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Earlier this month the CLC took part in a consultation event hosted by the Institute of Chartered Accountants in England and Wales (ICAEW) looking at changes to the principles and standards for tax planning set out in the PCRT code in the accountancy sector.

Whilst CLC lawyers are not authorised to provide tax advice and are not bound by the PCRT, the discussions were nevertheless a useful opportunity to reflect on the importance of ethical conduct at the intersection of conveyancing and probate services with broader tax, inheritance and estate planning advice. 

In this context, it is inevitable that some clients will require specialist tax advice.  When these circumstances arise, Outcome 3.4 of the revised CLC Code of Conduct requires you to refer clients to ‘appropriately qualified professionals for advice outside of your areas of expertise’  and Outcome 2.7 requires that you ‘only recommend a particular person, business or product when it is in the best interests of the client’. 

Should you recommend a particular person or business, or indeed any particular product, by Outcome 2.4 of the Code of Conduct, you are required to ensure that your ‘Clients are aware of any limitation or any condition resulting from your relationship with another party’,  this would include circumstances in which you or your practice is paid a referral fee or receives an incentive for referring your clients to that person or business.

More broadly, Ethical Principle 1 requires CLC lawyers to ‘act with integrity, honest and independence’  and to ensure they do not conduct themselves ‘in a manner which may result in a breach of the law nor in any other manner which may bring the profession into disrepute’.    If you or your practice needs support in understanding these requirements and what they mean in practice, we encourage you to contact your dedicated Regulatory Supervision Manager or Officer. 

The Legal Sector Affinity Group (LSAG), which is comprised of all of the AML regulators in the UK including the CLC, the SRA and the Law Society of Scotland, has today released updated guidance for the legal sector.

This guidance is HM Treasury approved, and we encourage CLC practices to review the changes (which are summarised in the Schedule of Amendments section) and make any necessary alterations to their own AML policies and procedures.

Some of the key changes practices should take note of include:

 a.           Updated information relating to the payment of the Economic Crime Levy (ECL) which must be paid to HMRC if your turnover exceeds the threshold amount of £10.2 million. We would urge CLC practices to review their own turnovers and consider whether they have met the threshold or not.

b.            A new definition of high risk third countries (HRTCs) in line with the “grey” and “black” lists which are maintained by the Financial Action Task Force (FATF) and which are updated at regular meetings throughout the year.

c.            Updated content relating to the obligations under Regulation 28(3A) relating to what measures practices must take when assessing the “ownership and control structure” of the legal person, trust, company, foundation or similar legal arrangement (non-natural persons). The key point is that this obligation is wider than just identifying the beneficial owners.

d.            A new subsection on the Register of Overseas Entities – this includes basic information on what the obligations are for overseas entities who intend to buy, sell or transfer property or land in the UK (they must now register with Companies House).

e.            Clarification of the extent of due diligence on third parties who are contributing funds towards a transaction. The CLC would expect that such third party’s funds are scrutinised in the same way as a client would be with the extent of measures taken increasing with the risk level.

f.             Content relating to the treatment of Politically Exposed Persons (PEPs) which takes into account changes in 2024 which lessen the risk level in relation to domestic PEPs when compared with non-domestic PEPs.

g.            Updated content relating to the Economic Crime and Corporate Transparency Act (ECCTA) which introduced, as an example, some additional defences to principal money laundering offences.

See our Anti-Money Laundering Toolkit

The CLC has received some intelligence that fraud and/or money laundering operations that were operating in Liverpool and Manchester prior to 2018 may be active again.

A hallmark of these operations is the use of “vendor gifted deposits”. Such deposits can take a few forms, but they may be comprised of “loans” on completion from the vendor which are intended to be immediately repaid.

Another kind we have been alerted to are “vender invoices” which are to be paid on completion. Such types of vendor deposit could be aimed at committing mortgage fraud and/or tax fraud as it pertains to stamp duty land tax (SDLT).

If any CLC practice comes across such types of vendor deposit you must ensure that the transaction is scrutinised carefully and that the source of funds is examined just as carefully, with appropriate records retained on file.

If a practice holds any suspicions about any such activity, you should consider making an intelligence Suspicious Activity Report (SAR) to the National Crime Agency (NCA) and reviewing whether it is appropriate to act for that client.

The CLC would also welcome any intelligence on similar schemes; practices can email our dedicated AML inbox at: aml@clc-uk.org.

Webinar: Tuesday, 20th May, 11am-Noon

Join Sally Holdway of Teal Legal and Stephen Ward of the CLC to look at the latest developments in relation to the material information requirements for marketing properties. What difference are they making and what are the opportunities for conveyancers to improve the service they offer clients? 

Register now

Switching regulators is something many firms consider but often shy away from. It can be perceived as being difficult and lengthy and firms worry about continuation of service for their clients and from their insurer.

One firm who has made the switch, eight years ago as a trailblazer, is Nottinghamshire’s Fidler & Pepper. We spoke to one of the firm’s directors, and chief technology officer, Mark Slade, about why switching regulators was one of the best moves the firm has made.

“I qualified as a solicitor in 1989 with Fidler & Pepper and soon specialised in conveyancing. Unusually, the firm had a client management system (CMS), which back then in 1989 seemed very forward thinking. It intrigued me and it just so happened that the head of one of the conveyancing teams left soon after I joined, a replacement was needed, and so after a chat with the managing partner I took up a role in conveyancing. That was the start of me becoming more and more involved in the tech side of things and where I found out that I was a coder at heart! I learnt how to customise the CMS, and that was my path through the next two decades.  

“I became managing partner in 2004 and then we converted to a limited company in 2014. I stepped down as CEO last year and am now the CTO. My brother has filled my shoes, as our current CEO.

“When I did day to day conveyancing, I enjoyed letting people know that they would have the house of their dreams, prior to that I’d done some work in matrimonial law, where, generally speaking, none of your clients are happy so it was refreshing to come to conveyancing where clients were more likely to be upbeat and excited.

“The role of the conveyancer has changed significantly over the last 20 years though, which has placed more pressure on conveyancing firms. Firstly, conveyancing takes longer than anyone wants it to, clients and conveyancers alike. Secondly, the considerable expansion in terms of increased checks, such as AML. When I first started out there weren’t even environmental checks, now the role is very different. And this is where I am passionate about supporting staff and clients. I enjoy putting systems in place that give a better service and make life easier for all to have a better experience of the conveyancing process.

“These days, you have to understand how important it is to keep evolving your business to meet changing needs. As a business, we do fairly high volumes in terms of transactional and remortgage work. Saving a minute here and there is valuable to us and it adds up. My role is to support our staff, by looking at our processes – seeing what we can do to improve efficiency such as integrating with a third party or digitising the forms we use.

“Similarly, like all good businesses we keep everything under review and that includes regulation. In 2018 we decided that our existing regulation – under the SRA – wasn’t working for us, we felt unsupported and so we made the decision to move into CLC regulation.

“In terms of the process of switching, the actual move was painless. We had been worried about being maintained on lenders panels, which I think is a common misconception, and what a lot of people panic about, but in reality it wasn’t a problem at all. We spoke to the lenders in advance, explained the reasoning behind the change and thereafter it was seamless. It helps that you are able to cover most of the lenders by dealing with LMS, Lender Exchange or Smoove – who each manage their own panels. Our bank kept us with the same client account so there weren’t any issues there either. As long as you approach these things methodically, most lenders these days don’t panic or treat you with suspicion, as a number of firms have previously switched. “

“We did find that our insurance premiums increased, but this coincided with us having grown substantially. For the immediate period after the conversion you might have to get run-off insurance for your work under your previous regulator, for us that meant that initially some of the CLC policies weren’t open to us, but once that run-off period had expired it was a lot easier. It can be worth seeing if you can place that run-off risk on its own so you are then shopping for a ‘vanilla’ CLC policy for your ongoing work. Our insurance premiums are now at a level we would expect, and we have an excellent relationship with our insurers. “

“I would absolutely recommend other firms to make the switch into CLC regulation. They are a sensible and proportionate regulator. If you’re doing something wrong, you’ll get pulled up and they’ll work with you to explain and ensure you correct the issue. It’s been highly collaborative and not in the least bit adversarial – a very common sense approach, which is in stark contrast to what we previously experienced. “

“I suppose that it helps that they’re not trying to regulate firms of hugely varying sectors and risk profiles. CLC is solely conveyancers and probate practitioners, and they’re set up for that. We’ve found it incredibly valuable to have a specialist regulator.”

Over a half of conveyancers (55%) are confident in the current stability of the property market, but report little sign of the process speeding up.

The results form part of a new quarterly Confidence Tracker launched by the Council for Licensed Conveyancers (CLC) to gauge the views of the profession on the current state of home buying and selling market.

A third of conveyancers were neutral in their response regarding current market stability and just 12% reported a lack of confidence.

Most transactions (84%) are taking either three or four months to complete from acceptance of an offer to completion.

Just 17% of respondents report seeing improvements in the conveyancing process, indicating that industry wide efforts to reap the benefits of new processes and IT need to be redoubled.

Conveyancers report little convergence amongst buyers and sellers in their confidence levels, with less than a third of buyers (29%) and sellers (28%) showing any positivity about current property market conditions.

The Confidence Tracker was launched by the CLC to track the views of the profession on the current state of home buying and selling. The tracker will become a regular temperature check of those working in conveyancing, monitoring the sentiment and expectations of conveyancers to provide an insight into the health of the industry.

The CLC’s head of strategy and external relations, Stephen Ward, says: “It’s good to see that confidence levels are high. But 2025 holds a lot in store for the property market. Next month’s stamp duty land tax (SDLT) changes will undoubtedly have an impact. We also expect to see interest rates continue to gradually trend downwards.

“The introduction of material information aims to improve transparency and reduce delays caused by unexpected revelations late in the transaction and it should really start to have an impact in 2025. It will be valuable to see how all of this is reflected in the future editions of this survey, especially with the government’s recent commitment to working with the industry to reform the property transfer process.”

The CLC has been made aware of attempts by some conveyancers representing buyers to amend agreed conditions of sale so that, in the event that a transaction does not complete by 31st March, either:

The CLC urges conveyancers to exercise extreme caution before agreeing changes to the standard conditions of sale. If parties are content to amend those, conveyancers must have a permanent record of consent to the amendments that clearly demonstrates that the clients have understood the impact of those changes in the relevant scenarios. 

Such attempted amendments may indicate that the buyer has not been properly advised of the potential impact on them of the 1 April increase to the SDLT threshold. We remind conveyancers of the need to ensure that buyers understand that their transaction cannot be guaranteed to complete ahead of such tax changes.

Our Advisory Note on the risks arising from SDLT holidays sets out the issues for conveyancers.

You might also be interested in this recent guidance from the Legal Ombudsman in relation to complaints handling around the SDLT threshold.

Since publishing our response to the 2022 Public Consultation on principles of CPD proposals and undertaking additional workshops in 2023, we have developed a new Ongoing Competence Code which incorporates those high-level principles and feedback received. This proposed Code is intended to replace the current CPD Code and CPD Framework. 
 
We want to ensure that our proposals are easy to understand, feasible, and that you have the opportunity to discuss any unforeseen impacts of our proposals that you think have not yet been considered but need to be.

Find out more and have your say


The CLC has today announced that Datalaw is now one of the providers of education leading to CLC qualifications.

The provider of distance learning has joined others that offer CLC qualifications, which are regulated by the SQA.

Licensed Conveyancers regulated by the CLC are Authorised Persons in terms of the Legal Services Act 2007, and on a par with, for example, solicitors within their area of specialisation. The Level 6 qualification is available through Datalaw as an apprenticeship, meaning that there is government funding for employers. Datalaw will help employers access that funding, which can cover as much as 100% of the costs.

Similar funding is also available for the level 4 course that leads to registration as a Conveyancing Technician.

Director of Authorisations at the CLC, Claire Richardson said: ‘These apprenticeships have recently been refreshed and updated by conveyancing practitioners working with education providers and the CLC. We are delighted that Datalaw is now offering these apprenticeships because they are a great way to begin a rewarding legal career and for employers to increase the skills of their workforce.’

Details of the Datalaw apprenticeships are available here:

Level 4 Conveyancing Technician

Level 6 Licensed Conveyancer

The full list of providers of CLC qualifications is here: https://www.clc-uk.org/trainees/how-to-enrol/

The independent Adjudication Panel of the Council for Licensed Conveyancers has today announced its next Chair.

Nick Hawkins will take up the role with effect from 24th March, when current Chair, Victoria Goodfellow, steps down to take on a judicial role.

Mr Hawkins is a barrister by profession, with a background of a long and distinguished career in the Royal Navy, including over ten years prosecuting, defending and sitting as a Judge Advocate in Courts Martial.  He then spent 15 years as a Chief Crown Prosecutor in the Crown Prosecution Service, a year in the Independent Police Complaints Commission and two years as Chief Executive of the Legal Ombudsman. 

Mr Hawkins has until recently sat as a Legally Qualified Chair on Police Misconduct Hearings for several Police Authorities, currently sits as a lay chair of the Regulatory Tribunal of the Royal Institution of Chartered Surveyors and is a member of the Investigation and Conduct Committees for the Chartered Institute of Management Accountants.  He is also a member of the British Transport Police Authority, as well as undertaking some criminal justice consultancy in the UK and overseas, and advising on university misconduct investigations and hearings.

Announcing the appointment, outgoing Chair Victoria Goodfellow said: “After nearly six years in the role, I am delighted that we have been able to secure someone with the skills and experience that Nick has to take forward the vital work of the Panel as the independent disciplinary tribunal of the CLC. It is important and challenging work, and I wish Nick and the rest of the Panel the best for the coming years.

Incoming Chair of the Adjudication Panel Nick Hawkins said: “It is a real honour to take over from Victoria Goodfellow as Chair of the Adjudication Panel and I am looking forward to meeting colleagues am keen to start work.”

Individuals and practices need to keep the CLC updated on changes to circumstances. To make that easier, we have added some online forms to our website

For CLC Lawyers:

For CLC Regulated Practices:

Following the success of the training sessions for CLC lawyers by HM Land Registry in January, we have two more sessions coming. They are bite-sized one-hour sessions online. They will be most useful for anyone who did not take part before.

You will find it most useful to attend both sessions, but you will need to register for each one separately, using the links below.  

Tuesday 8th April 10 – 11 a.m

Wednesday 9th April 10-11 a.m  

You can test your title application skills with this short quiz.

The LSB has today launched a consultation on a draft Policy Statement setting out principles for legal services regulators in relation to securing adherence to professional ethics.

The CLC is pleased to have been involved in the LSB’s work to develop these proposals through the Professional Ethics and Rule of Law project.

The CLC puts ethics at the heart of the standards it sets as well as its approach to monitoring and enforcing compliance.

The CLC’s revised ethical principles came into force this January. They are the foundational element of the Code of Conduct that applies to all CLC-regulated lawyers and practices, and, vitally, they are also the starting point for the national professional qualifications that lead to license as a CLC lawyer.

We look forward to reviewing the LSB’s proposals and encourage CLC lawyers to respond to the consultation too.

A key tenet of the Legal Services Act 2007 – as reflected in one of the core regulatory principles – is that the legal market operates in the interests of consumers. This may appear obvious but at times there have been justified complaints that it may seem to operate more in favour of lawyers in some parts of the sector. It is vital that the consumer voice is heard in the regulation of legal services and demonstrably so.

It is why the Act created the Legal Services Consumer Panel to advise the Legal Services Board, and also why the CLC has established its own Consumer Reference Group.

The CLC has been running annual industry roundtables for some years, and in 2024 held its first futures roundtable, hearing from the next generation of licensed conveyancers. So it was high time to have a consumer roundtable.

Teresa Perchard, who chairs the CLC’s Consumer Reference Group, began by highlighting the most recent survey by the Legal Services Consumer Panel, which recorded high levels of satisfaction with legal services generally, and among consumers who had used CLC‑regulated firms even higher.

While this was “reassuring”, she noted recent HomeOwners Alliance research showing that, while people may be happy with the outcome, they were less pleased with the process that got them there. The complaints will be familiar to any conveyancer, starting with speed (or lack of it), followed by poor communication and lack of explanations.

Rob Hailstone, founder of the Bold Legal Group, acknowledged that conveyancers were “seen as the ringmasters”, which meant they were often blamed for everything that goes wrong or every delay that hinders progress, irrespective of whether it was actually their fault.

Paula Higgins, founder and chief executive of the HomeOwners Alliance, suggested complaints were less about speed and more about certainty. “People do not really care about conveyancing. They just want to buy and sell houses and that is it. They are quite shocked at how protracted the procedures are when they only go and buy and sell every once in a while.”

Noel Hunter, chair of the Consumer Code for Homebuilders, agreed that consumers “very much feel they are being done to as opposed to doing. This is the largest purchase of a lifetime and access to appropriate information at the time of purchase would help to give more control to the buyer”.

Of course, as Rob Hailstone explained, this reflected in part how the role of the conveyancer has changed in recent years, having to carry out so many more tasks than they once did. “Also, are we dealing with two different types of client? There are the more mature clients, who may expect a more patient, slower service, and the 21st century client, the Amazon buyers, the TikTok generation, who just want it carried out speedily and they do not really want to know how that is done. They just want it done as quickly as possible.”

For Emma Toms, chief executive of the New Homes Quality Board, consumers do not understand the value of conveyancing either and it would be helpful if this was better explained, especially given that – as Paula Higgins said – they are often the bearer of bad news. “In a way, showing what disaster has been avoided could be quite useful to explain,” she said. A further problem, though, was that where something does go wrong, “it is very hard to figure out who to go to, who to blame, who to go to for compensation, who can get things put right. You have so many different codes and ombudsmen”.

Noel Hunter said a single definitive information portal for consumers would make a lot of sense. “If we all worked together, we might get there.”

Paul Crook, a member of the Legal Services Consumer Panel, said he was hearing “a lot of solutioning without knowing whether consumers will value it”. Do consumers, who may only move house two or three times in their lives, actually want to be educated? “Why should they invest their time in learning about something that can seem complex, hard to navigate and where often the language is difficult to understand?”

He argued that what was missing was behavioural research to understand the motivations and interests of consumers.

There are other solutions to ease and speed the process. Teresa Perchard talked about the Scottish system, where sellers cannot put their property on the market without a home report, “which has a very rudimentary condition rating of all the elements, but it also has an estimate of the value”.

