PCF Review

Review of the PCF approval process, including a targeted review of the regulators’ approach to the non-regulatory permitted purposes (‘the review’)


As an oversight regulator, each year the LSB must assess the approved regulators’ applications under section 51 of the Legal Services Act 2007, for the approval of their respective PCF. Section 51(2) of the Act stipulates that an approved regulator may only apply amounts raised by PCF for one or more of the permitted purposes listed in section 51(4).

Reviewing our framework

Although we last amended the existing Rules and Guidance in 2016, our process for assessing practising fee applications remains largely unchanged since it was first introduced in 2011. In this time, the LSB’s overall approach to regulation has evolved significantly. In particular, we introduced our regulatory performance framework in 2018 and new Internal Governance Rules in 2019.

Through the review process we have developed and refined our objectives for revising our Rules and Guidance. Overall, through the draft Rules introduced in the consultation paper, we are seeking the following outcomes:

  • To increase transparency around approved regulators’ and regulatory bodies’ programmes of activity and how these will be funded, allowing those that pay the practising fee to drive accountability for its expenditure.
  • To support more meaningful discussion and debate across the sector on the purpose, benefits, costs and value of regulation, which ought to result in improved standards.
  • To allow regulatory bodies to demonstrate that they have sufficient funds and financial resilience to regulate and operate efficiently and cost effectively
  • Supporting the LSB’s wider oversight responsibilities, including greater integration of the process into the LSB’s wider performance assessment framework.

What have we done so far?

Initially, we assessed all practising fee applications for 2018/19 and 2019/20 and identified key themes, which underpinned and informed the development of some initial working proposals for discussion with approved Regulators and their regulatory bodies

In February 2020, we commenced the first round of our engagement with all Approved Regulators and Regulatory Bodies on our initial working proposals. We also held workshops with stakeholders in March 2020. We received constructive feedback, which helped to inform our emerging thinking on the proposals.

In developing the new framework which we are consulting on, we have sought to address the key themes which have arisen through the review and to introduce draft Rules only where we have identified that they would provide greater clarity on the LSB’s expectations and improve the overall practising fee application and approval process.

We consulted on proposed changes to the draft Rules and Guidance. The consultation closed on 8 October 2020.

What do we plan to do next?

We are currently considering all responses received to the consultation and will make any resulting amendments to the draft Rules and Guidance.

We intend to implement the final Rules and Guidance by January 2021, in time for the 2021 practising fee application cycle.