The Solicitors Regulation Authority (SRA) has signalled it will shift a greater proportion of contributions to the Compensation Fund on to individual solicitors following its consultation on the 2026/27 business plan.
Where currently 50% of fund resources comes from individual contributions and the other half from firms, the SRA is proposing a change to 70% of funds coming from individuals and 30% from firms.
The move, which is subject to approval by the Legal Services Board, would see firms which employ 29 solicitors or fewer (around two thirds of all firms) pay less into the compensation fund overall in 2026/27 than they would have done if contributions remained calculated on a 50/50 basis; £2,170 for an SRA-regulated firm (compared to £3,600 under 50/50 model) and £170 for an individual solicitor (compared to £120 under 50/50 model).
Sarah Rapson, chief executive of the SRA, said: “We are grateful to everyone who took the time to respond to our consultation. Lots of insightful and constructive feedback was received, which is all proving valuable in helping us to refine our final position in key areas.
“Stakeholders understood the need for change and investment, and there was particularly strong support for the work we outlined to protect consumers and uphold trust in legal services and the profession more generally. Not surprisingly we also heard some challenge and concerns, not least the impact of the compensation fund fee increase on smaller firms.
“The Board has carefully considered what we can do to address these issues ahead of submitting our final funding requirement to the Legal Services Board for approval.”
In its draft business plan submitted for consultation the SRA had sought a 29% funding increase enable it move from “reactive to proactive regulation”.
The SRA said it had canvassed views of the profession, consumer representatives and wider stakeholders and found “general support for its ambitious programme of improvements for the year ahead”.
It added it would now consider where it can make improvements to its proposals to address some of the specific themes arising in feedback, specifically around transparency, by providing more detail and regular updates on progress, providing more information on the impact of its work, and providing evidence that investments are delivering value for money, before publishing its final plan later in the summer.