Scotland has more information upfront, and a less complex conveyancing process, as well as little leasehold. Plus many solicitors become involved earlier because they are also running the estate agency – solicitor property selling is a major feature of the market north of the border.

Charlotte Local, legal director of leading CLC-regulated firm Enact, said: “There have been many valiant efforts to try and get more done upfront, but I think we have about 4,000 firms that practise conveyancing in this country, and trying to get them all aligned and doing the same thing is not easy.”

Often there has been “a lot of pain before people even get to us”, she continued. “The process of getting an offer accepted on that and finding somewhere to buy can be really challenging. They get to us, and they are already on edge, and then you have to break it to them that they are going to need their lease extending or whatever it might be.

“They ask how long it will take and we say ‘How long is a piece of string?’. It is anything from 12 to 20 weeks, or by the way, it might be longer now. You can imagine how that message goes down, although it is always better to be as upfront as you possibly can.”

Rob Hailstone added: “Of course, most clients do not realise that a conveyancer often has two clients at the same time – the lay client and the lender as well. While your client might say, ‘Fine, do not worry about the extension being knocked down, I am happy with that’, the lender may not be happy with it.”

Charlotte Local agreed. “The lender dynamic is something that consumers could do with being educated on.”

The main complaint of conveyancers today, added Rob Hailstone, was the number of interruptions through the day, in terms of phone calls, emails, etc. “The second one is the number of additional enquiries that are now being raised by some firms. The third one is probably the delay with managing agents and getting the leasehold pack from them.”

What else could be done? Another feature of the Scottish system is locking the parties in earlier. Reservation agreements have been mooted down south but not taken off. Stephen Ward, the CLC’s director of strategy and communications, said he had been told that, where a reservation agreement is entered into in England and Wales, the fall-through rate is very small, something like 6%.

“It certainly removes from the market the toe-dippers and the time wasters. Everybody is then clearly committed. That is something that perhaps we should look at collectively as an industry and as regulators.”

Rob Hailstone said what is now the Home Buying and Selling Council looked at them a while ago but could not get consensus on one standard reservation agreement. “Different clients have different ideas and timescales, etc. Then you give the agreement to your lawyer and they say, ‘This is not for you because of this, this and this’, and start negotiating. It is very difficult.”

Paula Higgins is an advocate of reservation agreements “but I think it probably has to be regulated, where both sides put in £1,000 each and you lose it if you pull out”.

It would undoubtedly not be popular with some consumers, although she noted that people already put down money to reserve a new home, “One of our most popular products at the moment is home buyer’s protection insurance for transactions falling through.”

Noel Hunter reckoned reservation agreements could be considered as part of the regulation of estate agents, which is being examined by the government at the moment.

The bigger change is upfront information, which is arguably top of the current reform agenda. Everyone agrees that this is a good thing, so how to achieve the market shift where consumers will accept having to do it?

It is about getting the agents to buy in, said Rob Hailstone. “I do not think the consumer would worry too much if it was sold to them in the right way. It might cost you £150 to £200 upfront to instruct your conveyancer, but they would do this, this, and this, and then, when you find a buyer you hit the ground running. You can save two or three weeks or even more.

“But the agents are nervous about recommending that kind of process to their seller client in case they say, ‘We are going to the agent down the road because he is not saying I have to pay £150 or £200 upfront’.”

Charlotte Local saw home information packs as a good starting point, although she felt they needed more in them. “I don’t understand how people can say they wouldn’t save time. If you have information on day one that you would not have until day 21, how can that not save time?” Searches may go out of date but they can be refreshed or insured.

“I never understood why the HIPs were so controversial,” agreed Teresa Perchard. “The sky was not going to fall in. It was just about bringing forward information that should have already existed.”

For all that many of the moving parts in the home-buying process are not the conveyancers’ fault when they seize up, the profession cannot be absolved of all blame, acknowledged Charlotte Local.

“Cases do turn over so much slower now that conveyancers feel like they need to have a bigger caseload to get the same amount of income. Do you then end up in a vicious cycle where you cannot pay enough attention to the cases? And you are having to do more on the cases too.”

While large operations like Enact do some things quicker than smaller practices, often through the use of technology, “there is only so far that you can take it”, she continued. “I am not convinced that anybody can get particular gains on anybody else because you are always reliant on the next firm.” This might breed apathy among some firms, who are resigned to the fact that transactions are taking longer.

“In my ideal world, you would have your Land Registry title number and then next to that you have everything else that you need. It is just all there ready for you to take away.”

Charlotte, like Paula Higgins, argued that ultimately the only way to drive forward such a fragmented industry would be to make changes like upfront information mandatory.

The CLC is among the members of the Digital Property Market Steering Group, a Land Registry-convened group of key regulators and representative bodies looking at how to remove the barriers to progress. Stephen Ward said it remains reluctant to madate market change, such as dictating tools that should be used.

The market arguably needs to start moving first before mandation can come in to drive it home. For example, the pandemic massively accelerated the take-up of digital ID, leaving “a little rump of firms that are still using old methods”, he explained. “But I think we are now in a situation where we could say to those firms, ‘That is no longer an option for you. Serving your client correctly means that you have to do it this way now, and there are solutions in the marketplace for you to choose from’.”

The bigger challenge is digitising the data, he went on. There was a strong ‘invest to save’ argument for it but with property data held “all over the place”, it would be an expensive process, even with the rapid development of large language models of artificial intelligence to help with the heavy lifting. “The big win in digitisation is that Charlotte’s ideal world, where all the conveyancing data is available to the lawyer at the beginning of the transaction, becomes a reality. The conveyancer can look at that and then spend their time advising the consumer, having understood what the buyer really wants out of this transaction. You can highlight the things that really matter to them and engage them fully on those points.”

Rob Hailstone cautioned that it was “a small rump of firms pushing back against digitisation”, lawyers who feel it “takes away the skill, the knowledge from the job. It possibly threatens their job in the future. They distrust technology, a lot of them”. He has some sympathy, thinking back to the way conveyancing was carried out in the 1970s and 1980s, “when I would sit my client down, go through a few papers and say, ‘There is this problem, that problem, but I personally would not worry about it. I would buy this property myself’, and they would simply say, ‘That is good enough for me then. Thank you’. There was nothing in writing, and no one ever came back and complained that something went wrong. But, and I fully appreciate this, you cannot do that now.”

For Stephen Ward, this was exactly the point – digitisation actually put the conveyancer back into “the trusted advisor position, rather than de‑skilling”. He said: “AI, whether next year or in five years’ time, is going to be doing all of this, all of the data collection and sorting and even the flagging of some of the key points. This will free up the conveyancer to bring their skill and experience to bear on the work done by the machine, really understand the client’s needs, and give the appropriate advice on that basis with empathy.”

Charlotte Local agreed that this fear of dumbing down the conveyancer’s role, or even making it obsolete, was misplaced “when you consider all of the elements that a conveyancer has to do”. She added that “title insurance probably does have more of a place in this as well. There are certain risks that you can insure”.

“We do some work solely for lenders and they take out title insurance policies that mean that we do not have to check X, Y and Z. This is a risk-based decision they make, saying ‘This probably will not come up in the vast majority of transactions, so we are just going to insure it and move on and save the cost and time of you having to check that on our behalf’.”

For Paul Crook, indicators that show which firms provide a good or bad service, plus price transparency, were important information for consumers and produce “a dynamic that can potentially drive up profitability for the best firms”.

Stephen Ward outlined research on quality indicators that the CLC, Solicitors Regulation Authority and CILEX Regulation published in 2023, which found consumers wanted online reviews, “because they can understand that, and they assume that the reviewers value the same things that they do in the service”. That is not about quality of the advice, of course. Land Registry data about how many mistakes firms make in applications, or their disciplinary record could point to that. “But that is perhaps less useful, because that tends to focus on very serious infringements rather than things that might affect consumer experience more on a more day‑to‑day basis, or complaints that make it to the Legal Ombudsman, the second-tier complaints, as we call them.

“Then the issue with second-tier complaints is that the numbers are quite small if you look at numbers of complaints per conveyancing transaction. How reflective is it? Is it really a proxy for quality?”

And, of course, a good number of home buyers will simply go along with their estate agent’s recommendation anyway, even with the likes of the HomeOwners Alliance and the regulators urging them to shop around.

“We need a shocking advert on TV where you see a bulldozer going through an extension. ‘Bloggs & Co did not pick up this, choose your conveyancer carefully’,” said Rob Hailstone.

Stephen Ward said the problem was that “you have a very, very short window in which to address the purchaser of these legal services, and it is approximately between telling the estate agent, ‘Yes, I am going to buy that’, and the estate agent saying, ‘Here is my recommendation’. So really a very few minutes”.

Rob Hailstone harked back to a time when estate agents and conveyancers worked together better. “In the days before everything was online, you would meet your estate agent regularly. They would come into your office. You would go to their office. They were there to help you, not hinder you. Now it is more that they are seen to be there to hinder you. They pick up the phone or they email 10 times a day, but they do not offer any help. That relationship could be enhanced if the two professions worked more closely together.”

It is, after all, in everyone’s interests to speed up transaction times but Paula Higgins said some agents were more motivated by the referral fee – and by the time the conveyancer discloses that they have paid one, it is effectively too late.

Teresa Perchard commended the proposal in the new homes quality code for earlier disclosure of any referral fee. This reflected the greater pressure for disclosure seen in other areas too – most recently a major Court of Appeal ruling over car finance commissions – “and perhaps then it should also be an expected norm for estate agents”.

One final point was about the need for more information about the chains people are in. This was another area where the structure of the conveyancing market mitigated against the uniform approach that would be needed to achieve this, said Charlotte Local. Try telling small high street firms that they have to build an API to interface with a portal that tracks a chain.

Could the Land Registry’s once trumpeted chain matrix come back to save us? Said Rob Hailstone: “It must be possible. If we can build a rocket to go to Mars, surely we can build a chain matrix?”

The international Financial Action Task Force (FATF) met from 19 – 21 February 2025 and made changes to the countries which are on the “grey list” (those subject to increased monitoring):

There are more details on the FATF website.

Remember that the UK list of high risk countries (HRTC) now mirrors the FATF lists so CLC practices need to ensure that Enhanced Due Diligence (EDD) is applied when a client is “established” in a HRTC which means for an individual being resident in that country (not just having been born there) and for a company/legal person that means being incorporated in or having its principal place of business in that country. These lists also relate only to AML and not to sanctions (they are two separate and distinct regimes).

View the CLC’s AML Toolkit

IMPORTANT MONEY LAUNDERING RISK UPDATE FOR MLROs

We are alerting you to an increased risk of potential money laundering connected with former members of the Sheikh Hasina government of Bangladesh.

In August 2024 Sheikh Hasina, the former Prime Minister of Bangladesh, was deposed after mass protests. Key figures from her former regime are now under criminal investigation relating to the siphoning of money out of the country despite the existence of strict currency controls in Bangladesh[1]It has been estimated that between 2009 and 2023, $234 billion was improperly transferred out of Bangladesh to benefit regime insiders.

A recent report by Transparency International UK and several other agencies and organisations, has highlighted a significant risk that former members of this regime will seek to hide and move assets through the acquisition of UK properties. Research has already indicated that the UK has been a key destination country for suspicious funds from Bangladesh with many regime insiders making the UK a second home.

According to reporting in the Guardian[2], a small group of regime insiders already own £400 million worth of UK property which reportedly ranges from high-end luxury property in London to lower value new-build properties across the country (with some being used for the generation of rental income). Many of these property purchases were part-financed by lenders in the UK, Singapore and Switzerland.

Some of the patterns which have been identified have been the use of informal value transfer systems (in this case the Hundi) being used to move money out of the country, trade misinvoicing whereby invoices are manipulated by importers/exporters to move funds across borders illicitly, shell companies being used to manage and obscure wealth from certain jurisdictions[3] and some regime insiders representing that their wealth has been outside Bangladesh such as through real estate business in the UK.

STEPS YOU CAN TAKE

Conveyancing is a high risk sector, and intelligence of this sort is a stark reminder of the need for vigilance and strict compliance with AML and CTF requirements.

We strongly urge MLROs to:

  1. Identify their practice’s exposure to relevant transactions or regulated activities relating to clients who:
  1. may be under investigation in Bangladesh for corruption-related offences and/or money laundering.
    1. were members of the Hasina Government, or are family members, relatives or known close associates of former members of the Hasina Government.
    1. were business associates of the Hasina Government, state contractors to the Hasina regime, or experienced a significant growth in business during the 16 years that Hasina was in power in Bangladesh. 
  2. Ensure robust AML checks are undertaken in relation to clients that fall into the categories set out above, including enhanced due diligence to establish and/or review the source of wealth and source of funds. Bear in mind the paragraph about the patterns which have been established in undertaking your checks.
  3. Report suspicious activity to the UK’s Financial Intelligence Unit, and where appropriate under the Defence Against Money Laundering route, especially given the dynamic nature of the situation in Bangladesh.  Doing so will ensure vital information and intelligence from the conveyancers is not missed.
  4. Be particularly alert to changes in corporate ownership, or the transfer of assets between corporate groups, associates or family members in relation to these clients especially in relation to property ownership.

The CLC’s Anti-money Laundering Toolkit contains extensive resources to support your compliance with AML and CT, and should you or colleagues need any further support with AML matters, you can contact aml@clc-uk.org.   

[1] Which prohibit the movement of over $12,000 out of the country each year without central bank approval.

[2] https://www.theguardian.com/business/2024/nov/30/money-trail-questions-over-deposed-bangladeshi-elites-400m-uk-property-empire

[3] British Virgin Islands, Isle of Man, Singapore, UAE and the UK.

The Council for Licensed Conveyancers welcomed the government’s commitment, in an announcement on Sunday, 9th November, to work with the Digital Property Market Steering Group to ensure that all the excellent work done so far to plan the modernisation of homebuying can be implemented.

The CLC hopes that the government will be able to remove the well-understood barriers to progress and that the entire industry will unite to deliver change in the interests of home buyers and sellers and of the country as we strive to make the best possible use of the housing stock.   

The text of the government’s statement is below.

Home buying and selling to become quicker and cheaper and provide more power to leaseholders

·       Major new plans to modernise home buying and selling to save people time and money, tackling delays of almost five months

·       Changes will help fewer property transactions fall through – delivering on Plan for Change to put more cash in working people’s pockets

·       Further measures will improve the lives of leaseholders by handing them more control over their homes and service charges   

Millions of people are set to benefit from improvements to the way homes are bought and sold, saving them both time and money by helping stop property transactions from falling through. 

Under major new plans, the government has announced today [February 9] it will modernise the way the process works to bring down current delays of almost five months. One of the key reasons the buying and selling process can be long and frustrating is a lack of digitalisation and join up in the sector, which is why the government is opening up key property information, ensuring this data can be shared between trusted professionals more easily, and driving forward plans for digital identity services to slash transaction times.  

These reforms will make home buying fit for the 21stCentury and give much-needed certainty to everyone involved in property transactions, with one million taking place in the UK every year. By making information available at people’s fingertips, it will be far less likely for surprises to be encountered later on in the process. This will make it easier for people to get onto the housing ladder, reduce the requirement to share ID in-person in the long-term, and decrease the number of transactions collapsing.  

Currently, fall throughs – which impact one in three transactions – cost people around £400 million a year, on top of the four million working days lost by conveyancers and estate agents alone which is equivalent to £1 billion. By bringing the process into the digital age, and learning from success stories such as Norway where transactions complete in around one month, the government is putting more money into the pockets of hardworking people and delivering on our Plan for Change to grow the economy.  

Meanwhile changes to improve the lives of leaseholders – who have already achieved the dream of homeownership but found it falls short of what they were promised – will also be introduced from next week, with secondary legislation for the Right to Manage measures in the Leasehold and Freehold Reform Act 2024 being laid tomorrow – ahead of the schedule the government committed to last year. 

These changes, which will come into force on 3rd March, will empower more leaseholders to take control of their buildings more easily, giving them power over how their service charges are spent, and removing the requirement for leaseholders to cover the legal fees of their freeholder when making a Right to Manage claim – potentially saving them up to £3,000 for the most costly claims, and reducing the incentive for landlords to obstruct the process.  

Housing and Planning Minister Matthew Pennycook said: 

“We are streamlining the cumbersome home buying process so that it is fit for the twenty-first century, helping homebuyers save money, gain time and reduce stress while also cutting the number of house sales that fall through.   

“Our modernisation of the system sits alongside further reforms to improve the lives of leasehold homeowners across the country, allowing them to more easily and cheaply take control of the buildings they live in and clamp down on unreasonable or extortionate charges.

“These reforms build on the government’s Plan for Change to deliver higher living standards and 1.5 million safe and decent homes in this Parliament, and our ongoing efforts to protect leaseholders suffering from unfair and unreasonable practices as we work to end the feudal leasehold system for good.” 

Currently, information such as building control and highways information is predominantly paper-based or recorded in non-machine-readable formats. On top of this, where data is available electronically, there are not established protocols for accessing, sharing and verifying that data which leads to more delays.     

But under a fully digitalised home buying and selling process, the information key parties need – from mortgage companies to surveyors – will be within reach immediately, with the necessary identity checks carried out once. Clear information early on will mean there are no surprises late on in the transaction which might cause it to fall through, so instead the transaction is completed smoothly without unnecessary time, energy or money spent.  

That’s why the department is working hand-in-hand with the property market, supported by HM Land Registry (HMLR), and is today announcing a 12-week project to identify the design and implementation of agreed rules on data for the sector, so that it can easily be shared between conveyancers, lenders and other parties involved in a transaction. HMLR will also build on its work in digitising property information and lead 10-month pilots with a number of councils to identify the best approach to opening up more of their data and making it digital, whilst the government pushes ahead with plans for digital identity verification services including in the property sector.  

This will all be carried out in conjunction with the Digital Property Market Steering Group – a collection of industry and government experts committed to digitalising the home buying and selling process and delivering this change.  

The CLC has established a Technology and Innovation Working Group.   Guided by three principles, improving efficiency and transparency, protecting consumers and improving the consumer experience, the Working Group will collaborate to help shape new CLC guidance on the responsible and ethical use of technology and innovation in practice.

You can help shape future CLC Guidance

Today, the Working Group has published two questionnaires to gather insights from practices and technology providers to inform the CLC’s new guidance.

The Working Group is particularly interested in understanding more about risks and benefits, obstacles to adopting, perceptions and what key issues should be addressed in the new guidance.  

