester with an online PO Box service, which was “hundreds of pounds” cheaper per year.

Last year, the CLSB revised its target level of uncommitted reserves downward to six months’ operating expenditure, which it currently has, and is slowing building up separate committed reserves for planned future IT development projects. The target level for this is £30,000. “We have achieved 35% of this target so far and we will make further contributions over the next five years to reach the target level.”

Several elements of the CLSB’s proposed 2023 business plan follow on from the report it commissioned on the role Costs Lawyers could have in reducing the cost of legal services, which was published in June:

  • Delivering a programme of work “aimed at harnessing the unique insights that Costs Lawyers can bring, to stimulate discussion across all the legal regulators about how legal costs can be better controlled”;
  • Investigating the risks and benefits of entity regulation amongst costs firms, including whether there was a cost-effective version of entity regulation that may be practical for the CLSB to implement; and
  • Considering whether and how to implement measures to more strongly distinguish between the interests of intermediaries (professionals who instruct Costs Lawyers on a client’s behalf) and the interests of the Costs Lawyer’s ultimate client in its regulatory arrangements.

The business plan said the CLSB would also “explore ways of encouraging competition in the market for legal services and promoting the interests of consumers” through considering how the CLSB’s branding was used by the sector, how its competency frameworks could ensure the profession provided the best value to end users, and how the overall framework of regulation “could best support the positive role that Costs Lawyers can play”.

CLSB chief executive Kate Wellington wrote: “A key priority for 2023 will be developing a successor mid-term strategy, setting new ambitions and updating our vision for the coming four years.

“Through our 2023 business plan priorities, we will explore important questions about what kind of regulator is really needed for the Costs Lawyer profession, how we can address structural issues in the market, and how we (and the profession) could add value to the legal sector as a whole.

“This represents the next phase in securing the CLSB’s future as a stable, efficient and thoughtful regulatory body.”

The consultation closes on 5 September.