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Consultation on new arrangements for Professional Indemnity Insurance

05 May 2016

Consultation on new arrangements for Professional Indemnity Insurance

  • Proposal to move from a Master Policy Scheme to a Participating Insurers Agreement
  • Insurers to provide six year run-off cover at no cost to firms at time of closure
  • Help for firms transferring from regulation by the SRA to the CLC

The Council for Licensed Conveyancers has today published a consultation on new arrangements for Professional Indemnity Insurance (PII) for its regulated community. The consultation runs for two weeks, from Thursday, 5 May to Friday, 20 May

The proposals include a move away from the current master policy arrangement. It has been possible for a number of years for CLC-regulated entities to elect to be insured outside the master policy scheme, now the CLC is proposing a move to a completely open market with providers signing up to minimum terms and conditions set out in a Participating Insurers Agreement (PIA). This would simplify the insurance process for entities regulated by the CLC as they would only need to select a participating insurer rather than go through a process to opt-out of the master policy.

Another key change, reflected in the proposed new minimum terms and conditions, is the inclusion of run-off cover in the policy. Under this new arrangement, insurers will be obliged to provide six years of run-off cover for a firm which closes.  This run-off cover will be provided to firms at no additional cost at the time of closure. This removes a significant challenge of planning for firms and addresses a risk to consumers. The limit on claims in the six-year run-off period will be £2m in aggregate.  Past patterns of claims made since 2011 make it clear that this limit would be more than sufficient.  Brokers to the CLC Master Policy have confirmed that since 2011, the aggregate claims paid have not exceeded £100,000 per practice.

Finally, it will be easier for firms specialised in property law to transfer into regulation by the CLC. At the moment, SRA practices are required to purchase six years run-off cover at the point of leaving the SRA regime.  This often proves to be a major disincentive to exercising free choice of regulator. This may no longer be necessary if the SRA decides to waive the requirement for transferring firms, a possibility on which it is currently consulting. If the SRA retains its requirement, the CLC’s new scheme will increase flexibility for firms. 

Chief Executive of the CLC Sheila Kumar said: ‘The CLC’s proposed new arrangements for Professional Indemnity Insurance will bring improvements for consumers and lawyers in three main ways. PII arrangements will be more streamlined and so easier to manage for CLC practices, insurers and the CLC itself. They will improve protection for consumers and reduce the exposure of the Compensation Fund as run-off cover will be in place  for all closed practices. Finally, they will help to make a reality of the, currently largely theoretical, freedom for firms to choose the most appropriate regulator. The consultation period for these changes is short because we have already consulted the current insurers of Licensed Conveyancers and because we want consumers and firms to benefit from the new system with effect from this spring’s PII renewal round.’

Find out more and respond to the consultation 

CLC targets 20% fee rate cut for firms

23 March 2016

The Council for Licensed Conveyancers (CLC) has today published its Financial Statements for the year 2015 and announced that it plans to reduce regulatory fee rates for all firms by 20%, effective from November 2016.

Spoof email

17 March 2016

Circulation of malicious spoof email

Reporting on 2015, planning for the future

15 February 2016

The CLC has published its Annual Report on the year 2015 and its business plan for 2016 setting out as priorities three major strategic projects

  • New routes to qualification leading to licence as a CLC lawyer becoming available in 2016
  • Reviews of regulatory arrangements and financial protection arrangements under way
  • A review of regulatory fees ahead of licence renewal in October

Reform of the provision of education and training leading to licence as a CLC lawyer has been under way in collaboration with the regulated community for over a year. Autumn 2016 will see the launch of new apprenticeship, classroom and distance learning routes to qualification as a Licensed Conveyancer or CLC Probate Practitioner. The apprenticeships are part of the government’s Trailblazer programme and employers will have access to government funding to support their apprentices.

The CLC’s rule book is closely tailored to the provision of specialist conveyancing and probate services. The CLC is nonetheless beginning reviews of its Code of Conduct and financial protection arrangements. These two reviews will take account of changes in the market and best practice in regulation since the last review undertaken by the CLC. As well as maintaining high standards of consumer protection for which the CLC regime is known, the review will also aim to extend support for innovation and competition in the legal services market.

Legal Services Board research published in March 2015 showed thatirms regulated by the CLC view regulatory fees as value for money (81% of respondents).  Nonetheless, 2016 will also see a review of the regulatory fees framework on the back of reductions in staff numbers and streamlining of CLC activity in 2015.

Chief Executive of the CLC Sheila Kumar said: ‘2015 was a year of major change for the CLC as we streamlined our activity and staffing and moved to smaller, more suitable premises. Now we are turning to make sure that our rule book, PII arrangements and Compensation Fund fit current market conditions, consumer protection needs and contemporary best practice in regulation. This will ensure we are providing the best possible service to consumers and fostering innovation and competition for progressive providers of conveyancing and probate services.’

Chair of the CLC Dame Janet Paraskeva said: ‘2016 will see us continuing to focus on the core objective of exploring to the full the benefits of specialist regulation of specialist property law services providers. Specialisation delivers high standards of consumer protection in conveyancing and probate, the two most widely used legal services. I have been told repeatedly since taking up the role of Chair of the CLC that those we regulate value our supportive approach that helps them comply with regulation to protect the consumer and develop thriving businesses. The CLC’s approach is unique in the sector, reflecting its original and ongoing mission to promote innovation and competition while protecting the consumer.’ 

Legal Services Market Study: CLC response to statement of scope

03 February 2016

The CLC has published its response to the statement of scope set out by the Competition and Markets Authority for their proposed market study of legal services. 