The Working Group is keen to learn more about the experience of CLC practices that are currently using or planning to adopt new technology.  Those interested in taking part are invited to complete this online questionnaire   https://forms.office.com/e/LX0amXxURu.

Similarly, the Working Group invites technology providers that are working with CLC practices or planning to enter the CLC market to share their insights via this questionnaire  https://forms.office.com/e/viVsSQMeN9.

The questionnaire closes on 29 February 2025. 

What next

The Working Group will convene on 29 April to review the feedback provided in response to the questionnaires and plans to hold an in-person Q&A session with a view to gathering a deeper understanding of certain technologies. 

Informed by the expertise of technology providers and the experience of practices, and in collaboration with the Working Group, the CLC will prepare draft guidance for publication in late summer. 

If you are interested in finding out more about the Working Group or would like to submit evidence but cannot complete the online questionnaires, please contact Catherined@clc-uk.org.

If you are interested, the Working Group’s terms of reference can be viewed here Terms of Reference  and membership includes:

Council of Licensed Conveyancers

Milton James (Chair of Working Group and CLC board member)

Sarah Debney (CLC board member)

Sarah Ryan (CLC board member)

Representing small, medium and large conveyancing and probate practices:

Sunita Chauhan (Premier Property Lawyers)

Bruce Griffin (Eden Conveyancing)

Etienne Pollard (Juno Property Lawyers)

Ed Percival (Simply Property Lawyers)

Kirsty Claridge (Probate Practitioner, The Deans Legal Services Ltd)  

Simon Hawkins (ChartaHouse)

PII Providers:

Calum MacLean (Miller)

Vanessa Cathie (Miller)

Scott Thorne (Howden)

Lenders:

Epi Pearce(Nationwide)

Stakeholders from wider sector:

Lisa Summerton (consultant)

Caroline Bray (HM Land Registry Geovation Stakeholder and Contract Manager)

Isabelle Chatel de Brancion (Business and Innovation Lead, Geovation, working at Ordinance Survey)

Ross Love (PEXA)

HMRC has seen a spike in Stamp Duty Land Tax (SDLT) repayment requests where it’s claimed a property is not suitable for use (NSFU) as a dwelling so the lower, non-residential rates of SDLT apply. HMRC found over 95% of NSFU claims are incorrect and fell well below the required threshold.

Conveyancers and their clients must be wary of anyone offering their services to make any claim to reduce their SDLT charge (either pre or post transaction) because the property is uninhabitable or in need of repair. HMRC is taking action against dishonest tax agents who encourage or facilitate customers making false claims for expenses, rebates, or tax credits. HMRC has a range of civil and criminal powers to use to disrupt or investigate, with a view to prosecution, those that cause harm to the tax system.  If clients allow someone to make an inaccurate claim on their behalf, they risk having to repay all of the tax claimed, including any fees that may have been deducted, plus interest and penalties. Conveyancers’ involvement in any such cases will also be considered by the CLC.

Clients considering making an NSFU claim should be made aware that whether a property has deteriorated or been damaged to the extent that it no longer comprises a dwelling is a question of fact and will only apply to a small minority of buildings.

When considering whether or not a property is suitable for use as a dwelling, you should note that:

Find out more about NSFU on HMRC’s Youtube channel: Stamp Duty Land Tax: when is a property not suitable for use as a dwelling?

Further reading: Not suitable for use as a dwelling (uninhabitable dwellings) on gov.uk. 

In the 2024 Risk Agenda we highlighted our concerns about the variable quality of title registration applications across the regulated community.

It is very important that practices that see high levels of avoidable requisitions (i.e. avoidable requisitions in anything above 5% of applications) take urgent steps to improve the accuracy of their applications. As we have already indicated, this will be an area of focus for the CLC in 2025.

Timely and accurate title registration is vital to serve the interests of buyers and lenders. It will also save time and money and will contribute to the reduction of delays at HM Land Registry.

HM Land Registry has kindly agreed to run two sessions for CLC lawyers advising on how to avoid some of the most common mistakes. They will be useful for anyone who is involved in preparing applications and ideally, you should aim to attend both sessions.

There will be time for questions in the sessions, but Land Registry colleagues will not be able to deal with individual cases.

These sessions will be useful for all practices. . Each session carries one hour of CPD points.

Please register at the links below.

Registration links

Session 1, 28th January 2025, 10am-11am

https://events.teams.microsoft.com/event/6b3f9af2-da04-4683-acdd-fd2f967aacad@236309a8-284b-4e57-a7b3-fc767736f69d

Session 2, 29th January 2025, 10am-11am

https://events.teams.microsoft.com/event/caa3f9ab-bca0-479d-8c3a-00cf0a2a6873@236309a8-284b-4e57-a7b3-fc767736f69d

The CLC has a well-established discretionary Compensation Fund (‘the Fund’) of last resort, funded by the regulated community, from which we may make grants or other payments for the purpose of relieving or mitigating losses arising from certain wrongs committed by CLC Practices.

Today, we are launching a consultation on draft new rules for the Compensation Fund.

We are seeking the widest possible input on the proposed new rules from the consumers and their representatives, past applicants to the Fund, the regulated community and anyone with an interest in the regulation of conveyancing and probate services for the protection of consumers.

You can find out more here.


Third Party Managed Accounts (TPMA) provided by FCA authorised firms offer law practices the chance to de-risk and simplify the handling of client money in conveyancing transactions.

Transpact.com (one of two TPMA services that are authorised by the FCA as a Payment Service Provider) are making CLC-regulated firms an offer so that they can assess the benefits of TPMAs themselves, and so that the CLC can gather more information about the impact of TPMA in operation:

CLC members simply need to add the code CLC120 to the escrow conditions they create for the TPMA transaction to activate the special offer for any transaction – it is that easy.

If you want to learn more, please get in touch with the legal team at Transpact.com at Conveyancers@Transpact.com.

Whilst the first use of a TPMA will be a new and learning experience for any conveyancer, taking some time to think through and understand the processes and liabilities, for the second and subsequent transactions there should be a significant time saving in addition to security enhancements .

The CLC will be in touch with a questionnaire to assess your firm’s experience of using TPMA if you decide to take part in this trial.

Digital solutions are set to transform the UK conveyancing market. The CLC is working with other key industry bodies through the Digital Property Market Steering Group to help shape a faster, more certain, more secure and less stressful home buying and selling process. 

HM Land Registry has developed a survey to understand the extent of digital adoption among conveyancing firms, with a particular interest in your experiences with digital tools, the challenges you face, and your plans for future digital adoption.

Additionally, we value your thoughts on the key enablers and blockers to digital adoption, as well as your top priorities. This survey should only take approximately 10 minutes – your responses will be anonymous and will be instrumental in shaping how we support the property market and help inform future strategies for its digital evolution.

 Please click here to start the survey

In order to protect the interests of the clients, the Council for Licensed Conveyancers (CLC) has intervened into the following practice which closed on 31 October 2023:

Nelson McLean Ltd, trading from:

Bells House

Bells Lane

Tenterden

Kent

TN30 6ES

Find out more

The quality and timeliness of what is generally referred to as post-completion work should be a key focus for all conveyancers. Submitting an accurate application to update the Land Register and dealing promptly with any requisitions (queries from the Land Registry) that follow are vital to ensuring that your client’s interest in the property is protected and that any charge for a Lender is correctly registered.

If the conveyancing up to exchange of contracts and completion of the transaction has been carried out to a good standard, the post-completion work should be straightforward. Delays in the submission or applications to the Land Registry or high numbers of requisitions indicate a poor quality of conveyancing.  The CLC takes the Land Registry’s data into account as part of its assessment of the risk rating of each practice. 

We have produced a series of short videos setting out advice and insight on the management of post-completion work. HM Land Registry also offers a great deal of training. All CLC conveyancing practices should ensure that they are doing all they can to ensure their clients and their lenders are properly protected. If your practice is experiencing high levels of requisitions or delays in making submissions, we recommend making this a priority now.

Each year before the beginning of the licence year, and after consulting with the profession, the CLC makes an application to the LSB to approve the regulatory charges payable by the profession for the next licensing year. The LSB has now approved that application and we are writing to all practices to advise them of each practice’s fees for the new licensing year starting on 1 November 2024.

You can find more information about the regulatory fee applications made by the CLC and the LSB’s decision here. The applications include information relating to:

  1. The proposed changes to the regulatory fees
  2. The reason for making or not making changes to regulatory fees being levied
  3. The current and forecast expenditure of the CLC
  4. How your regulatory fees will be applied to the various regulatory functions and regulatory objectives

The fee rate proposals were subject to an open consultation over the summer. The consultation and responses can be found here.

A summary of the of the CLC’s expenditure by cost category and allocation by function for the current and next financial year can be found in annex E.

The regulatory fees payable by CLC regulated practices include:

  1. A Practice Fee – determined by the practice’s turnover and a tiered contribution rate (See Annex B for the contribution rates). This fee is used to fund CLC operating activities;
  2. A Compensation Fund Contribution – determined by the practice’s turnover and a tiered contribution rate (See Annex B for the contribution rates). This Fee is used exclusively to fund the Compensation Fund operations, including compensation fund claims, interventions and storage of closed practice files and related administration;
  3. An OLC Levy – comprising the costs charged to the CLC by the legal Ombudsman and allocated to practices based on practice fees and cases accepted for investigation by the Legal Ombudsman. The fees collected are paid to the Legal Ombudsman and is not used to fund CLC operating activities. (See Annex D for the OLC estimate and the levy calculation).

All practices are required to pay the Practice Fee, Compensation Fund Contribution and OLC Levy as a condition of licence. All practices have the option to pay these charges in 12 monthly, interest fee payments, payable by direct debit. Please note that all regulatory fees are due on invoice. Any practice that takes advantage of the instalment payment option and decides to close during the Licensing year, will be required to pay the balance outstanding on notification.

While we always endeavour to keep our regulatory charges as low as possible, we have had to increase the Practice Fee again this year due to a reduction in aggregate practice turnovers (1%), inflationary pressures and increasing regulatory requirements such as AML supervision and the requirement to meet an additional regulatory objective and responding to more prescriptive regulatory requirements from the LSB and other stakeholders.

The regulatory charges and any changes made to these arrangements are summarised in the table below:

Regulatory ChargeBasis of chargeChanges made
Practice FeeAll practicesFee rates have been increased by 9%
Compensation Fund ContributionsAll practicesNo change
OLC LevyAll practicesThe allocation of cost to practices based on availability and usage has changed from 70% – 30% to 50% – 50%
Individual License feeAll individualsNo change
Administration chargesAll applicantsNo change

Changes to the OLC levy

The Legal Ombudsman (LeO) costs are recovered from all approved regulators (and by extension the regulated community) through a recharge in accordance with the Legal Services Act 2007 (Levy) (No.2) (Amendment) Rules 2014.

The legal Ombudsman allocates their annual cost to regulators based on the percentage of the total cases accepted for investigation in the previous 3-years. The legal Ombudsman charge to the CLC is then recharged to practices via an availability and usage fee as follows:

The CLC wrote to all practices in April 2024 advising of changes to the billing arrangements and that we would amend the levy collection invoice (which was initially based on the prior year’s actual charge) once we had received the new estimates from LeO. LeO has now issued the estimate for 2024/25 and the levy collections is being amended based on the revised allocations between usage and availability, updated case numbers and the new cost estimate.

The number of cases allocated to CLC regulated practices for the 2024/25 billing period has increased to 468 (2023/24: 372) and that the estimated cost for the year is £1,213,568 (2023/4 £1,039,942). The allocation of these costs between the availability and usage charge has also been amended as indicated above. The increase in cost being allocated to practices is driven by inflationary increases as well as the increase in case numbers.

Because LeO use the number of cases accepted for investigation to allocate cost to regulators, the CLC uses these same case numbers (as advised by LeO) to allocate the usage cost.

The CLC’s 2024 Risk Agenda highlighted a range of key areas of risk for practices that we regulate. They were identified through our close monitoring and inspection of practices over the previous year.

To help you manage risk in your work, we have arranged a series of Roadshows around the country (London, Liverpool, Leeds, Bristol) bringing together expert advice in the key areas of Anti-Money Laundering, Post-Completion Work and Complaints Handling.

We will also cover the CLC’s new Ethical Principles, which have been developed over the past couple of years in consultation with practitioners and representatives of consumers and that has driven updates to the Code of Conduct and consequential changes to other Codes.

Agenda

  1. The CLC’s new Ethical Principles and the revised Code of Conduct – Catherine Drennan, Deputy Director of Policy and Regulatory Standards, CLC

Book your place

Proposed changes by the Council for Licensed Conveyancers (CLC) to its Code of Conduct have been approved by the Legal Services Board (LSB) and will take effect from January 1, 2025.

Last reviewed in 2011, the CLC closed a consultation at the beginning of the year on a revised Code of Conduct to improve clarity and reflect the significant changes in practice and the societal context in which its firms operate.

Following approval by the LSB, the revised Code of Conduct is now available to view and will take effect from 2025. The changes place increased importance on knowing your client, high standards of professional conduct and promoting and supporting equality, diversity and inclusion in practice to deliver positive outcomes for clients.

The Code of Conduct is part of the CLC’s Handbook, setting requirements and standards of conduct which must be met by the lawyers and entities that it regulates. The previous Overarching Principles are replaced by six new Ethical Principles which outline standards of practice that serve to protect and promote the interests of consumers.

These changes reflect the outcome of the 2022 consultation on the Ethical Principles and extensive engagement with the CLC’s Consumer Reference Group and governing Council. The result of which is a reorganised, clarified, and updated document which will be launched to the CLC’s regulated community via a series of nationwide roadshows in November.

The Legal Services Act 2007 sets out nine regulatory objectives that all legal services regulators should meet. The updated Code of Conduct helps in the achievement of each of those nine objectives, and now outlines the six updated Ethical Principles, with each accompanied by specific outcomes which must be met.

Sheila Kumar, Chief Executive, said: “It was time for a comprehensive review of the overarching expectations we have of CLC-regulated lawyers. The substance of the changes may not appear far-reaching but this is because we took the opportunity to present the Code of Conduct more simply and clearly. The Ethical Principles enshrined in the Code therefore represent continuity of the high standards for which the CLC is known. Substantial changes to the Principles in relation to equality and diversity and the need to know your client reflect the CLC’s own insight into these issues and how the world has changed around us since the Code was last updated.

“We look forward to speaking to our regulated community about these changes in a series of roadshows next month.”

The CLC will host roadshows week commencing November 11, in London, Leeds, Liverpool and Bristol. Further details can be found here.

Shieldpay and the Council for Licensed Conveyancers (CLC) recently hosted a roundtable discussion to examine the risks involved in client money management practices within the conveyancing industry. The event brought together experts from conveyancing law firms and regulatory bodies to join CLC’s Director of Strategy and External Relations, Stephen Ward. 

Also in attendance was Shieldpay’s Chief Growth Officer, Claire Van Der Zant, Shieldpay’s Head of Compliance & MRLO, Scott Newby, and Shieldpay’s Head of Legal Ed Boal to provide insight into the causes of the risks that surround client money management and how these risks can be mitigated in the present and into the future. 

The conversation opened with a discussion of the impact that technology is having on the handling of client funds. CLC’s Stephen Ward reflected on the first ever digital mortgage payment, which had happened six years prior via a Shieldpay Third-Party Managed Account (TPMA). 

“It delivered the security and the efficiency that we all expected,” said Stephen, “but what we didn’t understand going into it was the benefit of the transparency that it brought to the transaction, and that was a very welcome side effect.”

The payment was part of a pilot scheme to demonstrate the future of the industry and since then the CLC has not only approved the use of digital solutions but is actively encouraging law firms to use them to reduce the risks associated with managing client funds. 

“We took the opportunity to make very clear to the firms that we regulate that TPMAs and other alternatives to client account were not only acceptable but desirable,” said Stephen “but we haven’t seen an uptake in their use since then, and it would be good to understand why that might be.”

Personal Indemnity Insurance – a growing challenge

One significant challenge highlighted during the conversation was the growing cost of Professional Indemnity Insurance (PII) reflecting the growing risks associated with handling client funds. Another factor propelling premiums up is a lack of competition, which might be driven by regulators being overly rigid in their criteria and pushing all legal firms towards the same, limited number of products. The Solicitors Regulation Authority (SRA) has acknowledged the impact that rising insurance costs are having on many firms. 

Richard Orpin, at the time the interim CEO of the Legal Services Board (LSB), emphasised that collaboration between legal and financial services regulators is important in overcoming this challenge. “The message to legal regulators is that there ought to be sufficient arrangements in place to ensure that client money is protected” said Richard “Encouraging the use of TPMAs is one of the means by which risks associated with handling and holding client money can be reduced.” Greater use of TPMAs would also lower the risk for regulatory compensation funds, which are called on in instances where there has been dishonesty by legal services providers.

The LSB’s recent insights paper sets out key principles that should underpin legal regulators’ approaches to putting in an appropriate level of financial protection for consumers – including reducing risk, improving transparency and fostering effective competition.  

For firms, the LSB has suggested using TPMAs to reduce risk and lower insurance premiums, and to be as transparent as possible with insurers around data arrangements and claims. The LSB’s recent report on this issue can be found here. 

Stephen noted some positive developments, with two new insurers having entered the market this year (although another also left). 

“We’re actually ending the [June] professional indemnity insurance renewal round for Licensed Conveyancers in a healthier place than where we started it.” said Stephen, “And I think that’s part of the cyclical nature of the insurance market. We’ve been expecting this improved liquidity, and it has now arrived.”

This challenge will continue for the insurance market unless changes are made however as a recent survey published by the law firm Browne Jacobson and the International Underwriting Association shows that 38% of the participating insurers had considered leaving the solicitor’s professional indemnity market following the Discovery Land v Axis case.

Exploring the risk landscape

The conversation then moved on to discuss the specific risks involved in handling client funds that are driving up premiums and keeping regulators awake at night. 

Malpractice and compliance breaches

The panel identified a range of risks currently being faced. Some of these result from malpractice in the legal sector itself. Recent high-profile cases of client fund mishandling include that of Axiom Ince during which £64 million of client funds went missing. This in turn has led to an uptick in interventions from the SRA, an increase in the contributions firms need to make to the SRA’s compensation fund and the regulator launching a Consumer Protection Review, to take a broader look at client fund handling. The CLC has reported that instances of fraud have been slightly lower in recent years, with small numbers and values of fraud being reported. However, cases do still exist — such as a recent misdirection of £75,000 as a result of socially engineered fraud —so there is no room for complacency and risks shouldn’t be underestimated. 

