I am looking to find a registrar based in the UK, for the simple reason that if there is a dispute between myself and the foreign registrar, it wouldnt be easy for me to take legal action.
Im slightly worried that a couple of my domain names are mildly offensive (not in any true sense of the word, not pornographic or threatening), but if a complaint was made to my registrar, could they simply close my account and refuse me access to my other domains?
There are plenty of UK-based registrars for .uk domains.
There are plenty of UK-based resellers for GTLD domains but very few registrars... and the few registrars that do exist mostly cater to the corporate market and charge accordingly.
I decided to move my GTLD domains to a UK-based registrars some years for exactly the reasons mentioned by the OP - i.e., I wanted to deal with someone in my own jurisdiction whom I can, should things go wrong, sue via my local County Court or report to UK Trading Standards.
They are more expensive than most US-based registrars but not significantly so (especially when compared with the likes of Netnames), and in the two-and-a-bit years that I have dealt with them I have never had any serious issues with them. Any support tickets have always been responded to quickly, courteously and professionally, and the people I've dealt with all seemed to be very knowledgeable about the industry.