CLC reacts to Chancellor's Announcements on Legal Services

30 November 2015

The Chancellor announced today that in 2016 the Treasury will be consulting on

  • Removing barriers to entry for Alternative Business Structures
  • Making legal services regulators independent from their representative bodies and
  • Injecting innovation into the process of home buying

Responding to the announcements Sheila Kumar, Chief Executive of the Council for Licensed Conveyancers said: 'Simplifying the regime around Alternative Business Structures is a good modernising measure. We have seen that fears raised at the time of the Legal Services Act that they would erode ethical standards in the provision of legal services were wholly unfounded. As expected though, ABS firms are innovative and are finding new ways to deliver high quality services. As the first legal services regulator to licence an ABS, and having regulated similar structures prior to LSA 2007, we welcome the Chancellor’s announcement and indeed we have already been working to simplify our own approach to licensing of ABS and traditional firms.'

'We are also pleased that there is to be consultation on making regulators independent of representative bodies. We have pressed for this to be an area of focus for some time because it will speed realisation of the benefits promised by the Act and bring improvements for consumers and those running legal services businesses.

'We also look forward to taking part in work to foster innovation in the home buying process in any way that we can as the specialist regulator of conveyancing services.'

 

Details of today's announcements by the Treasury 

Press release 

Command Paper 

 

Dame Janet Paraskeva sparks debate on PII, Lenders Panels and calls for genuine choice of regulator

19 November 2015

  • PII and run-off requirements seen to be inhibiting firms’ choice of regulator
  • Lenders panels could be anti-competitive and a barrier to market access
  • Incomplete separation of representative and regulatory bodies muddying regulation

Dame Janet Paraskeva, the new Chair of the specialist property law regulator, the Council for Licensed Conveyancers (CLC), highlighted some strategic challenges for regulators of legal services when she spoke on Wednesday 18th November at the annual conference of the Society of Licensed Conveyancers.

Dame Janet called for the full implementation of the Legal Services Act 2007 to afford law firms a genuine free choice of the regulator best suited to the long-term development of their businesses, citing the current operation of professional indemnity insurance as a barrier to that free choice. She also called for the complete separation of representation and regulation in the legal sector to ensure clarity and transparency in regulation.

Dame Janet promised that the CLC’s 2016 review of all of its regulatory arrangements would examine every aspect of the CLC’s approach, from the code of conduct to the Compensation Fund. The objective of that will be to ensure that the CLC can continue to support innovation and growth in the legal sector for the benefit of the consumer and to support the growth of thriving legal businesses.

Dame Janet said: “After nearly ten years away from the legal sector I was surprised to find how little had apparently changed and how the freedoms promised by the Legal Services Act have yet to be fully explored and exploited by law firms to find new ways to meet consumer expectation and fuel growth of legal businesses. While there is a clear will now, it seems that front line regulators in the legal sector have not been able to cooperate to the degree necessary to ensure the proper functioning of the market. We are also looking to work with financial services regulators and the Competition and Markets Authority.”  

Sheila Kumar, Chief Executive of the CLC said: “The regular review of the CLC’s Handbook and financial protection arrangements taking place in 2016 will be thorough and fundamental. As well as ensuring effective consumer protection in a contemporary context, the reforms we make will aim to continue our mission to foster innovation and competition in the provision of conveyancing and probate services. It will take forward our work over the past three years in which we have made major changes to our structures and processes to deliver our work more efficiently and in ways that take into account the changing legal services market and the business models of CLC regulated firms. The 2016 review is the next step in delivering the CLC’s strategy to exploit to the full the benefits of specialised, activity-based regulation of specialist property law services which provides an alternative and contemporary model of regulation.”

Deadline passed for Licence Renewal

01 November 2015

The new licence year has begun in November 1st, 2015. 

 

 

Changes in CLC Education

06 October 2015

Council for Licensed Conveyancers and Scottish Qualifications Authority announce strategic partnership in legal education

The Council for Licensed Conveyancers (CLC), the specialist property law regulator, and the Scottish Qualifications Authority (SQA), an Ofqual recognised awarding body, have today announced a partnership for the delivery of a suite of qualifications, enabling those who achieve them to be licensed as a CLC lawyer specialising in conveyancing or probate in England and Wales.

Now that the partnership has been agreed, CLC and SQA are working together on the transitional arrangements, which will see SQA develop, assess and quality assure the qualifications to industry standards, with CLC's expertise and guidance. There will be announcements early in the new year about the new arrangements and how these will affect students.

Students currently taking the qualifications should continue with them and work towards their exams. The qualifications will continue to be valid under the new arrangements.

Sheila Kumar, Chief Executive of the CLC said: “We are delighted to be working with SQA in this exciting partnership that will open new routes to qualifications as a CLC lawyer and help to ensure that the pipeline of qualified conveyancers and probate practitioners continues to grow to meet demand in the market place. It will bring a much improved student experience through the use of the most up to date educational tools and approaches developed by a range of providers and give students even greater flexibility. Importantly, the CLC will work with SQA to assure the high standards of these specialist qualifications for which the profession is known. Current students can take comfort that their achievements will all be valid under the new arrangements and they should carry on with their current courses. We will be announcing transition arrangements next year.”

Dr Janet Brown, Chief Executive of SQA said: "We look forward to working with CLC to deliver a suite of qualifications for the conveyancing and probate sectors of the legal profession. SQA is committed to helping people to realise their potential and to achieve their ambitions by providing a wide range of high quality, recognised qualifications and associated services. We work with employers and industry to ensure that SQA qualifications accurately reflect learners’ knowledge and skills and provide routes to jobs or further study as well as enable organisations to succeed in meeting a wide range of educational and workforce development challenges."

New Guidance: Alternative Dispute Resolution for Complaints

16 September 2015

The CLC has issued guidance and draft amendments to the Complaints Code to help CLC Lawyers to comply with the requirements of the EU Directive on Alternative Dispute Resolution. 

Find out more