Other risks however are external. David Jabbari, CEO of Muve, a Conveyancing Firm, spoke to the cybersecurity landscape and the risks it poses. 

“One of the biggest risks is phishing attacks,” said David, “mostly directed at client’s email security rather than a firm’s because client email is often not very secure. Despite warnings that firms give to clients on phishing, I still think it’s one of the biggest risks. What’s needed is a forensic analysis of where risk originates.”

One solution here, said David, would be to put client communications within a secure environment. This wouldn’t eliminate the risk but would go some way towards mitigating it. 

Rob Gurney, Managing Director of Landmark Information Group agreed, “The extent to which getting client communication off email could be a bigger win than taking the funds away from lawyers in terms of enhanced security shouldn’t be underestimated.”

Tech and security

The growing threat of AI 

While more sophisticated technology can help firms mitigate cyber-risk, it is also making criminals more sophisticated. Social engineering fraud for example, by drawing on AI enhanced tools to appear more human, is becoming more sophisticated and convincing. This means that where law firms had become more attuned to – and robust against – fraud, AI has enabled it to re-emerge as a threat and increase the risk again as it becomes increasingly deceptive and convincing.

Sarah Charlton, CEO of Eaton-Evans & Morris reflected on the major incident mentioned above of social engineering fraud to assert her concerns. 

“Firms have done a huge amount to clamp down on in the last 10 years and there’s been a lot of learning, but fraudsters are becoming more sophisticated and social engineering tactics are becoming more convincing.”

Risk mitigation: strengthening relationships with clients 

The panel discussed greater consumer education as one possible means of mitigating this risk.  Strengthening communication and relationships between firms and clients by meeting in person for example, not only builds trust but also enables both parties to more accurately identify social engineering fraud and instances of phishing. 

While law firms are exposed to risk when handling client money, the potential impact that those risks could have on clients is ultimately greater, as it is their capital on the line. This should always be at the forefront of discussions around best practice and mitigation of risks, with efforts made to understand the clients and their needs on an individual basis, and to work with them to mitigate social engineering attacks.

Risk mitigation: Education and qualifications

The importance for conveyancing firms in strengthening their cyber security and ensuring they have robust protection to the most common cyber attacks was also discussed. Sarah also suggested that as a minimum, firms should be working with the government backed Cyber Essentials scheme which protects businesses against the most common cyber attacks. 

“I think that would force a lot of people’s hands,” said Sarah, “even the basic Cyber Essentials is difficult to attain for small to medium sized law firms that don’t have the tech and specialist people in-house. An application for Cyber Essentials goes into detail on how a law firm operates from a tech perspective and where people can gain access.”

Not only would Cyber Essentials educate legal practitioners, but it would also minimise the risk of wider attacks by urging firms to build a stronger base layer of defence. 

Risk mitigation: Technology solutions

There are also multiple existing and emerging technologies that can be used to strengthen security when it comes to handling client money, from TPMAs to integrating blockchain technology. 

Scott Newby, Head of Compliance and MLRO at Shieldpay added to the conversation to shed some light on the controls and prevention tactics TPMAs can offer to mitigate risk. He was the first to say, “we’re not going to be able to stop all fraud.” He called upon his tenure in the industry to explain that fraud is an ever-evolving practice and there will always be new tools and tactics to get around prevention methods. 

TPMAs however, are a continuously developing digital solution. Shieldpay’s platform is being constantly reviewed to respond to emerging threats. Scott shared the example of the upcoming financial regulatory updates, Confirmation of Payee (COP) and APP Fraud, and the functionality changes the payments provider is making to ensure compliance. The specialist technology is evolving and adapting to stay ahead of the risk landscape for law firms. 

Karen Edwards, Head of Professional Development at the ILFM, argued that, when it comes to the use of blockchain technology in the conveyancing industry, “going forward there is likely to be change, it’s just a question of when and how.”

It was widely agreed that there is only one direction of travel when it comes to client money management practice. Technology has to be the way forward for conveyancing firms. In order to ride the wave of change, law firms should think about investment and cultural adoption of digital solutions now to get ahead of the inevitable shift. 

Revenue

While TPMAs present a solution to many of these tech challenges, some on the panel also noted the risk they pose to firms’ revenue streams, which are already under pressure. In recent years, as interest rates have climbed and peaked, many firms have come to rely on the revenue from holding client funds and the interest this generates even more than had previously been the case. Alongside this, other non-core revenue streams like CHAPs fees have also become important, as legal services fees have been squeezed by the economic climate. 

Claire Van der Zant, of Shieldpay, noted however that “While part of the industry is being propped up by the interest rates, they are changing, as indicated by the latest decision on rates from the Bank of England. Likewise, consumer duty means that the financial regulator would not be happy to find businesses relying on interest income.”

Chris Handford, Director of Regulatory Policy at the SRA noted that this question forms part of the SRA’s Consumer Protection Review as while the SRA has guidelines on this, it doesn’t currently have rules. Chris pointed out however that, “We have to also be conscious of the impact it would have on the sector if we were to stop this immediately.”

Nevertheless, it was felt by the panel that relying on interest income is an unsustainable business model which also incentivises malpractice. Far more common than substantive fraud in the legal sector, argued Sarah, is “smaller firms getting into trouble and the Partners ‘dipping’ into client money to pay the payroll.” Many firms are doing this in response to a difficult economic climate rather than with malice, but it’s risky nonetheless. Sarah also noted that accountancy practices aren’t always consistent, so annual audits can’t always be relied on to identify dishonest client money handling.

What are the steps forward to succeed today, tomorrow and in the future? 

It was widely agreed that the conveyancing market is currently in a fragile state. Reflecting on the key concerns raised during the roundtable session, from fraud and phishing threats, to the economic climate, and incidents of mishandling client funds, it is clear why there are changes to regulation on the horizon. 

While the LSB, CLC and SRA have all weighed in on the conversation to express their unanimous perspective that the risks outweigh the benefits for law firms managing client money in-house, one key challenge highlighted by the panel was diversity of solutions available and competition in the market to support law firms to outsource this. There was consensus that we need a healthy market with multiple players in the space to incite innovation and benefit the law firms and the end consumer. 

However, with more solution providers, David Jabbari shared his view that there must be interoperability. Data is such an important part of the conveyancing process and in order to be able to have a fully connected and seamless transaction for all parties involved, up and down the chain, platforms must be able to safely and efficiently transfer this information between them. 

In thinking about how we can work together to mitigate these key risks and build the future of the industry, Chris Williams, founder of Novus Strategy & Consulting, suggested zooming out and having a clear structure for how to approach transformation for the industry. He provided the idea to look first at what solutions can be acted on today (now), then setting our sights on tomorrow (next) and then planning for further on in the future (later). As an initial outline, this could mean now, focusing on investigation and education in the short-term to ensure we are building a comprehensive foundation of knowledge; next, we start to drive greater adoption of the technology solutions we currently have at play to drive the move to digital; and further ahead, we look to reimagine the process and transform the way the end-to-end transaction runs in order to eradicate major risks. 

The importance of staying abreast of technological advancements therefore is crucial for future proofing the money management process. This applies both to being aware of the latest methods used to conduct cyber attacks and fraud, and to the technology being developed by third parties to strengthen security and reduce risk. Risks and regulations will continue to develop at a pace, and solutions can be found through the collaboration between law firms, third party technology, and clients, all working towards the overall aim of greater efficiency and protection. 

But the driving force for change is regulation – mandating change is the most powerful way to get this stagnant market to finally embrace the digital transformation wave.

Work by the Council for Licensed Conveyancers (CLC) to empower consumers is having “a significant, measurable impact,” the Legal Services Board (LSB) has been told.

In its report to the LSB, the CLC also outlined its experience of co-operation with HM Land Registry and the Legal Ombudsman (LeO), as well as other legal regulators, that aims to put more information into the public domain that can help consumers find and choose a lawyer.

Following the Competition and Markets Authority’s call to drive more choice in the legal market, the LSB published a Statement of Policy on Empowering Consumers in April 2022 and gave regulators a 30 September 2024 deadline to provide assurance about how they are meeting the expectations it sets out.

The CLC’s submission pointed out the 2024 Tracker Survey issued by the Legal Services Consumer Panel showed that 54% of consumers who most recently used a licensed conveyancer shopped around for that service, compared to 41% for all legal services and 48% of those who had recently used conveyancing services (from any provider). Such data in relation to probate services, which the CLC also regulates, was not available.

The findings indicate either that the CLC’s Informed Choice rules are having a greater impact than is average for the legal sector or, when consumers shop around, they are more likely to choose a licensed conveyancer than another provider.

“Given that both factors are likely to contribute to the finding, we can say that the CLC’s Informed Choice regime is effective and is having a significant, measurable impact,” the submission said.

The CLC’s Informed Choice framework came into force in December 2018 – setting out what and how practices should publish to assist consumers. Monitoring and enforcing compliance quickly became part of the day-to-day operations of the CLC and compliance levels are high.

The submission said: “Compliance is kept under review in the same way as all other regulatory expectations, through monitoring, including face to face inspections, and intelligence received. Failures to comply with the CLC’s expectations in this area are generally easy to remediate and have not proved challenging…

“We cannot be complacent, however. Overall levels of shopping around could be increased, clearly, and the CLC is committed to continuing to bear down on consumer complaints.”

The proportion of transactions involving licensed conveyancers that result in complaints to LeO is very low – roughly 1 in 400 transactions by CLC lawyers lead to complaint investigated by LeO and only around 1 in 2,750 results in a full ombudsman decision. These underline the very high levels of satisfaction with licensed conveyancers (91% satisfied with both the outcome and service) shown in the Tracker Survey.

The CLC is still in discussion with LeO about published data and how it can be used: “Once the data is clean and reliable, we will consult on ways that it could be made available to consumers.”

The submission also explains how the CLC has decided to adopt the British Standard definition of vulnerability and will be advising firms on how to put that into practice in their work, and is part way through joint research with the Bar Standards Board and CILEx Regulation that aims to find ways to tackle digital exclusion more effectively.

CLC Chief Executive Sheila Kumar led the cross-regulator work to implement the Competition and Markets Authority recommendations and the CLC has also played a leading role in the development of the Legal Choices website, which is exceeding its targets for engagement.

She says: “The Competition and Markets Authority identified a shortage of information for consumers of legal services. The CLC’s role in the cross-sector initial response and in the development of the Legal Choices website alongside our commitment to our Informed Choice agenda is delivering significantly positive results.

“We are not complacent, though – we know there is still some way to go and are determined to progress the work with other regulators and stakeholders to ensure that consumers are able to make an informed choice of legal service provider in a way that works for each consumer.”

The Council for Licensed Conveyancers recently held its first ever Futures Roundtable, looking at the future of profession with students on the path to qualifying, those recently licensed and people responsible for training the next generation of licensed conveyancers.

Chaired by Neil Rose, editor of the website Legal Futures, it featured:

So, is becoming a licensed conveyancer an attractive career option? For Kara Evans, the answer is a big ‘yes’. “You’re always learning,” she explained. “There’s always a transaction you’re going to come across that you haven’t seen before. It’s more than just sitting there and doing a title check because there are always questions to be asked and things to be learnt.”

It was the same for Shayleigh Isom: “There’s always room for growth. One thing we say in our office is that no conveyancing transaction is ever the same and I think that’s really interesting and attractive for people.”

At the same time, as the Covid stamp duty holiday proved, it can be an exceptionally pressurised job that pushes people away. Natalie Moore says that, as a relatively new firm, Aconveyancing did not furlough any staff and in fact started recruiting once the SDLT holiday kicked in. But that did not prove enough and at one point “we actually had to turn our referrers off and turn the work away” to ensure that what they had could be done properly.

Vicki Redman recalled that it was so busy that she even found herself doing title checks, 11 years after moving out of a full-time conveyancing role. Swiitch did what it could to offer extra support, along with bonuses and gifts, with “regular communication to see how they were getting on”.

However, employers increasingly want qualified staff for the wider business benefits, Claire Richardson observed – insurers, as well as lender panels and their managers, want a higher ratio of qualified to unqualified as a guarantee of quality.

The group was united on the need to raise the profile of the profession – to make it a more attractive proposition as a career, for consumers to understand better the work conveyancers do and its complexity, and ultimately ease the path to charging higher fees.

Natalie Moore said: “Being the regulated provider of professional services within the home-buying process, it kind of all falls on us. But clients don’t understand, and they don’t want to or don’t need to. There’s a need for more education and, frankly, respect.”

The move to upfront and material information, with the push to instruct conveyancers earlier, might help, she went on. “It’s also about all parties working together, including the lawyers on each side, so it’s not a contentious transaction.”

Shayleigh Isom agreed. “People don’t understand that things take time and not everything’s within our control. So it becomes more overwhelming for the lawyer when they don’t have that right support from the other people in the transaction. I feel like it is getting better but we’ve still got a long way to go.”

It was frustrating, Ms Moore added, that despite all the technology now available, the home-buying process was not as joined-up as it should be – transactions are not happening any quicker as a result. “A lot of that is outside conveyancers’ control at the moment.” What is within their control, however, is culture and providing a bespoke service to build their reputation, she explained.

Younger generations will expect employers to make smart use of technology, with the benefits of artificial intelligence in particular much debated at the moment. Connor O’Dell reckoned technology would only ever take you so far. “There’s always going to be specialised knowledge required. You will still need a conveyancer to look over the detail before it’s produced to a client.” But the promise of seeing the administrative side of the job automated definitely appealed.

Cash Bishop cautioned that, first, clients would need reassurance – “Some struggle to use Thirdfort and that’s a very simple process of using technology to identify who you are. So I don’t know if some of my older clients would be happy that I’m using AI.” Second, they may start demanding lower fees if the technology is doing the work.

“It’s a great tool to help relieve the administrative burden and give us more time to be advisors,” said Natalie Moore, outlining her hope for greater integration between the different systems. “But you’ll never take away the human nature of conveyancing because it’s a personal journey. I don’t think it will reduce our fees. Hopefully, because we’ll have more time to advise, clients will feel they’re getting more value from us and we’ve got to use that to actually increase our fees and recognise our worth.”

The CLC is not a representative body, of course, but Claire Richardson said raising the profile of the profession was an important part of its work. A key challenge is that, of course, the title is not as well known as that of ‘solicitor’, and this can also have a knock-on effect with those talking to young people about careers.

“Schools, colleges, parents and careers advisors don’t say, ‘Oh, you’re a fantastic project manager, do you really like people? Can you manage a high-paced work environment? Have you thought about property law?’

“We’ve been doing lots of work around that, such as with apprenticeships, enabling people to access government-funded learning, and the new T-Levels [a more vocational alternative to A-Levels]. People will be able to take a property pathway in the law T-Level.

“All of those things mean that we’ve taken the term ‘licensed conveyancer’ from being just a professional qualification that people probably happened upon, into the National Curriculum. This exposure will help move people away from that idea of law as just being a barrister or a solicitor. Because actually most people come through law don’t end up being a generalist.”

Vicki Redman said Swiitch has recently extended its outreach beyond colleges and universities to schools so they can get to students earlier – those with law degrees can see a paralegal role in the conveyancing team as a stepping stone, whereas Swiitch wants them to see it as a career. Apprenticeships are part of that picture, and T-levels will help too, she added.

A feature of the profession is that around 80% of both licence holders and students are women. This may reflect both the flexible nature of qualifying, allowing for career breaks, and that some come into the job from administrative roles. It’s certainly the experience of Vicki Redman, who said she had several staff members studying to become licensed conveyancers while they were on or between maternity leaves.

“They definitely feel the flexibility. And we encourage people who want to do it part-time around their other commitments. And I think that’s what’s good about the CLC qualifications is the full flexibility. That people can do lots and then take a break or they can do it in individual modules and there’s not really too much prescriptive of how long things take. You can do things quite quickly or you can take more time depending on your circumstances.

“The fact that you don’t need a law degree and you don’t necessarily need to be qualified to do the job and you can work your way up, that’s probably something that’s attractive to a lot of women.”

Support and supervision during the training process are, of course, vital. Shayleigh Isom explained how the Simply Academy saw her running a caseload alongside her studies, with the training provider holding regular meetings that allowed her to review and reflect. “But I have friends that have gone to other firms where the support just isn’t there.”

Claire Richardson said exposure to “the breadth of what they need to be able to do in order to make their studies real to them” was vital. “In conveyancing, it’s more natural to have a lot of that supervision piece going on anyway. Our monitoring shows it’s mostly a good story across firms.”

The CLC provides the tools, said Cash Bishop, and then it’s up to the student. “If you enjoy it, you’ll get qualified quite quickly.” Connor O’Dell agreed: “You have the support and everything you need, but it is down to yourself how quickly you want to do it and the hours you want to put in.” Both warned though that the accounts unit was particularly hard – harder, in fact, than the one solicitors go through.

Claire Richardson explained: “It’s a really important aspect of the risk-based approach that we take to qualifying as CLC lawyer – and of future career progression. Stakeholders are very reassured with the accounting standards of CLC lawyers.” She commended Cash’s advice that students sit with their firm’s accounts team to help prepare for it.

Kara Evans is enjoying her apprenticeship. “I wasn’t up for uni when I was doing my A-levels. When you’re doing the job and you’re hands-on, you’re learning so much more than just sitting in a lecture theatre with a textbook and coming out with no experience. A lot of my friends come out of uni and it’s hard to find a job because everywhere wants at least a year, two years’ experience. The apprenticeship’s definitely been the right route for me – you just get such a better understanding of what the job entails.”

In May this year, the Legal Services Board (LSB) published its First-tier Complaints Policy,  emphasising that users of legal services and the public should have confidence in accessing high-quality legal services and a mechanism for resolving their concerns effectively.  

If issues are not resolved at the first-tier level, users should have access to the Legal Ombudsman (LeO), a second-tier resolution option. The policy outlines a key outcome for regulators: to ensure the best possible complaints resolution system by utilising information from both first-tier and second-tier complaints (our emphasis). 

To align with this outcome, we conducted a standalone, voluntary Complaints Survey in June. This survey aimed to gather data on complaints handling at the practice level, establishing a benchmark to assess progress towards the LSB’s objectives over time. In CLC regulation, the goal is to foster continuous improvement in complaint handling and legal service quality, reducing the number of first-tier complaints and those escalated to the Legal Ombudsman.   

