The Law Society last week voted through its 'polluter pays' scheme to offset the soaring costs of its regulatory arm – which last week led Chancery Lane to try to push through a 30% increase in the cost of practising certificates.
Under the scheme, which is expected to be in force by the end of the year, firms with a high number of upheld complaints would have to pay more towards regulatory costs, with up to 50% of the Office for the Supervision of Solicitors (OSS) to be funded through fines.
The society has yet to decide whether to levy a fixed fee over a certain threshold or variable rates depending on the size of the firm.
The move should appease large firms who claim they are subsiding the OSS, which spends most of its time investigating small and high street firms.
Chancery Lane, which is committed to maintaining its grip on its regulatory function, is hoping the move will help reduce opposition to soaring OSS costs, which have resulted in the Law Society proposing that the practising certificate be raised from £495 to £650. The proposal, which would raise its budget to £80m next year, was opposed by a number of council members and will have to be put to a postal vote of the profession.
However, the Law Society is determined to boost investment in the OSS. Despite slashing the size of the OSS backlog, the Legal Services Ombudsman Ann Abraham's annual report last week concluded that the Law Society will lose its regulatory powers if its service does not improve dramatically.
Meanwhile, at the society's AGM on 12 July, the OSS came under attack from critics within the profession who said investigations into negligence applications breached human rights.
Rebel proposals to bar the OSS from investigating negligence claims and strip it of its powers to hear minor cases will also be put to a postal ballot.