The Council for Licensed Conveyancers (CLC) proposal is the first of its kind among legal regulators. Currently, it pays LeO’s annual charge out of the money collected through the annual practice fee, which is collected proportionally to firms’ turnovers. The LeO budget for the coming year is £14.5m, an increase of 13%.
CLC analysis found nearly half of practices do not generate any referrals to LeO. CLC-regulated firms generated an average of 256 cases each year in the past three years, only 4% of LeO’s total, but the annual charge from LeO amounts to 21% of CLC’s total expenditure.
In its ‘Review of licence and practice fee arrangements consultation paper’, published last week, it proposed separating the cost of the LeO levy from the practice fee, which would be reduced. There would be two elements to the standalone fee―a basic fee for all firms and a usage fee based on the number of cases from that firm referred to LeO. The CLC acknowledges, in the consultation, the risk that this would incentivise firms to settle complaints to prevent referrals.
CLC chief executive Sheila Kumar says: ‘LeO plays a valuable role, but its cost is variable and outside of our control. As a result, it can obscure the actual, falling costs of regulation by the CLC.’
The CLC also proposes changing the banding for fees as it is regulating more large practices than in 2010, when the banding was set in place. The submission deadline is 9 July.
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