Therefore, alongside these policy initiatives, the CLC has been consulting on changes to the Legal Ombudsman (LeO) levy that practices pay. The CLC first implemented a ‘polluter pays’ model in April 2022, setting the current ratio at a 70% usage fee and 30% availability fee. The proposal is to move to a 50/50 ratio, further incentivising better complaints handling AND providing a benefit for those practices with fewer matters referred to LeO.   

As well as a financial benefit for practices with low numbers of second tier complaints, this shift is a professional good serving the best interests of consumers and emphasising the importance of good complaints handling in meeting regulatory expectations consistent with the CLC’s consumer-focused regulation agenda.   

How will your practice be impacted by the proposed change to the Legal Ombudsman levy?   

The good news is that 83% of practices will end up paying less under the proposed ‘polluter pays’ model, and 80% of respondents to our recent consultation on changes to regulatory fees support the move to a 50/50 ratio.   

111 practices with no cases will pay less 

54 practices with cases will pay less 

34 practices will pay more 

25 of the practices that with pay more will pay less than £2,000 extra 

9 practices will see their charge increase by more than £2,000  

We are considering the comments made in the survey, including the point that basing the charge on complaints accepted for investigation (which can result in no finding of shortcoming by the practice) is unfair and points to inconsistencies in the way LeO selects cases. These are matters that we are in active dialogue with LeO about, but for now we must work on the basis of the LeO dataset as is.  It is worth noting that if the charge per case were restricted to only those relatively few cases in which shortcomings on the part of the practice were identified, the cost to practices would be extremely high given LeO’s current and projected costs, and therefore likely unworkable in practice.   

The Challenge we issue to practices 

The changes will incentivise practices with disproportionate levels of referrals to LeO to review their handling of first tier complaints and address the root cause of client complaints. We encourage all practices to proactively consider training for staff that deal with complaints, and we are looking to develop joint training with LeO for the small number of firms with high levels of referrals  

The Complaints survey revealed that while complaint numbers are low per number of transactions, some firms are missing an opportunity to identify trends and areas for improvement with 39% of respondents rarely reviewing their complaints logs. Additionally, only 35% of practices provide regular training for complaint investigators, while 18% offer no training at all. In response, the CLC will offer training sessions at upcoming Roadshows and joint sessions with LeO in 2025 – look out for further details about the Roadshows planned for November 2024. 

The CLC is also planning a review of its Complaints Code and Guidance, focusing on proactive measures like client satisfaction monitoring to prevent matters escalating to a complaint. Meanwhile, practices are encouraged to review the current Complaints Code and Guidance and consider any necessary improvements to their complaint-handling processes.  

To keep up to date with the Council’s decision on the OLC Levy, please ensure you have signed up to receive the CLC newsletter: Please Sign Me Up. 

The Legal Services Board (LSB) is running their Prices of Legal Services Survey, which they last ran in 2020. LSB has Commissioned Pye Tait Consulting to conduct the survey, with telephone survey interviews happening in September and October. If you or your organisation receives a call from a Pye Tait interviewer this is likely to be a legitimate call.

The Prices Survey provides the LSB with information on Legal services providers’ pricing and price and quality transparency. It focuses on three areas of law: conveyancing; divorce; and, wills, trusts and probate. The survey relates to two of the regulatory objectives for the LSB and the regulators set by the Legal Services Act 2007. These are promoting competition and protecting and promoting the interests of consumers.

The CLC, LSB and Pye Tait very much appreciate CLC practices’ participation and LSB and Pye Tait are offering an individual benchmarking summary to practice that completes the survey.

Further information and confirmation is available on the LSB website.

The CLC’s application for approval of proposed changes to the Code of Conduct and 18 secondary, topic-specific Codes is currently under consideration by the LSB.  The extended decision period the LSB is working to will end on 17 September 2024 and we hope to receive approval by this date.   

The application and draft, revised Code of Conduct and secondary codes can be viewed on the LSB website.   

 We will confirm the implementation date and give all practices reasonable notice of implementation once we have approval from the LSB.   

Once approved, the revised Code and secondary codes will be published online to allow practices time to familiarise themselves with the changes and to consider what they need to do to ensure their practices are compliant with revised requirements.  

  We are planning several webinars and roadshow for late autumn at which we will outline the changes and when and how they will be implemented.  These events will offer practices the opportunity to ask questions to clarify understanding.   
 
Dates for these events will be published once we receive LSB approval.  In the interim, please ensure that you are subscribed to the CLC monthly newsletter as this is how we will be communicating about these important changes and the events we are planning.  You can subscribe to the newsletter here Council for Licensed Conveyancers 

  In the interim, if you have any questions or would like to discuss what is changing, please contact Catherined@clc-uk.org.  

On 26 June 2024, the Legal Services Board (‘LSB’) held a roundtable to discuss legal services regulation as it relates to the new economic crime Regulatory Objective and proposed new guidance on the implementation of Economic Crime Regulatory Objective which the LSB is proposing to publish.   

The new Regulatory Objective, ‘promoting the prevention and detection of economic crime’, was introduced by The Economic Crime and Corporate Transparency Act 2023 (’the 2023 Act’).  Economic crime includes committing, conspiring or attempting to commit, aiding, abetting or procuring the commission of the offences which are set out in Schedule 11 of The Economic Crime and Corporate Transparency Act.   

You can read a summary of the discussions that took place at the roundtable here.  One of the key points emerging from the roundtable was a recognition that economic crime extends beyond what we commonly think of i.e. anti-money laundering, and the expectation that there should be a step-change in how regulation is used to address the broad spectrum of activities that fall within the definition of economic crime set out in the 2023 Act.  

The CLC has set clear requirements and publishes extensive guidance which aims to mitigate the risks around anti-money laundering, fraud and other economic crime, but consistent with LSB expectations, are considering what further steps we can take to comply with the new Regulatory Objective.  We will continue to keep you updated as the LSB progresses with the proposed new guidance.    

CLC hails successful PII renewal round as more insurers enter the market

All of the CLC’s regulated firms, across both conveyancing and probate, have successfully secured professional indemnity insurance (PII) coverage for the year ahead.

The announcement coincides with the release of new research from law firm Browne Jacobson and the International Underwriting Association, which suggests that licensed conveyancers pay a median premium that is around 3% of their annual turnover, compared to 5% for solicitors.

The PII market has seen significant hardening over recent years, with firms reporting difficulties securing cover in previous renewal rounds. However, this year the CLC saw two new entrants to the market – Probitas Syndicate 1492 and XS Assure Limited. They join existing participating insurers, Chubb, IGI, Amtrust and Liberty Mutual.

Claire Richardson, deputy director of authorisations at the CLC said: “Existing CLC practices and those looking to switch regulation to CLC will benefit from the improved competition and flexibility in the market.

“We have seen firms offered better terms and more competitive pricing because of the increased options. As a result, firms are choosing their insurer based on service rather than solely on the premium offered. Further, the growth in insurers’ appetite to enter the CLC market is an indication of the overall positive performance of CLC practices.

“If conveyancing and probate specialist firms are considering switching to CLC regulation, they should contact us at least three months beforehand to enable the process to work smoothly across the various in-year PII and licence renewal points.”

The announcement coincides with the release of new research from law firm Browne Jacobson and the International Underwriting Association, which suggests that licensed conveyancers pay a median premium that is around 3% of their annual turnover, compared to 5% for solicitors.

In 2022 the Legal Services Board approved changes to the CLC’s participating insurer agreement, which came into effect for the 2023 renewal season. These changes included firms being obliged to submit at least one application for professional indemnity insurance (PII) two months ahead of the renewal deadline. Similarly, insurers receiving applications must respond no less than one month before the deadline, on 1 June, in a bid to reduce the risks involved when firms and insurers take renewal right up to the 30 June cut-off.

In a market where there is never any shortage of talking points, upfront and material information was the dominant theme of the Council for Licensed Conveyancers’ annual roundtable. It followed National Trading Standards implementing in full the rules on the information sellers need to provide when they put their property on the market.

Sally Holdway, CEO of tech company Teal Legal, predicted that a third of estate agents will engage with the rules, a third will think about it and a third will ignore them. The property portals will be big drivers of this and are starting to adapt their systems, as will evidence of Trading Standards enforcing the rules.

The big question raised by the need to gather this information is whether conveyancers can become involved earlier in the process. Certainly, Trading Standards is advising they should be.

Ms Holdway said: “We are not there yet but we’re starting to see that shift in where conveyancing starts, to be going from the point of offer to the point that the property is marketed and listed.”

Nicky Heathcote, chair of the Conveyancing Association, identified “nervousness amongst the conveyancing community” about how much this is going to put pressure on their workloads for no additional fee. “We are encouraging our conveyancers to think about what products and services they can provide and what to charge for it.” But there were also worries that upfront information could increase conveyancers’ liability.

Ms Heathcote also chairs the compliance committee of the Property Codes Compliance Board and recounted how some search providers are coming up with products that have enough information to meet the new rules. They later provide a full version that includes all the information that searches provide now.

Rob Gurney, a former licensed conveyancer and managing director of tech company Ochresoft, said the frustration for lawyers who want to embrace material information is that they are relying on others, such as estate agents and introducers, to advise sellers to instruct them. “The shift needs to be, ‘If we think there is a benefit in the lawyer being instructed at the point of listing, which there clearly is, how do we make that happen?’”

Henry Hadlow, co-founder of Juno, a digital conveyancing firm regulated by the CLC, said estate agents he worked with were often keen to see the lawyer instructed when the property was listed. “I agree with the nervousness around upfront information, because the search providers are saying, ‘Here is the information, but you cannot rely on it’, and if it is coming from the estate agent, as a law firm we cannot rely on it.”

Reliability is the core issue. Eponine Pearce, risk manager (property risk) at Nationwide Building Society, said upfront information “could absolutely change the way that we lend and underwrite and the way you apply for mortgages. But until we know it is accurate and we can rely on it, nothing is going to happen”.

This goes to the provenance of data and the push for data standards across the market. Angela Hesketh, the head of market development (UK) at PEXA, pointed to the work of the Open Property Data Association and others in working to create this and build a trust framework so that anyone in the process can rely on the information they receive. “We are gathering pace with that at the moment,” she said.

Law firms also need to be wary of unregulated providers coming into the market to provide material information services. As Sally Holdway pointed out, it is not a reserved legal activity. “It is the greatest opportunity for lawyers to get involved early, but it is also one of the greatest threats. We are seeing a bit of a land grab from unregulated providers collating the upfront information, saying, ‘Okay, if we can capture that instruction from day one, then we will have control over where the rest of the transaction flows to’.”

Mark Montgomery, chief strategy officer at Simplify, observed how, in practice, “lots of the people who are digitising information are then outputting PDFs because that is what the recipients want. It goes from being non-digital to digital to non-digital, and any provenance and metadata that would go with it at that point is lost. You are limited in what you do with it beyond that point because, without proof of the source, it is harder to trust it.”

“There is this big structural shift that is needed in the sector to say, ‘It is going to be data, and we have to get everybody on board to deal with it as data and get rid of all these PDFs’. We need to stop talking about forms especially and talk about data capture processes and data sets instead.”

One issue with the Trading Standards requirements, he went on, is that the information they demand is to help the average buyer make a decision on a property. “If the answer to why are we doing this is in order to make the transaction work really well for the consumer, that is not necessarily the same information as defined by Trading Standards. I wonder whether we are asking ourselves the right question, which is, ‘How does the system become better? What information truly needs to be upfront in order to do that?’ How, then, can you sell the outcome of that not just to the professionals, but to the consumer themselves?”

Beth Rudolf, director of delivery at the Conveyancing Association, responded: “By embracing the proactivity that material information enables, conveyancers can gather title, full searches and property information and review it for their seller client to identify issues which can be resolved. For the consumer and all stakeholders, this would be a win as it will enable faster certainty and reduce transactions that fail due to delay. 

“If the provenance of the information gathered upfront can be verified, then that is a win-win, as it takes out the duplication. Whilst we want to move to digital data, as Mark suggests, if I got a PDF of the HMLR title document and a search pack from a regulated search provider, then I would accept them now – why would that change?”

Another issue is that, while much of the information required is functional and factual, some requires proper investigation and interpretation. It may be, suggested Mike Harlow, deputy chief executive and director of customer and strategy at HM Land Registry, that artificial intelligence (AI) could have a role here.

He recalled: “For different reasons, we threw a lot of leases into a large language model. I asked the sorts of questions that I would have asked of them as a lawyer, such as ‘Does this lease have an escalating rent review provision?’. It answered them all correctly. Consumers are faced with a lot of information that is unfamiliar and not worded with them in mind. If you could ask questions about a property and get answers that respond to the language in your question, then a consumer could be much better informed and therefore could make a much more committed buying decision. That is not the same needs as a lawyer has in advising prior to contract, of course.”

The profession is still at an early stage in addressing the liability issues thrown up by AI. Sally Holdway mentioned how ChatGPT now cites sources when asked to give legal advice, “which generally speaking are law firms’ websites and information that they are providing just from a marketing point of view”.

“There is an open question, when a client goes ahead and makes some kind of a legal decision based on that, of where the liability sits. We come back to the question of regulation, and none of these AI technology businesses are captured under the Legal Services Act, and so there is just not the safety net from a consumer point of view.

“We are probably not quite in the eye of the storm yet, but there is a bumpy ride to get to the amazing opportunities for AI to plug the legal services gap and improve consumer outcomes. Our advice to our law firms is to be quite wary and, counterintuitively for a digital business, to be asking, ‘Do we need to start putting some manual steps in the process to mitigate the risk of things like deepfake?’”

Sam Jordan, chief operating officer at InfoTrack, said it uses AI in one of its post-completion products to highlight inconsistencies between the transfer documents and data about the property – it is then for the lawyer to go back and manually check what has happened. “That is as far as we and conveyancers are prepared to go at the moment.”

Neil Mullane, chief revenue officer at client due diligence platformThirdfort, agreed that it is still very early days for its use of AI. “For the kinds of ID checks we do, using the government-grade technology is critical – where we see risk is people not using that technology. It is very easy, when people are using old versions of ID technology, for people to take advantage of that.”

Beth Rudolf observed that there is already an ‘advicebot’ out there which takes a consumer through to a mortgage in principle. The technology was put through the exam for the Certificate in Mortgage Advice and Practice and passed with 78%, rising to 90% after the bot was re-trained. “The encouraging point is that, once the customer had their mortgage in principle, 50% wanted to go direct to the lender and the other 50% still wanted to use a mortgage intermediary. People still want the human touch but that can be supported by technology.”

Stephen Ward, the CLC’s director of strategy and external relations, said the regulator is in “a cautious place” with AI. “The human in the process is still vital, because you just have to validate the outputs – treat it like a newly qualified lawyer.”

His colleague Catherine Drennan, deputy director of policy and regulatory standards, added: “We do not want to be a blocker to the use of AI where it can be beneficial. The framework we produce will be permissive while saying, ‘If you are adopting AI, these are the sorts of safeguards that you need to be thinking about’. Without hindering its use, we need to wisely put some parameters around its adoption, so that people consider the risk.”

Rob Gurney suggested that AI has the potential to be a “great leveller” – if the technology is available to all, “the differentiator becomes service”. He continued: “The way in which AI needs to be adopted in the profession is as an efficiency tool. It is not taking the liability away from the law firm. Therefore, the practitioner will always have to approve the output. If some or all of that work is automated, it just becomes an efficiency tool.”

Mark Montgomery said these tools will allow the focus of conveyancers to shift onto managing the service, the customer and the relationships. “I think that is going to be a big adjustment over a period of time, particularly for those people whose identity is steeped in, ‘I am an expert and I like checking stuff’. That role and expertise will continue to be needed but on a narrowing set of activities and cases.

“Alongside that is the progression path for people within firms – if some of those tasks that were traditionally done by junior staff, as part of their training, are now done by technology, how do you get people in at the right level to grow the sector? I do not think that is clear yet. That is a real challenge for us as a sector.”

Stephen Ward agreed that new processes and tools will “change the centre of gravity of the work”, moving away from the paperwork and on to “getting to know the client, understanding their intended use and enjoyment and advising them on that in relation to this particular property transaction”.

He went on: “It is going to change the nature of the job in a really positive way. It should be changing the way that law firms are recruiting as well and who they are looking for in those roles. I am pleased that our educational pipeline has grown and has a really diverse intake. Employers should think about putting their unqualified people through the CLC training. It is a great way of making your business more resilient.”

Another issue debated at the event was holding client money in light of a significant default at a solicitors’ firm last year that is set to cost that profession dearly. The only real alternative at the moment is a third-party managed account (TPMA), but take-up has been slow among both CLC firms and those regulated by the Solicitors Regulation Authority, despite both regulators encouraging their communities to investigate it.

According to Ed Boal, head of legal at Shieldpay, the main TPMA provider, there is a commonly held belief that “operating a client account gives legal teams control, and that control is a good thing”. He said: “This perceived ‘control’ is not always a good thing, because with it comes the responsibility and additional burden of complying with the rules, auditing, contributions to the compensation fund, costlier indemnity insurance, cybersecurity risk, and anti-money laundering compliance. These are not things that law firms were established to have to deal with. They are there to advise their clients and provide a legal service.”

Nicky Heathcote suggested that the high rates of interest firms received last year on client money helped some survive the fall in transactions. There are other initiatives, like the Bank of England synchronisation project on settlement payments, which would reduce client account interest too. “Rightly or wrongly, some conveyancers have based their business model on having an income stream from that interest.”

At the same time, said Angela Hesketh, many compliance officers at firms would be happy to wave goodbye to the risks inherent with client account.

Stephen Ward said: “We see so many problems with client accounts and the risk of being a victim of fraud is significant. It is much reduced if you use one of these other tools. At the moment, we’re not looking to mandate a move away from client accounts but, as tools become more easily accessible, we will be doing more and more to encourage firms to remove those risks from their practices.”

More broadly, conveyancers around the table were positive about work levels, with Henry Hadlow saying that the volume of sales leads and instructions have “ticked up quite a lot”. At Simplify, said Mark Montgomery, activity in the first quarter of 2024 was 105% compared to pre-Covid. “If it could just stay at that level, that would be lovely. The thing that we crave more than anything is some stability to allow us to plan and manage volume.”

Eponine Pearce described the lending market as “a fickle beast at the moment” but noted that lenders are starting to move up the “risk curve”.

As CEO of comparison website Reallymoving, Rob Houghton has a good overview of the market. “It is currently reasonably strong. We also see what impact that has on prices. If you take a five-year view, pre-Covid, everyone was saying conveyancing prices were too low.

