SLCC publishes a budget for a time of uncertainty

The SLCC has today laid its budget for 2024-25 in Parliament after the SLCC Board approved its draft budget unchanged following a statutory consultation.

Commenting on the budget, SLCC Chair, Jane Malcolm said, “Our thanks go to those who took time to respond to our consultation and for their helpful comments and suggestions. We considered all the responses carefully and will follow up on the specific points made directly with those stakeholders, as we look forward to working together to deliver our operating plan for 2024-25.

“With legislation to reform our functions being debated in parliament, the coming year brings significant opportunities to improve legal services regulation for consumers and the profession alike. We are ready to play our part in making that a reality, and this budget will support the organisation in doing just that.”

However, the organisation has confirmed that uncertainty around reform proposals, coupled with the significant fallout of a ceased firm, have increased pressure on its budget. This uncertainty, plus rising staff, IT, legal and court costs – which together account for most of the organisation’s expenditure – mean the levy will rise by 13% this year.

Chief Executive, Neil Stevenson said, “We have a duty to ensure we have sufficient budget to discharge the powers parliament has given us. That includes delivering an efficient and effective complaints process, overseeing relevant professional organisations’ complaint and redress arrangements, supporting the statutory Consumer Panel, and driving improvements in complaint handling across the sector.

“Forecasting the budget required to support this work is always a challenge, but even more so this year, with significant uncertainty about the volume of complaints arising from the failure of one large firm plus the ongoing debate about changes to our statutory functions. We had specifically asked for any useful intelligence on likely complaint numbers in our consultation, but in the absence of that, we must make our best prediction on the information we have.

“Despite inflation starting to fall, we also continue to see costs rising in some key areas. That includes legal and court costs, with court fees having risen by 2% at the beginning of April and the Scottish Courts and Tribunals Service consulting on a proposed 10% increase in all court fees to commence in November 2024.

“With appeals to the Court of Session currently permitted on all our decisions, and action to secure files only possible via the courts, we have no ability to avoid these costs. Even where we are successful in being awarded costs and we are able to recover them, they rarely cover the full costs of us having brought the action to court, let alone the staff time and legal costs spent pursuing the firm in advance of taking court action. Those costs are substantial, and they form a significant portion of the levy we ask all lawyers to pay. That is why we are taking all the action within our powers to address this issue and calling for new powers to assist us in doing so.

“Looking to the longer-term future we are excited at the possibility of greater efficiency promised by the new legislation. There is still some way to go in the parliamentary process, though, and we know that in previous legislation late amendments were agreed which have since cost millions to fund. We won’t know if the new system will cost less, the same or more until we see the final Act, but we encourage all stakeholders to focus on efficiency, proportionality and the public interest.

“We will continue to work as efficiently as possible within the current framework and to support efforts to deliver a statute that better supports the goal of an efficient and effective complaint system. This budget will help us to do that.”