Key areas of concern are bulk claims litigation and a need for a consumer protection review
The Solicitors Regulation Authority (SRA) in the ULK has raised the possibility of increased charges for solicitors, citing new and emerging risks in the legal sector, The Law Society Gazette reported.
The announcement follows the regulator's consultation on its 2024/25 business plan, during which it has identified issues such as bulk claims litigation and a need for a consumer protection review as key areas of concern.
Among the emerging risks is the fallout from the collapse of law firm SSB, which has led to a surge in bulk claims litigation. The SRA also pointed to the need to reassess its compensation fund and expressed concerns about its capacity to manage and utilise its data effectively to detect patterns that may indicate future risks. The regulator’s chief executive, Paul Philip, indicated that these factors might necessitate "hard choices" regarding resources and could impact future budgets and fees.
The SRA acknowledged that while it has not yet determined the additional resources required, fee increases are possible. Philip emphasized that the SRA is exploring ways to improve efficiency and reprioritize existing resources. He also hinted that the SRA might tap into its reserves to supplement the current year’s resources, potentially affecting future budgets.
Philip reaffirmed the SRA’s commitment to consumer protection, noting that the regulator has responded to feedback on its business plan by introducing measures to improve information for consumers. The SRA is also prioritising swift action to enhance its ability to identify and mitigate risks in the legal profession. "Consumers are at the heart of our strategy and this business plan," Philip said in a statement. "We are scoping out what we need to do to address a range of new and emerging risks."
A potential fee increase is expected to face resistance from the profession, particularly following recent demands for higher contributions to the compensation fund. The fund had to be replenished after a series of high-profile interventions, and any additional financial burden is likely to be met with concern by solicitors.
The SRA has also acknowledged the need to improve how it handles data on complaints about solicitors and firms, with plans to possibly integrate artificial intelligence to help detect emerging risks. Anna Bradley, chair of the SRA, stressed the importance of a proactive approach, stating, "It is about getting on the front foot and trying to ensure the things that would be detrimental to users of legal services are addressed before they crystallize."
The SRA will keep stakeholders updated throughout the year as it continues to assess the necessary steps to address the challenges ahead.