“When the stamp duty holiday hit, we saw a massive increase in prices, as you would expect when there was a limited capacity. Over the last few years, that has gradually eroded and come down again, although it is not as low as it was pre-Covid. In the last six months, as the supply has picked up, prices have gone back up, and they are now back to the level they were at the peak of the stamp duty holiday time.

“This sounds great, depending on the perspective you have, of course, but adjusted for inflation, that is quite a big drop because that peak was 2021. We have had three years of pretty high inflation since then, so it is probably about a 20% drop in real terms since the peak. Prices are now probably not far short of where they were pre-Covid.”

Many firms want to see prices higher, he said, but it is “a competitive market and massively fragmented, so it is hard to achieve that”.

Stephen Ward stressed the role of transparency in this. “Law firms have placed most emphasis on complying with the requirements around presenting the fees, and not enough on the other element of describing your service clearly to the potential client. Doing so would give them the chance to set out the value of that service more clearly, differentiate themselves from other providers and attract the right type of client.

“The sector has to be able to price more robustly because, as a regulator, we are concerned when we see prices going down too much. How can you do all of the due diligence to the standard that is required to protect your client, to protect the lender and to make sure that you are giving the Land Registry an application of the right quality, if you are not funding that work sufficiently? There is a real concern for us there.”

Eponine Pearce urged firms to adapt their practices and recognise that different people need different things. “One size does not fit all in conveyancing. People should be able to choose the level of advice that they get.”

At last year’s roundtable, Mike Harlow had described HM Land Registry’s efforts to reduce the backlog of work that it faced in the wake of the market peaking. Key to this was the largest recruitment and progression exercise the organisation had ever gone through, with hundreds of staff trained to move from simpler to more complex casework.

So, has it worked? “The age of the oldest cases has come down significantly,” he said. “We have been working on that basis because those are the most problematic cases for conveyancers. Our output is now substantially and consistently beating our input.

“It is not over, but we have the capacity to cope now and so expect an increase in the speed of service. That is not based on whizz-bang technology, but we are now looking to make sure that that never happens again. That is where technology should hopefully take over and make sure that we don’t have a repeat next time there is a spike in the market.

“There has always been a backlog created by a spike in demand, because otherwise you would have to have too many people sitting around waiting for that once in a 10 or 15-year event.”

Some around the table said the industry recognised the efforts the Land Registry had put in but had yet to see it really bear fruit.

Mr Harlow replied: “Whether you are seeing progress at the moment depends on what work you do. If you were a commercial firm, you would be seeing more progress. That’s because you would have had a worse impact, in fairness, so your cases would have been considerably older. You will now be seeing that progress because those cases are the more pressing ones we are dealing with.

“As a result of this focus on the oldest cases, you might be seeing slightly slower turnaround on the simpler cases. The macro picture is progress, but individual experiences will differ.”

 

Download the Consultation Paper

 

Find out more and respond online

 

The CLC’s Practice Fee contribution rates, together with the Individual Licence fees and other administration charges are reviewed annually to ensure that revenue collected through these charges is sufficient to cover the forecast expenditure for the next financial year.

Each year in June, CLC regulated practices renew their Professional Indemnity Insurance (PII). As part of this process regulated practices are required to provide turnover figures to the CLC. The turnover declarations are used to calculate the practice fee payable for the next licensing period which runs from November to October.

The Council of the CLC reviews the forecast and proposals prepared by management and if necessary, makes changes to fee rates and/or expenditure to ensure there are sufficient financial resources available to the CLC to deliver its business plan and statutory responsibilities.

The proposed fee rates are then consulted on and interested parties have an opportunity to comment on the fee proposals for the next licensing year.  This document sets out the consultation on fee proposals for the year November 2024 to October 2025.

After considering the responses received and if necessary, amending the proposal, the Council of the CLC will agree an application to be made to the LSB for approval.

 

Regulatory and administrative fee proposals for 2024 - 25

For the next licensing year beginning on 1 November 2024, the CLC is proposing to make the following changes to the fees charged:

    1. Practice Fee rates will be increased by 9% (The last amendment was in 2023 when the fee rate was increased by 9%). This follows several years of fee rate reductions which reduced fee rates by 60% between 2017 and 2022.
    1. The OLC Levy cost allocation formula will be changed so that 50% (currently 70%) of the cost is allocated to all regulated practices as a service availability charge. The remaining 50% (currently 30%) of the cost will be allocated to practices as a usage charge based on the number of cases accepted for investigation by the Legal Ombudsman. This is intended to provide a stronger incentive for the small number of firms that generate disproportionate levels of referrals to the Legal Ombudsman to reduce those consumer complaints.

The CLC is proposing that the following fees remain unchanged for the next licensing year:

    •  Compensation Fund Contributions (The contribution rates were last amended in 2020, when they were reduced by 60%).
    • Individual License Fees remain unchanged (last amended in 2010).
    • Administration and application fees (Last amended in 2023).

 

Why this consultation is important

Because the CLC is funded by the Practices and Individuals that it regulates, it is important that they and other stakeholders have an opportunity to review and comment on the source and application of the funding to ensure the burden on Practices and Individuals is proportionate while ensuring that the organisation has sufficient resources to execute its business plan and statutory objectives to protect consumers and the public interest.

The international Financial Action Task Force (FATF) has made some changes to the countries which are on the “grey list” (those subject to increased monitoring)

Bear in mind that the UK list of high risk jurisdictions now mirrors the FATF lists so CLC practices will now need to ensure that Enhanced Due Diligence (EDD) is applied when a client is “established” in a High Risk Third Country which means for an individual being resident in that country (not just having been born there) and for a company/legal person that means being incorporated in or having its principal place of business in that country.

 Practices should make sure their policies are up to date. The changes are:

Use the Anti-Money Laundering Toolkit

The annual publication brings together a list of the biggest risks faced by the CLC’s regulated community, which emerge during the regulator’s monitoring and inspection work throughout the year, along with advice to help practices stay on the right side of compliance.

Areas covered in the 2024 edition include anti-money laundering, sanctions, conflicts of interest, the Accounts Code, post-completion work and complaints handling.

Post-completion work is a new addition to the Risk Agenda this year. It is becoming a growing concern for the CLC as these failures are sometimes only identified years later, causing significant risk, stress and delays to consumers and other interested parties.

While there may be delays at HM Land Registry, these are made worse by slow or sloppy title change applications from conveyancers. The Risk Agenda says: “The data that the CLC receives from HM Land Registry on requisition rates gives cause for concern that some practices are not taking their responsibility seriously or are using HM Land Registry to check their work rather than making an effort to ensure that it is accurate to begin with. 

“Some seem to treat post-completion matters as an afterthought as it is undertaken after they collect their fee. The reality is that clients have been charged for this work and there is an obligation to perform it promptly and with diligence. Taking the fee and not completing the work is a breach of the Accounts Code and demonstrates a lack of integrity.”

An absence of post-completion processes could also be feeding into the problem identified for the first time last year of failures to comply with undertakings. The CLC has recently published a new Advisory Note on the subject.

“While we understand that sometimes an individual breach is due to the action/inaction of a third party – such as a lender or management company – the CLC is increasing its activity on this issue and tracking practices where we are seeing repeated or systemic breaches,” the Risk Outlook says. “Problems can emerge from practices not having proper processes in place post-completion or even to provide undertakings in the first place.”

The CLC will this year be reviewing the Complaints Code in light of new guidance from the Legal Services Board and also conducting a deep dive on complaints handling in 2024, focused on those practices that are responsible for a disproportionate number of referrals to the Legal Ombudsman (LeO).

Complaints handling is important in and of itself but practitioners need to remember that it also impacts on the cost of regulation; last year it made up just shy of £1m of the CLC’s budget of £3.56m, even though more than six in ten CLC practices do not generate complaints to LeO.

CLC chief executive Sheila Kumar says: “The good news for consumers is that licensed conveyancers are dedicated professionals who our monitoring shows provide excellent services under often stressful circumstances. But trip wires abound in the modern legal landscape and the Risk Agenda is part of our work to ensure the lawyers the CLC regulates not fall over them.”

Given the nature and focus of the services which CLC practices offer and their risk profiles, as well as events such as the war in Ukraine which has highlighted the flow of suspicious money from high-risk jurisdictions into the UK property market, there is a heightened scrutiny in relation to the measures CLC practices implement to safeguard against being exploited by criminals.

Inspections and monitoring of CLC practices between 2021 and 2023 revealed consistent concerns about how source of funds and source of wealth are scrutinised, as well as how these concepts are understood and implemented. The purpose of this advisory note is to address those concerns and provide some clarity in this critical area.

Read the Compliance Notice

Use the Anti-Money Laundering Toolkit

We have recently been informed of a CLC practice that has been the subject of an incredibly sophisticated fraud on their client account resulting in loss of a significant sum.  The fraud was committed over the telephone. 

Fraudsters purporting to be from the practice’s bank called leaving a number and asked the practice to return their call. On returning the call the practice was told that restrictions had been placed on their office account because ‘the bank’ had noticed a suspicious attempt by an energy company to take a payment.  Consequently, ‘the bank’ had placed restrictions on the practice’s office and client accounts, which they explained, meant that the practice would be unable to receive or process payments. 

To reinstate the ability to make and receive payments on their account, the practice was asked to log onto a portal, details of which were provided by the person on the call.  In a very polished scam, the practice used the portal to log into their online account, entering their pin several times.  This enabled the fraudsters to access the account and make several payments in quick succession, resulting in significant financial loss for the practice.

This is a stark reminder of the fact that we are all susceptible to fraud, and fraudsters are becoming ever more sophisticated, presenting their ruses in a manner that is very convincing, even to those of us who are alive to the ever present risk of fraud.  

We strongly encourage you to reflect on this example and review your existing anti-fraud measures.  Consider how your practice might have responded in this situation.

We recommend providing fraud awareness sessions for all staff and making use of the anti-fraud resources available from your bank and other organisations such as ActionFraud  and TakeFive (which is helpful for educating clients about what they can do address fraud risks). 

There is more information in our Cyber Crime and Fraud Toolkit.

We are writing today to the designated complaints contact in each CLC-regulated firm asking them to provide information about complaints handling in their firms.

Below you will find the text of the full survey so that you can gather the information that you need before you begin completing the questionnaire online.

 

CLC Complaints Handling Survey June 2024

On 16 May 2024, the Legal Services Board (LSB) published their policy statement on first-tier complaints (https://legalservicesboard.org.uk/wp-content/uploads/2024/05/First-Tier-Complaints-Policy-statement.pdf). This policy sets outcomes and expectations which aim to ensure that legal services regulators use learning from intelligence gathered through first and second tier complaints to drive improvement in complaints handling across all legal services.

As a reminder, first tier complaints are complaints made by a client to an authorised person regarding the service delivered by the practice, and second tier complaints are those made by a client to the Legal Ombudsman under the rules of the Office of Legal Complaints (LeO). If a complaint has not been resolved by a practice within 8 weeks, the Legal Ombudsman may accept it as a second tier complaint.

Against this backdrop, the CLC are gathering data to understand more about the nature and scale of first tier complaints and how practices manage complaints. The data you provide will inform the CLC's policy and regulatory work, including, amongst other things, a review of the current Complaints Code and related guidance, with the aim of improving complaints handling across the sector, in the interests of consumers and practices alike.

Please note that we are collecting some identifying data (our name, job title and your practice) but any reports or briefings that may subsequently be published using data from this survey will be published in anonymised form.

Thank you for taking the time to complete this survey.

 

* Required

 

  1. Your name *

 

  1. Your job title *

 

  1. The name of your practice *

 

  1. Does your practice have a complaints policy? *

 Yes No

 

  1. Does the policy name the person to whom complaints should be made? *

 Yes No

 

  1. If no one is named in the complaints policy as the designated contact, where are complainants directed when they wish to make a complaint? *

 

  1. Who is responsible for investigating first tier complaints (complaints made by a client to an authorised person regarding the service delivered by the practice) received by your practice? *

 

 the fee earner

 the team manager  the HOLP

 an independent person or dedicated internal complaints function

Other (please specify below)

 

 

  1. If you selected 'other' above, please specify who usually investigates first tier *

 

  1. Does your complaints policy provide an avenue for an internal appeal or review if clients remain dissatisfied after being informed of the outcome of their initial complaint? *

 Yes No

 

  1. If your complaints policy provides for an internal appeal or review, who usually undertakes it? *

 

 the fee earner

 the team manager  the HOLP

 an independent person or dedicated internal review/appeal function

Other (please specify below)

 

 

  1. If you indicated 'other' above, please specify who undertakes the internal review*

 

  1. Who usually investigates matters when clients have referred their complaint to the Legal Ombudsman as a second tier complaint? *

 

 the fee earlier

 the team manager  the HOLP

 an independent person or dedicated internal complaints function

Other (please specify below)

 

  1. If you selected 'other' above, please specify who usually investigates complaints that have been referred to the Legal Ombudsman as second tier complaints. *

 

  1. Do staff who are responsible for handling or investigating complaints receive training on complaints handling? *

 

 Yes, regularly  

Yes, occasionally

No

 

  1. When you receive a new instruction, do you provide clients with information clearly explaining how they can make a complaint should they wish to? *

Always  Never

Sometimes

 

  1. When providing clients with a response to their complaints, do you advise them of the right to escalate their complaint to the Legal Ombudsman? *

Always  

Never

Sometimes

 

  1. If a client expresses dissatisfaction during the course of their matter, do you advise them of how they can make a complaint should they wish to? *

Always  

Never

It depends on the circumstances or what the client's concern is

 

 

  1. Does your complaints policy offer vulnerable clients and those with protected characteristics the option of making a complaint other than in writing? *

 Yes No

 

  1. Do you adjust the way you handle complaints from vulnerable clients or clients with protected characteristics to accommodate any needs they may have? *

 Yes, where a need is identified in discussion with the client we will make any necessary adjustments

Yes, we take a view on their needs and make any adjustments that we consider necessary

No

 

  1. Does your practice keep a complaints log? *

 Yes

No

 

  1. Is the complaints log reviewed to identify common systemic issues or themes? *

 Yes, regularly

 Yes, but only from time to time

No

 

  1. Does the log record complaints received from vulnerable clients or those with protected characteristics? *

Yes, if we have identified that the client is vulnerable or has a protected characteristic Yes, but only if the client informs us

No

 

  1. Did your most recent review of the complaints log reveal common systemic issues or themes falling into any of the following categories (choose all that apply) *

 post-completion  delay

 failure to keep clients informed  failure to progress client matters  excessive cost

 inadequate or deficient upfront costs information

 failure to advise and/or advise falling short of expectations  conduct (of the lawyer or anyone else in the practice)

 failure to follow client's instructions  Data Protection breach

 failure to keep papers/documents safe  failure to investigate complaints internally  failure to comply with agreed remedy

 discrimination

 allegations of criminal activity other (please specify at below)

 

  1. If you selected 'other' above, please specify what the other systemic issues or themes were identified in the most recent review of your complaints log.

 

  1. Between 1 April 2023 and 30 April 2024 what was the total number of first tier (complaints made by a client to an authorised person regarding the service delivered by the practice) complaints made to your practice? *

 

  1. Of the first tier complaints made to your practice between 1 April 2023 and 30 April 2024, how many were resolved within 28 days of the complaint being made? *

 

  1. Of the complaints resolved within 28 days, how many resulted in an offer of redress? *

 

  1. Of the offers of redress that were accepted by clients, how many were actioned within 28 days of being accepted?

 

  1. Of the total number of first tier complaints received between 1 April 2023 and 30 April 2024, how many took longer than 28 days to resolve?

 

  1. Does your practice have a backlog of unresolved complaints i.e. complaints received prior to 1 April 2023 which are yet to be resolved? *

 

 Yes No

  1. Please specify what the backlog is e. how many unresolved complaints are there? *

 

  1. Does your complaints policy make provision for an internal review or appeal? *

 

 Yes No

  1. If your complaints policy makes provision for an internal review or appeal, how many of the complaints received between 1 April 2023 and 30 April 2024 were reviewed or appealed? *

 

  1. Have all complaints that were internally reviewed or appealed between 1 April 2023 and 30 April 2024 been resolved? *

Yes

No

 

  1. Please specify the total number of unresolved appeals or reviews? *

 

  1. Of the total number of first tier complaints made to your practice between 1 April 2023 and 30 April 2024, how many were escalated to the Legal Ombudsman? *

 

  1. Between 1 April 2023 and 30 April 2024, what was the total number of second tier complaints (complaints to the Legal Ombudsman) made about your practice? *

 

  1. Of the total number of second tier complaints about your practice that were made between 1 April 2023 and 30 April 2024, how many did the Legal Ombudsman determine were premature (i.e. received by the Legal Ombudsman before 8 weeks of the complaint being made to your practice)? *

 

  1. Between 1 April 2023 and 30 April 2024, how many second tier complaints resulted in the client receiving a remedy?*
  2. Between 1 April 2023 and 30 April 2024, how many second tier complaints resulted in an adverse finding about failure to investigate a complaint properly or at all, failure to progress a complaint, failure to resolve a complaint, or any other adverse finding regarding complaints handling? *

 

  1. How would you rate the CLC's current Complaints Code 9https://www.clc-uk.org/wp- content/uploads/2017/12/181206-Complaints-code.pdf) and Guidance (https://www.clc- org/wp-content/uploads/2024/05/2024-05-28-Complaints-Guidance-V1.1-Revised-to- reflect-LeO-Address-Change-1.pdf) *
  1. If you feel that the Complaints Code or Guidance could be improved, please explain why and detail the specific changes you would find helpful or most like to see in future.

 

  1. Are there any issues emerging from the questions in this survey which you would like to see addressed in a revised Complaints Code or Guidance, if so, please provide details.

 

  1. Do you have any other comments or observations regarding the LSB's May 2024 Policy Statement on First Tier Complaints (https://legalservicesboard.org.uk/wp- content/uploads/2024/05/First-Tier-Complaints-Policy-statement.pdf) and what you would like to see the CLC doing to meet the outcomes and expectations outlined in the statement?

The UK payments industry is moving to ISO 20022, the global standard for payments messaging (the data that attaches to financial transactions enabling interoperability between banks, financial institutions, and clients).  

ISO 20022 and legislative changes planned for this year will see the implementation of several new and much needed security and anti-fraud measures in the banking sector and these will impact anyone using systems such as CHAPS.  

