The Solicitors Regulation Authority (SRA) is seeking greater resources to tackle increases in investigative work, following what it calls a “sharp and sustained increase in reports of solicitor misconduct”.

The solicitors’ regulator for England and Wales has proposed a budget increase of 23% for 2025/26 to £86.5m, following the publication of next year’s business plan on 7 May, which is open for consultation until 25 June.

The regulator says the latest available data shows that it opened an average of 40% more investigations per month than in the same period in the previous financial year.

While it said it was concluding 18% more investigations compared to the previous year, it said greater investment was needed to tackle a more complex and demanding caseload.

SRA chief executive Paul Philip, who announced his retirement in February but is staying on for a transitional period while the SRA recruits his successor, said: “We are seeing a big increase in reports of misconduct coming through the door, as well as a range of large, complex cases such as our Post Office Horizon scandal investigations.”

While the SRA was investing in the capability to act faster and smarter, and strengthening efficiency gains through the use of data to spot problems earlier and take appropriate action where needed, Philip said the scale of new challenges means the SRA needs “extra resources to continue protecting the public effectively and proportionately”.

Feedback from the consultation will help determine practising fees for 2025/26, payable by solicitors and law firms.

The SRA component of an individual practising certificate (PC) fee would increase to £190 from £164, while individual contributions to the Compensation Fund would decrease to £70 from £90. This would lead to a total individual SRA-related fee of £260 – a 2.4% rise (£6).

Fee increases for firms are dependent on turnover. However, contributions to the Compensation Fund paid by firms would fall to £1,950 from £2,220. These contributions are split 50/50 between individuals and firms, following a consultation in 2023 which rejected a proposed 70/30 split in favour of individuals.

The proposed rise in fees comes against the background of criticism over the SRA’s handling of the collapse of Axiom Ince, which involved the alleged misappropriation of around £64m in client money. A review by the Legal Services Board (LSB) found the regulator had missed warning signs and failed to act effectively, triggering enforcement action against it.

A similar report by the LSB into the SRA’s oversight of SSB Group, which went into liquidation in 2023 with significant unresolved client liabilities, is expected to be published later this year.

Law Society CEO Ian Jeffery said: “The SRA faces multiple problems and as a result, must make significant changes to how it operates. The soon-to-be-published report into the SRA’s regulatory actions leading up to the collapse of SSB Group may also identify areas for reform.

“While some increase in the SRA’s share of the practising certificate fee is to be expected, such a significant increase at a time when firms are already facing rising costs must be fully explained and justified. The SRA needs to be completely transparent on how this money will be invested and the outcomes achieved.”

He concluded: “The SRA needs to ensure it focuses on its core job if it is to regain public confidence and the trust of the profession it regulates.”

The SRA’s proposed changes to its financial penalties regime have also proved controversial, attracting widespread opposition during a 2023 consultation. Proposals include linking fines more closely to income, expanding the criteria for when financial penalties can be applied and increasing transparency around decision-making. These plans remain under review, with further updates expected this year.