Previously, CLC-regulated firms paid the LeO levy through their practice fees, which are calculated according to turnover. Under the CLC’s changes―the first of their kind in the legal sector―the LeO levy will be separated from the practice fee, reducing the practice fee by an average of 23%.
More than 60% of CLC practices do not generate any referrals to LeO.
For the first year, all firms will share 70% of the LeO costs while the remaining 30% will be allocated according to average number of complaints generated in the past three years.
This means 51 practices (23%) will pay more. Of these, two practices will pay an extra £16,000 and £12,000 respectively, 16 firms will pay between £5,168 and £1,044 more, and 33 practices will pay between £821 and £25 more.
The changes will be phased in over four years, starting at 30% of LeO costs being divided according to usage and rising to 80% of LeO costs.
CLC chief executive Sheila Kumar said: ‘Despite the CLC reducing its own operating costs in a sustainable and steady way over the past five years, the LeO’s costs – which are beyond our control – have grown, and continue to grow, very substantially.
‘Introducing a usage fee is fairer, builds in better proportionality into meeting LeO costs and will encourage improvements in complaints handling. We will monitor the impact of the new approach on complaints handling.’
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