The oversight regulator is planning to increase its budget by 11% after the cost of investigating the Axiom Ince scandal came out higher than expected.
Papers published ahead of today’s Legal Services Board meeting reveal for the first time that the total cost of the Axiom Ince review was £231,000, including counsel costs. This was accounted for by £73,000 spent in the year 2023/24 and £154,000 since.
Earlier this year, the LSB had allocated an initial £60,000 to pay the costs of Northern Ireland firm Carson McDowell investigating the Solicitors Regulation Authority’s actions over the collapse of the national firm Axiom Ince.
The report was published last month and its findings largely dismissed by the SRA, despite the investigation finding that the regulator did not act adequately, effectively or efficiently and did not take all the steps it could or should have taken. The LSB has pledged to take enforcement action against the SRA but has yet to state what form that will take. The SRA board met last week and the papers for that meeting are yet to be published, but chair Anna Bradley did not even mention Axiom Ince in her latest 'reflections' roundup of the meeting - perhaps another sign that the regulator prefers to move on from the matter.
The investigation costs will be met by the profession, which has already had to shoulder a 270% rise in contributions to the compensation fund to pay back clients of Axiom Ince.
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The LSB is now going to consult on a provisional annual budget of £5.85m, representing an 11% annual increase. This equates to around £2.92 for every authorised lawyer.
The organisation says it has identified several opportunities for savings, including reducing the headcount, renegotiating the outsourced IT service contract and deferring some research projects.
But additional costs will be incurred, notably an office move taking place in the second half of 2025.
The budget currently includes revenue costs of £189k and capital costs of £500k for the move but these costs are indicative at the moment as the organisation does not know where it will be moving to.
The papers said the LSB had received confirmation from its landlords, the TUC, that it will not be able to extend its lease at the Rookery beyond September 2025. This means that an office move in 2025 is a certainty.
The final decision on the budget will be made in March and will need to be approved by the Ministry of Justice.
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