A row has broken out over Law Society proposals to increase the practising certificate (PC) fee by 31% as the Chancery Lane struggles to get its accounts out of the red.
Yesterday (12 July) the council agreed to increase the PC fee from £495 to £650, in a move which would increase the society budget to more than £80m in 2002, against just under £70m in the current financial year.
However, dissenters at the Law Society AGM, which followed the council meeting, proposed a motion that the fee remain the same this year and be reduced to £400 next year.
The rise will mean a number of large firms now facing a bill for Chancery Lane in excess of £1m, though the move is facing the strongest opposition from small and high street firms, who will be hit worst by the rise.
The motion, presented by former president Robert Sayer, failed with a significant majority. But using a Law Society bye-law the supporters of the motion demanded that the issue be put to a postal vote of the profession.
The Law Society has been running at a deficit for the past two years with the current deficit standing at an estimated £5m.
The biggest single cost to the Law Society is the Office for the Supervision of Solicitors (OSS), which this year amounted to about £27m.
However the council hopes to reduce costs with the introduction of a polluter pays scheme, whereby those found at fault contribute towards the cost of the OSS.
Although the details of the proposals have yet to be released, the council voted yesterday that the scheme be implemented.
The move is set to be popular with large commercial firms, who have long resented the costs they pay for regulation which tends to involve small firms.
The council also agreed that reform of the redress system should be sent out to consultation.
The sharp rise in Law Society costs comes as Chancery Lane is increasing investment in the OSS in a bid to clear its backlog of complaints.
The decision follows the annual report of the Legal Services Ombudsman, Ann Abraham, on Wednesday (11 July) in which Abraham said that the OSS still had to make huge progress, despite slashing the number of complainants.
Legal costs in the Law Society’s battle with former vice president Kamlesh Bahl, which last week resulted in the society being found guilty of racial and sexual discrimination at a tribunal hearing look set to leave Chancery Lane with a final bill of £2m.
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