LSB CONFIRMS FLEXIBLE LEVY PAYMENT ARRANGEMENTS

The Legal Services Board (LSB) has today announced its formal statutory consultation on the way in which the levy to cover the set-up costs of the LSB and the Office for Legal Complaints (OLC) will be recovered from the Approved Regulators

The decision follows a public consultation issued by the LSB in April and which closed on 2 July. Today’s decision takes into account submissions made by individual Approved Regulators on the way they would prefer to make the required payments. As a result, the levy can now be paid in three equal annual instalments, with the first instalment due 31 March 2010. In addition, and in response to requests, the LSB has agreed that Approved Regulators will have the flexibility to pay a greater amount, or even the entire amount, on the date of the first payment. This decision represents a revision of the original recommendations outlined in the consultation paper, which proposed a split of 70% of costs in the first year, 20% in the second and 10% in the third. The LSB will be consulting separately on the way in which on-going running costs for the two bodies should be recouped. Chris Kenny, LSB Chief Executive said: “A major driver of this decision has been to give Approved Regulators as much flexibility as possible in their payment terms, for maximum sensitivity to their operations. To achieve this, we have revised our initial recommendations in response to calls made through the consultation responses. In addition, we have built in the added flexibility for ARs to pay a greater proportion of the total amount early, as some have requested”. Notes for editors: 1. The Legal Services Act 2007 provides for the creation of the Legal Services Board as the oversight regulator for legal services in England and Wales. 2. The cost of implementing the OLC and LSB were calculated by the Ministry of Justice as being £19.9m, to be repaid over three years. The paper also addresses recoupment of running costs for the LSB from January to March 2010, which are £1.14m. 3. Statutory provisions relating to the repayment of costs and the levy are set out at sections 173 and 174 of the Legal Services Act 2007. 4. The paper setting out these decisions can be found at: http://www.legalservicesboard.org.uk/what_we_do/consultations/index.htm . The new consultation now focuses on whether the draft statutory instrument prepared as part of the document adequately captures the policy intention. 5. The original consultation paper on this issue, which was issued on 9 April 2009 and closed on 2 July 2009, can be found at: http://www.legalservicesboard.org.uk/what_we_do/consultations/2009/pdf/consultation_on_the_levy.pdf 6. The levy for establishment costs for the LSB and running costs for the LSB up until the end of March 2010 is apportioned between Approved Regulators based on the proportion of authorised persons regulated each body at 1 April 2009. 7. The levy for the establishment costs for the OLC is apportioned based on the number of service complaints, relative to the total number of service complaints against all authorised persons, which an Approved Regulator has received over a three period ending 31 December 2008. The OLC will consult separately on its ongoing running costs in due course. 8. For further information, please contact Craig Jones on craig.jones@legalservicesboard.org.uk or on 020 7271 0068 / 07956 226562

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