We urge you to start planning now so that your practice is well prepared for seamless integration, and that you and your clients are able to benefit from the enhanced fraud protection these measures will deliver. 

Find out more

This article highlights important legislative changes that CLC practices working with charity clients need to be aware of. 

On 7 March 2024, a tranche of new Regulations were brought into effect by The Charities Act 2022 (Commencement No. 3, Consequential, Saving and Transitional Provisions) Regulations 2024 (legislation.gov.uk).

Among other changes, these Regulations bring into effect several provisions which will affect charities in England and Wales that are selling, leasing or otherwise disposing of charity land.  These changes include provisions relating to:

Both HM Land Registry and The Charity Commission have published guidance  (please see HM Land Registry Practice guide 14: charities and Charity Commission Guidance CC28) to help you understand the new provisions. 

We strongly encourage practices working with charities to review this guidance and ensure that they have understood the rules and how they apply to charities that are selling, leasing or otherwise disposing of property.

The CLC has issued a new Advisory Note on Breaches of Undertakings in response to increased referrals of breaches.

Find out more

Find out more

11th April 2024.

Find out more

A website at this address: https://conveyancingsolicitorsmanchester.uk/ is wrongly holding itself out as representing a practice regulated by the CLC.

Neither Conveyancing Solicitors Manchester nor JB Conveyancing Solicitors Manchester, which is also referred to on the website, is regulated by the CLC.

Practices and individuals regulated by the CLC can be checked using the CLC Secure Badge, which will pear on their website, and by checking the CLC’s online register.

To help us understand how we can improve the uptake of digital processes and ensure that we get the benefit of upfront information, the Digital Property Market Steering Group needs your views on the creation of a Digital Property Information Protocol.

Respond to the short survey now   

The Protocol, which you can see in draft in the survey, would set out the roles and responsibilities of all stakeholders in the adoption of digital property information and digital solutions across all sectors, ensuring there is better certainty for all involved in the home buying and selling process. 

Those who have collaborated in the collection and delivery of upfront information have seen transaction times halve and failed transactions plummet. Staff and customers are happier, and risk is reduced as the upfront information provides a reliable and single source of truth about a transaction. 

Would a Digital Property Information Protocol help your teams learn what is available to them and what they can expect from other people in the process?

Let us know what will help you educate staff and customers and ensure that everyone can collaborate effectively for faster, more secure and less stressful home moving transactions. 

Please take this opportunity to improve property transactions by completing the survey – and send it on – the bigger the range of input, the better.  

Unless you choose to leave your contact details, the survey is anonymous – your responses will not identify you or your firm. Our research is undertaken in line with the Market Research Society Code of Conduct. The survey should take around 5-8 minutes to complete. 

Take the survey now

The survey closes at midnight on 1 April 2024 

The CLC urges conveyancers and anyone else using HM Land Registry to respond to this new consultation on the organisation’s future fees and charging structure.

You can find more information on gov.uk and responses can be submitted here.

The consultation seeks views on supporting the land and property information agenda and encouraging innovation through better and open access to HM Land Registry data, modernising the fee structure and ensuring fees are fair and reasonable.

HM Land Registry says that simplifying fees and charges will support the delivery of its Strategy 2022+ which sets out a vision for a world-leading property market as part of a thriving economy and a sustainable future.

The call for evidence closes at 11:59pm on 5 April 2024.

Share your views now

Do you charge VAT on disbursements for search fees, for example when invoicing clients for the cost of Land Registry or local authority searches that you have undertaken in relation to their matters?  

We know that historically, many firms did not charge VAT in respect of payments made for electronic property searches, Land Registry searches or for obtaining copy documents from the Land Registry. It was generally accepted that these fees were a disbursement and therefore not subject to VAT.

However, case law has taken a different view and in light of two cases (see BrabnersLLP v the Commissioners for HM Revenue and Customs and BritishAirwaysPLC  v J Prosser) so we are reviewing existing guidance.  In the interim, we encourage you to read the case law (see also below) and review your current invoicing procedures and if need be, seek tax advice about your VAT treatment of search fees.

Short, anonymous survey

To get a sense of how practices treat search fees for VAT purposes, we would be grateful if you could answer this very short, anonymous survey consisting of eight simple yes or no questions. Please complete the survey by midday on Monday, 8th April.

Complete the short survey

The Case Law

The First Tier Tribunal Tribunal in the case of BrabnersLLP concluded that electronic property searches formed part of the overall legal service that was being provided to the client.  In other words, the search report informed the legal advice and professional services the client was paying for, meaning that it was not a disbursement and was liable to VAT.  The second case is a non-binding decision of the Court of Appeal [see BritishAirwaysPLC  v J Prosser] which followed a similar approach, albeit in relation to fees for obtaining copies of medical reports. 

Our expectation is that with few exceptions, you will be conducting searches to inform the advice and the professional services that your clients are paying for.  Even in those cases where search reports throw up nothing of significance and you can advise your client to proceed as intended, the search will have informed the services you are providing.  As such, fees for those searches form part of the overall professional service to your client and attract VAT. 

What does this mean for you

We will be reviewing our guidance, and any new or revised guidance will be communicated to you in the usual way.  In the interim, we would encourage you to read the case law, review the VAT treatment of disbursements in your practice and if need be, seek advice from a Tax specialist before reaching a decision about any changes to your invoicing procedures.

You may find it helpful to refer to the HMRC Internal Manual covering search fees VAT Taxable Person at 47000.

Should you wish to discuss this, please contact your Regulatory Supervision Manager

If you have not already done so, we would be grateful if you could answer this very short, anonymous survey consisting of eight simple yes or no questions.

Complete the short survey

The CLC has published its Annual Report on 2023, which demonstrates that the CLC’s approach to regulation:

Find out more

Join us in person on the morning of 1st February from 0930-1230 in Central London for insight and information from the CLC and a group of industry experts.

We will hear from Baroness Penn, Parliamentary Under Secretary of State in the Department for Levelling Up, Housing and Communities on the government’s priorities for transforming home buying and selling.

The tools and approaches for delivering conveyancing and probate services are changing fast, bringing new opportunities and of course new risks. This short conference will help you prepare your firm for the future.
The consumer, data, tech, and marketing experts we are bringing together will help you understand how to make the most of those opportunities:

You will also hear from the leadership of the CLC about the work of the specialist regulator:

Who should attend?

Book your free spot now

Conveyancers are shouldering an ever-increasing weight of responsibilities but remain hesitant about increasing their fees, the annual market roundtable hosted by the Council for Licensed Conveyancers (CLC) has heard.

Participants – drawn from across the conveyancing world – also discussed how understanding where data comes from is critical to the push for upfront information as a way to speed up the process.

In debating poor communication between lawyers and clients, the roundtable recognised that clients not really understand the conveyancing process, which has held back moves to increase fees.

Peter Rodd, the residential conveyancing representative on the Law Society council, argued that prices have become even more distorted as more responsibilities are loaded onto conveyancers.

“We now have the question of climate. To what extent is the conveyancer going to be responsible to their clients for advising on those issues and the possibility of flooding? There was a suggestion a few years ago that we should tell people about the cleanliness of the air in their area. None of that is legal, but it is all getting pushed towards the conveyancer, because, at the end of the day, the conveyancer is the one who is insured and takes responsibility.”

This in turn extends transactions, because the case law is clear that conveyancers cannot just supply the information to the client – they have to explain its significance too, Rodd added.

Rob Gurney, a former licensed conveyancer and current managing director of Ochresoft – part of Landmark Information Group – said Landmark estimated that conveyancers’ responsibilities have doubled in the last 15 to 20 years, while at the same time modern consumers expect far greater speed. “The expectation of the consumer is impossible to meet, whereas, 15 to 20 years ago, we could meet it.”

Many conveyancers are itching to increase their prices but remain worried about the impact. Again, they need to explain what they do and ensure the communication is clear. “Be brave and charge for the work that you do,” said Paul Bennett, a law firm adviser at Bennett Briegal. Those who have increased fees by relatively modest amounts initially “have gone on to raise those fees again and again over the coming years”.

CLC strategy director Stephen Ward said it was “the value proposition that has been underpriced”. He explained: “Lawyers have found it very difficult to describe to their clients the value of what they do. You can list out the prices, but what is the value? It is the confidence that you own the place that you think you own, and that you understand everything about it that is relevant to you so that you can use and enjoy that property intended.”

Much of this led back to perhaps the hottest topic in conveyancing right now – upfront information. Beth Rudolf, who is part of the upfront information working group of the cross-industry Home Buying and Selling Group, said: “All the bits are there, but the problem is that we have no mandation – yet.”

For Mike Harlow, deputy chief executive of HM Land Registry, the core challenge was digitising the data and ensuring it could flow through into everybody’s systems. Change would then flow from the availability of digital data and the tools to make efficient use of it, without mandation. But others said lawyers needed reassurance that they could trust such data.

Other issues discussed included the impact of a slowdown in work, recruitment issues in conveyancing, and Land Registry delays. To read the full write-up of the event, please click here.

CLC chief executive Sheila Kumar said: “We have been on the precipice of significant change in the property market for a long time now and some are frustrated that we are still only looking over the edge. But we are getting closer and it was striking how most of those round the table now largely agree on what needs to be done.

“The CLC is part of the Digital Property Market Steering Group that brings together regulators and representative bodies of conveyancers, estate agents, lenders and valuers to drive the transformation of home buying and selling. We are committed to playing our part and ensuring that conveyancers can deliver simpler, faster, more secure and more certain property transactions that maintain the high standards of consumer protection that we are known for.”

You can read the full report here.

The conveyancing sector is currently experiencing some disruption to transactions arising from a cyber incident affecting a supplier to legal services providers.

As well as keeping their own clients informed of any disruption to their matter in relation to such incidents, we expect any directly affected CLC-regulated practices to ensure that they have alerted lawyers acting on the other side of any relevant transactions. This openness is vital for limiting as far as possible disruption and consumer harm.

The CLC also expects that any affected firm will inform its Regulatory Supervison Manager.

We urge all CLC-regulated practices to review the support and advice available in the Cybercrime and Fraud Toolkit on our website.

ReviewSolicitors is an established comparison website in the legal sector. Along with others, it has access to the data about CLC-regulated entities, published by the CLC for use by comparison websites. That is basic data about practices’ locations and contact details.

A number of CLC-regulated practices have contacted the CLC following approaches from ReviewSolicitors. Those practices have inferred that the CLC is working with the site or that CLC firms are required to join the site.

The CLC does not require practices to work with any particular comparison website, though we believe that they can be a good way to reach potential clients. You can find out more in the report on our research into the use of quality indicators and comparison websites and we will be taking forward more work on this in 2024.

Simply Conveyancing Property Lawyers (East) Limited (SCPLE) was acquired by Simply Conveyancing in late 2021.

SCPLE will cease trading on 30 November 2023. Clients with transactions due in the days prior to the closure (including Friday 24th November) will not be impacted, and the completions will be undertaken by SCPLE as expected.

All clients with active matters will have been contacted by Simply Conveyancing advising them of the next steps, including the option of transferring their file to Simply Conveyancing. All files transferred will progress without interruption and the named lawyer will not change.

Post-completion matters which still have their registration pending with HM Land Registry will be transferred to Simply Conveyancing’s dedicated Registrations Team.

Clients who do not wish for their file to be moved to Simply Conveyancing can instruct an alternative Licensed Conveyancer or Solicitor of their choosing.

All enquiries should be directed to east@simplypropertylawyers.co.uk or by phone to 01733 427790.

The CLC has launched a consultation on a proposed new Code of Conduct following last year’s consultation Ethical Principles.

Read the consultation document and respond.

In June, the CLC required Alexander Grace Law Limited to enter a managed closure process. Urgent conveyancing matters were handed over to Stephensons Solicitors. For the less urgent matters, clients were offered the choice of instructing another practice or firm to take over their transaction. Most clients chose to have their work conducted by Amity Law, which is a CLC regulated practice. Those live transactions have proceeded as expected.

Alexander Grace undertook to finalise outstanding post-completion matters.  The CLC has been monitoring how that work has been progressing.

As a result of our concerns, the CLC has today intervened into Alexander Grace and taken direct control of the business.

Post-completion work for clients is now being carried out by Stephensons, (clcenquiries@stephensons.co.uk, 0333 344 4775). They will be contacting clients to secure their instructions to continue with that work. Clients have the option to instruct another lawyer of their choosing.

The finalisation of post-completion work will be at no additional cost to the client.

Find out more

Join the CLC’s Regulatory Supervision Managers at four cities around the UK this November for an update on compliance issues.

The team will be looking at some key issues for CLC lawyers, including anti-money laundering, the CLC’s monitoring programme, the CLC’s 2023 Risk Agenda, complaints handling, the evolution of conveyancing and probate and taking your questions.

At each venue we will also be joined by cyber expert Nic Miller of Aedile Consulting for an in-depth look at evolving cyber risks for law firms.

20 November – London

21 November – Bristol

27 November – Leeds

28 November – Liverpool

These are all morning roadshows and the timetable at each will be as follows:

0900                    Registration

0930                    Cybersecurity – learn from expert Nic Miller of Aedile Consulting

1030                    Transforming conveyancing – Stephen Ward, Director of Strategy

1100                    Comfort break

1120                    Best practice takeaways from our monitoring and enforcement – Amy Hayes, Deputy Director of Regulatory Standards

1210                    AML and Sanctions – Sebastian Harrison, Deputy Director of AML and Sanctions

1300                    Close

Find out more and book

Training provider MOL has webinars coming up for potential students and their employers all about their course that leads to qualification as a Licensed Conveyancer.

You can register at the links.

06/09/2023Everything you need to know about Conveyancing Law and Practice
10/01/2024Everything you need to know about Conveyancing Law and Practice
24/04/2024Everything you need to know about Conveyancing Law and Practice

There’s much more information about become a CLC-Regulated Lawyer, specialising in conveyancing and/or probate in the Trainee Lawyer section of of our website.

As the specialist property and probate regulator, the Council for Licensed Conveyancers (CLC), has always monitored and engaged with the PII market closely to understand how it well it delivers effective consumer protection and supports a thriving legal sector. The CLC is in close contact with the insurance brokers that are signed up to the CLC’s Participating Insurers Agreement, Millers, Howden, Marsh and Hera. Since moving away from a master policy in 2016 the CLC has seen its participating insurers grow from one insurer to five. Most recently the insurer Liberty Mutual Insurance Group Europe SE joined alongside AmTrust, IGI, Chubb, and Arch.

Following the launch in 2022 of a revised and strengthened CLC Participating Insurers Agreement and Minimum Terms and Conditions, 2023 saw a 100% compliance for all terms issued to CLC practices. This level of standardisation is good news for CLC practices, and is evidence of the productive meetings held by CLC with brokers and insurers in the months leading up to and during the PII renewal period.

This year, practices reported feeling more confident about shopping around for best value premiums and more reported improved competition in this year’s market. This seems to be supported by the growing numbers of practices changing their insurer of choice following two years when we saw little movement. An improved choice of insurers has also been a welcome development for specialist probate practices, who have in the past seen less choice of insurers. The improved mix and balance of insurers will also be more attractive to businesses thinking about transferring all or parts of their existing business into CLC regulation.

In recent years, practices with less than two full years trading history had told us that they found changing to an alternative insurer more challenging than more established practices did. This year however, we saw no real indication of this. Indeed, practices were able to obtain terms irrespective of their type of business structure, or the length of time that they had been trading. As you would expect, those practices with less well managed claims histories, or with a history of engaging in high-risk areas of work, were less likely to attract terms quickly. CLC practices are already alive to the risk of accepting work that is outside their area of expertise. Maintaining robust controls around this and keeping records of transactions that show sound judgement and technical expertise, seems likely to be a continuing theme for insurers.

This renewal round saw the introduction of a requirement on Insurers to notify practices of any intention not to renew terms a minimum three months in advance of the 30 July deadline. The CLC introduced this requirement to ensure that affected practices would have a reasonable and practical period to seek alternative PII or trading arrangements to protect the interest of their clients. Practices also utilised the new provision to purchase up to 90-days extended cover if necessary to secure terms or make alternative business arrangements. This helped practices managing planned closures and mergers to focus on the needs of clients and the completion of any advanced transactions, and transfers of instructions in realistic and achievable timeframes. This ensured a much more controlled approach at what can be a challenging time for practice owners and staff.

Each year, Insurers reflect on their risk appetite and 2023 has seen discussion stemming from the requirements of The Building Safety Act 2022. The CLC has been pressing the government to ensure that there is greater clarity over roles and liability in the implementation of the Act, which is aimed at ensuring that buildings that are affected by cladding issues following the Grenfell tragedy. We have been encouraged to see some insurers conduct evidence gathering exercise over a twelve month or so period, to help them assess where there is perceived, and actual risk based on an improved understanding of the typical trading profile and transaction risk appetite of CLC practices. This seems to be a proportionate approach which would not see liabilities fall automatically to property lawyers.  While lawyers need to gather and explain information about a property to clients, it is for other experts to make and report on their judgment of the safety of the property.

We plan to provide more analysis of this year’s PII renewal round in the coming weeks.

This is now published on our website with information about fee-setting, disciplinary action and much more.

Read the report

The CLC is consulting its regulated community as it proposes changes to its current practice fee rates. 

The CLC is proposing to increase practice fee rates by up to 10%, while individual practicing fees will remain unchanged. The last amendment was in 2021 when the fee bandings were improved to better reflect practice turnovers and reduced its rates by 23%. 

Fee rates are calculated based on turnover data submitted to insurers each June when CLC regulated practices renew their Professional Indemnity Insurance (PII). The CLC uses these turnover declarations to calculate the practice fee payable for the next licensing period which runs from November to October.  

This year, for the first time since 2009, the CLC has seen the aggregate practice turnover fall by 4%. This means that the revenue received from practice fees will also decrease. At the same time, the costs and requirements of oversight regulators are on the rise. This year, the Legal Services Board estimates a 21% increase and the Office for Legal Complaints an 18% increase in their charges to the CLC’s regulated community. The CLC must collect these amounts, over which it has no control, from the regulated community. 

The CLC is proposing a freeze on contributions to its Compensation Fund and its Legal Ombudsman (LeO) levy allocation. In September 2021, the CLC stripped out the cost of Legal Ombudsman from practice fees and moved to recharging firms based on complaints numbers. The LeO levy is now collected separately in two parts: a basic availability fee that all firms pay in recognition of the importance of LeO to consumer protection, and a usage fee based on the number of cases from a firm that have been accepted for review by LeO.  

