The Solicitors Regulation Authority (SRA) has confirmed changes to its proposed 2026/27 business plan and Compensation Fund contributions following consultation with the profession.
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Responding to concerns about the disproportionate impact of increased contributions on smaller firms, the SRA has announced that it will change the way Compensation Fund contributions are apportioned. Rather than splitting contributions equally between firms and individual solicitors, the regulator is proposing that 70% of the fund is contributed by individuals and 30% by firms.
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Subject to approval by the Legal Services Board, the proposed Compensation Fund contributions for 2026/27 will be:
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• £2,170 for an SRA-regulated firm holding client money (reduced from the originally proposed £3,600 under the previous 50/50 model).
• £170 for an individual solicitor (increased from the originally proposed £120).
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The SRA says the change is intended to address the changing makeup of the profession. Since the current arrangements were introduced in 2010, the number of individual solicitors has increased significantly while the number of SRA-regulated firms has fallen. The revised 70/30 split is intended to restore a more balanced approach to funding the Compensation Fund and reduce the burden on smaller firms. Around two-thirds of firms employing 29 solicitors or fewer are expected to pay less overall than they would have done under the previous proposals.
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The proposed contribution levels will now be submitted to the Legal Services Board for final approval ahead of the annual practising certificate renewal process this autumn.
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Members can read the SRA’s full response to the consultation and the proposed changes on the SRA website.