Sheila Kumar, Chief Executive, said: “We have worked hard over many years to keep our costs as low as possible whilst developing our regulatory role proportionate to risk and in the consumer interest. Since 2016, we have reduced the practice fee contribution rates by 61% and our Compensation Fund contributions by 60%.  

“The CLC will need to run a surplus budget to maintain and grow reserves to protect against future uncertainty and business needs. We understand the financial pressures that everyone is facing and the CLC is not immune from these. The work we have done in previous years to implement a cost effective, scaleable and flexible regulatory model means the increase will have only a small impact on an individual practice but taken together will enable us to continue to be the regulator we need to be. 

“Because the CLC is funded by the practices and individuals that we regulate, it is important that they, and other stakeholders, have an opportunity to review and comment on the source and application of the funding. This helps to ensure the burden on practices and individuals is kept to a minimum while ensuring that we have sufficient resources to execute our statutory objectives.“ 

The practice fee contribution rates together with individual license fees and other administration charges are reviewed annually to ensure that revenue collected through these charges are sufficient to cover the forecast expenditure for the next financial year. The Council of the CLC reviews the forecast and, if necessary, makes changes to fee rates and or expenditure to ensure there is sufficient resources available to the CLC to execute its statutory responsibilities. 

The proposed fees are then consulted on and interested parties have an opportunity to comment on the fee proposals for the next licensing year. After considering the responses received and if necessary, amending the proposal, an application is made to the LSB for approval.  

The consultation can be accessed here and will run for six weeks, closing on the 8 September 2023.

Alternatively, respondents can complete a short form survey here. 

The CLC's annual Risk Agenda brings together a list of the biggest risks faced by the CLC’s regulated community, which emerge during its regular monitoring and inspection work throughout the year, along with advice to help practices stay on the right side of compliance.

Areas covered in the Risk Agenda 2023 include anti-money laundering, conflicts of interest, sanctions, the Accounts Code and complaints handling.

Breaches of undertakings are a new addition this year. “This is of significant concern; the property transfer system will break if conveyancers do not adhere to undertakings,” it says. The CLC intends to run a webinar on the issue later in the year.

While neither the CLC nor its disciplinary committees has power to direct the specific performance of an undertaking or to direct the payment of compensation to a third party, the breach of an undertaking may lead to disciplinary proceedings.

The Risk Agenda warns: “The CLC is escalating its activity on this issue and tracking practices where we are seeing repeated or systemic breaches.”

Elsewhere, conflict of interest issues were also identified as CLC-regulated practices are allowed to act for more than one party to a transaction with informed written consent, although each party must be represented by different fee-earners operating as though they were members of different entities. The fee-earner does not need to be a licensed conveyancer or other authorised person, but their direct supervisor does.

There is obviously a heightened risk of conflict of interest in such situations and the CLC requires that people of an appropriate level of seniority handle the matters to ensure they recognise any conflict that may arise.

“However, we have seen examples of unauthorised individuals with inadequate supervision handling such transactions. This is not acceptable,” the Risk Agenda says. “If the nature of a practice’s structure means it cannot meet the requirements for acting for both sides in a transaction, then they must not take on the second client.”

The CLC Adjudication Panel last year reprimanded and fined a licensed conveyancer who failed to inform clients in three matters that she had been asked to act for another party in the transaction. And she was the sole conveyancer in the practice, meaning she would personally be undertaking the work.

She believed she was acting in both clients’ interests by doing so as the transactions would proceed more quickly. The panel found there was “no way” in which the potential conflict could be surmounted in such a situation.

On AML, and particularly checking the source of a client’s funds, the CLC says that, while some other regulators advise a risk-based approach, it believes that the higher risk associated with conveyancing means that practices must undertake source of funds checks on every transaction.

The Risk Agenda also outlines concerns that conveyancers are often not undertaking matter-based risk assessments because they do not perceive a transaction to be risky. “In the conveyancing sector, which has been assessed as high risk in the National Risk Assessment of 2020, this is not good enough – you have to show you have considered the risk and then used that assessment to decide what level of client due diligence you will undertake.”

It adds: “The CLC is concerned that matter-based risk assessments are too often not being done or not comprehensive enough. We are now looking to move to disciplinary action for practices where we have identified a pattern of failure.

CLC Chief Executive Sheila Kumar says: “Conveyancers are at the frontline of the battle against economic crime and as a result the pressures on them are considerable. This latest iteration of our Risk Agenda looks to pinpoint the particular problems we are finding in this and other areas of practice and explain how best to resolve them.

“This is core to the CLC’s approach of assisted compliance: working with practices to identify and address risks before they crystallise as harms. This collaborative approach to achieving compliance is a unique strength of the CLC model and is successful in resolving the vast majority of issues that we find.”

Alexander Grace Law (AGL) is undergoing a managed closure and will formally close at the end of this week. Clients with transactions due to complete this week (including Friday 30 June 2023) will be undertaken by AGL and do not need to do anything further.  

Clients with transactions due to complete in the week commencing 3 July 2023 will be advised to instruct Stephensons Solicitors (who are regulated by the Solicitors Regulations Authority (SRA)) and be asked to complete and return a letter of Authority to AGL for Stephensons to act for them. They will be contacted by Stephensons over the next few days and taken through their standard on-boarding procedures. After this their transaction will progress uninterrupted.

AGL will be working to ensure that all other transactions continue without interruption and have already written to clients advising them of their next steps. This will include the option of instructing the CLC-regulated business Amity Law . Any client who wishes to instruct Amity Law will be asked to complete and return a letter of Authority to AGL. They will then be contacted by Amity Law and taken through their standard on-boarding procedures. After which their transaction will progress uninterrupted.

Clients will be able to choose whether to follow those arrangements or instruct another conveyancer or solicitor of their choosing. In which case, it is likely that clients will be signposted back to their original referrer (estate agent or mortgage broker), who will be best placed to assist them in choosing a new law firm.

Clients with a post completion query about an application that is still with the Land Registry should email postcompletion@agllegal.co.uk where there is a dedicated team working on these matters.

The CLC is monitoring the closure carefully and will act to ensure that client interests are protected.

Together with the other legal sector regulators we have today published new guidance on Chinese funds and underground banking.

Find out more

Increasing the proportion of qualified lawyers to unqualified fee-earners in your practice helps to reduce risk and improves practice generally. It demonstrates to the CLC, lenders and others that there is a commitment to quality and high standards.

The apprenticeship and traditional study routes both great ways to upskill existing staff.

Find out about approved training providers.

During National Conveyancing Week, MoL will be running a webinar all about the retaining process that lead to qualification as a CLC lawyer.

Potential students, apprentices and employers can find out more in a webinar on Wednesday 22nd March at 12.00.

The registration link is now live on MOL Conveyancing

We have been made aware of what appears to be a scam or malware email purporting to be from a firm named David Hill & Co. Solicitors which claims to be regulated by the CLC.

The CLC does not regulate a firm by that name.

The email address of the sender of the email seems to be ecaballero@cyamex.com

Chair’s Report from Dame Janet Paraskeva

This was the Council’s first meeting of 2023 and there was a busy agenda. We had hoped to welcome members of the Legal Services Board for a face to face joint board session and hope that this can be rearranged soon.

Competence

Setting standards for entry to the profession and maintaining high standards of competence after initial qualification is the foundation of regulation to protect consumers and the public interest. At this meeting the CLC reviewed four sets of proposals that are central to that standard-setting and maintenance.

Ethical Principles

The Council reviewed the outcome of the consultation on draft ethical principles for CLC lawyers. Those draft principles have been revised slightly in the light of very helpful responses to the consultation from the CLC’s Consumer Reference Group, the Legal Services Consumer Panel, and the Society of Licensed Conveyancers.

The new draft Ethical Principles now read as follows:

  1. Act with integrity, honesty, and independence
  2. Know each customer, treat them fairly, keep their money safe, communicate openly and truthfully with them and act in their best interests
  3. Uphold the rule of law and public trust in the profession and legal services
  4. Maintain high standards of professional and personal conduct
  5. Collaborate openly and truthfully       with regulators, ombudsman, and other legal professionals
  6. Promote and support equality, diversity and inclusion in practice, service delivery and dealings with clients

These principles will inform reviews of qualification standards, expectations for ongoing competence and the details standards set out in the Code of Conduct for CLC lawyers and indeed the entire handbook. A draft revised Code of Conduct is being prepared for further consultation

Qualification as a CLC lawyer

The CLC sets the standards for qualification as a CLC lawyer, the delivery and assessment of education to those standards is carried out independently of the CLC. Numbers of students have grown in recent years, but the sector still faces a shortage of qualified lawyers. The Council was therefore asked to consider some proposals for increasing the pipeline in addition to the marketing that is already taking place in collaboration with the education providers. Further work will not continue to identify new routes to qualification as a CLC lawyer.

Continuing Profession Development

Our consultation on new and significantly more demanding requirements for CPD closed shortly before the Council meeting. The Council reviewed consultation responses and agreed that work should now begin to set out detailed arrangements for a new CPD framework that will include some mandatory elements for individuals in certain roles in firms. It will also see a move away from a fixed number of hours per year to individuals taking responsibility for demonstrating how their CPD has met their particular development needs.

Changes to licence periods

The Council considered a proposal to align the licence period for CLC-regulated lawyers and practices to three years. This would not affect the annual fee payment cycle. This alignment could have practical benefits for licensing, monitoring and enforcement work by the CLC. A public consultation paper is being developed and will be reviewed by our Consumer Reference Group and Professional Reference Group prior to publication.

The work of the CLC

Council was able to review the CLC’s progress against the business plan at the end of the year. We were very pleased that 95% of the business plan activities had been delivered and the remaining 5% is on course for completion in 2023. We will publish a full report on 2022 during February.

Our strategy for 2023-2025 is published on our website as well as our business plan for this year. The Council also approved a budget for the year to deliver that business plan which enables the CLC to reduce costs slightly compared to the actual outturn for 2022.

We also reviewed the performance of our communications work in 2022, which continued to grow the CLC’s presence and impact in relevant media outlets. Our plans for 2023 include more face to face activity such a roadshows and possibly a conference following a focus on online activity for obvious reasons in recent years.

Monitoring, enforcement, and discipline

Council reviews quarterly updates on this activity, ensuring that operational performance is maintained in the programme of monitoring and enforcement and examining the progress of serious disciplinary cases that are in train using the internal Watchlist. The Council was very pleased to note that two serious matters were reaching their conclusions with hearings at the Adjudication Panel in January and February.

Transparency

The meeting had begun with consideration of the Legal Service’s Board’s (LSB) Regulatory Performance Assessment of the CLC and the other front-line regulators. This was an important chance to look in the round at steps the CLC could take to meet suggestions from the LSB about changes to the way that we set out how we make decisions.

At the moment, the CLC sets out the reasons for decisions when we communicate them to the regulated community and stakeholders. Our reasoning and evidence are set out in consultation documents, press releases, direct communications such as our newsletter, webinars and roadshows.

To help those interested in the CLC’s decision-making process, the Council decided to explore possible changes to the way its proceedings are reported. That will include a review of the impact of publication of all policy development papers (which will now include input from our Consumer Reference Group), potential additions to the contents of minutes and links back to formal minutes from my report of each meeting.

The Council had already agreed last year that anyone who wishes may apply to attend Council meeting as an observer and request a copy of a Council paper that is not already published in full on the CLC’s website. This is reflected in our updated Publication Scheme.

We currently publish full findings of the Adjudication Panel, Enforcement Determination Notices and Letters of Rebuke but not other, lower-level, enforcement decisions of which there are many each year. As we have often explained, publication of lower-level sanctions that are imposed with no recourse to the Adjudication Panel would damage the assisted compliance approach the CLC takes and that serves consumers so well. A new report will be prepared looking at information about such lower-level sanction in aggregate and looking at trends.

Informed Choice

The CLC lead work to improve consumer information since the report from the Competition and Markets Authority on the legal sector in 2016. The aim for the CLC, SRA and CILEx Regulation was to enable easy comparison between providers by setting shared standards for the information that practices are required to publish about price and service. More recently, the same group of regulators has been looking at the scope for further use of quality indicators and how to extend consumer use of comparison websites that make comparison even easier. A report with further actions will be published later this year.

It is good to see that this work is delivering change. The Legal Services Consumer Panel (LSCP) found, in its 2022 tracker survey that many more consumers are now shopping around for legal services, as this chart from their report shows.

In the autumn of 2022 LSCP has recently published two reports setting out proposals for the extension of information available to help consumers make better-informed choices of legal service provider, notably here: Standardisation of Consumer Information In Legal Services. The Council of the CLC reviewed progress on the Informed Choice agenda and the new suggestions from the LSCP alongside the LSB’s Statement on Consumer Empowerment.

Given the progress that has been made on consumer empowerment in relation to conveyancing and probate, the Council is of the view that the priority for action in the consumer interest in the conveyancing sector has changed.

Achieving the significant improvements to the home buying and selling process that are now in reach will deliver greater consumer benefit than incremental changes to consumer information about providers.

The learning from what has been achieved in relation to consumer information on conveyancing and probate services could be reviewed and applied to other legal services.

ends

The Legal Services Board (LSB) needs to focus on improving customer information in more pressing areas of practice than conveyancing, where there is already significantly more information available than in other areas, the Council for Licensed Conveyancers (CLC) has said. The conveyancing sector, it says, must concentrate on the transformation of the home buying and selling process that promises very significant consumer benefit.

Responding to the consultation on the LSB’s draft 2023/24 business plan, the CLC said the LSB should be clear about what it intended to prioritise in its “broad and ambitious agenda”.

“The most pertinent example for the CLC relates to the consumer empowerment agenda. There has been a strong focus on conveyancing and probate services. This was a very sensible place to start because of the volume of both those services and their highly commoditised nature which perhaps lends itself more easily to a data-driven approach to aiding consumer choice of provide.

“Having made very significant progress in these two areas, there are now lessons that may be applied to other legal services where the need for better consumer information is surely more pressing, even if more difficult to achieve because of the nature and delivery model of those services.

“Indeed, it may be those very features that make the need for better consumer information more urgent.”

The response explained how the sector was closing in on “a shared vision of a transformed conveyancing process”. Over the coming years, this was “likely to be more beneficial to the consumer than incremental gains in consumer information”.

The CLC said the LSB could have an important role, helping to ensure that the sector is confident about the use of new technologies, remarking that the “new workstream should ideally be designed to stimulate further links / discussions, to support a stronger and shared understanding of how regulators can learn, respond to and apply rapidly evolving new technologies.”

CLC chief executive Sheila Kumar says: “The CLC would welcome a better sense of the relative priorities of the LSB’s very ambitious agenda. The conveyancing sector needs to be able to focus now on delivering a faster, more secure conveyancing process that gives consumers greater confidence and certainty.

“We are also concerned that there is only passing mention of the LSB’s role overseeing the Office for Legal Complaints (OLC). It is vital for consumers and the sector that the OLC delivers its recovery plan and has a clear approach to reducing its costs, which are ultimately passed on to the consumer.”

Firms will be aware of the rising risk of cyber attacks, and the current challenge facing the Royal Mail (which may well have also  affected your or your clients’ operations). All legal firms naturally hold sensitive data, making them an increasingly attractive target for cyber criminals. And conveyancers of course sometimes face additional risks due to the very high value of the transactions they manage. Many attacks are carried out by relatively opportunistic and unskilled individuals but can still cause widespread damage to operations, and reputations. Improving your firm’s technical profile and governance / training policies will help reduce that risk, and remove the easier entry points that cybercriminals scout for.

The CLC has been in discussions with the Law Society in Wales over winter on the growing issue of cyber protection. The latter have secured Welsh Government funding to offer firms with a head office in Wales a free, nationally approved course to improve their cyber security. In a collaborative project they have also kindly approved steps to rollout this funding (and process the applications) of other Wales-headquartered firms, under the same criteria.

The offered  ‘Cyber Essentials’ certification process has been reviewed and approved by the UK’s National Cyber Security Centre, and is being delivered in Wales by Pure Cyber. It proves a straightforward but effective government-backed scheme that will help firms to understand how they able to protect themselves –  and consumers – from a diverse range of some common cyber-attacks. At its core it will highlight the basic areas that  a firm needs to improve upon, and prioritise.

Aside from the direct benefits, some organisations are increasingly asked to obtain Cyber Essentials certification for contracts. Achieving it demonstrates to business contacts, consumers, insurers, staff and suppliers that your organisation undertakes the basic requirements of cyber security.

On a wider scale, it’s worth noting that related organisations often suffer a cyber breach due to hijacked emails from trusted contacts from elsewhere in their sector. So the more protection there are across those networks as a whole (whether conveyancers, solictors, or clients) the greater the indirect benefits can be for all the organisations in it. Alongside that, there is also the additional benefit of sending a yet stronger signal to cyber criminals that the conveyancing sector is taking further steps to safeguard itself, and those who rely on it.

The Process

https://purecyber.com/law-society

The CLC will shortly issue a Regulatory Return to all CLC-regulated practices. It asks for information on a range of activities over the last calendar year to help the CLC develop and focus its monitoring and compliance work. Managers should be able to answer the majority of the questions without research, but might need to collect some data on client complaints or staffing patterns, for example.

Managers can download a pdf of the questionnaire to help them prepare to complete the online version.

DOWNLOAD THE EXAMPLE QUESTIONNAIRE

The Regulatory Return must be completed online by February 6th 2023. Managers will receive a link to the questionnaire in the coming days.

The CLC has extended the fee waiver for CILEx lawyers converting to CLC regulation, until the end of April 2023.

More than 130 CILEx lawyers have begun the application process since the waiver was introduced in December 2022 and 42 CLC Licences have been issued already.

FCILEx lawyers who qualified in conveyancing and/or probate can apply to transfer to CLC regulation with no further training or occupational requirement, becoming either a Licensed Conveyancer and/or Licensed Probate Practitioner.

The process is straightforward and those who are successful will enjoy the benefits of being an Authorised Person under the Legal Services Act 2007 and will be regulated by a specialist regulator with rules, support and guidance tailored to conveyancing and probate practice.

The waived fee, which is normally £150, doesn’t include our standard, comprehensive DBS and screening check cost, which is less than £100.

Full-year individual licence fees, currently £400, will be calculated on a pro rata basis from month of approval until licence renewal on 1 November 2023.

Applicants will need to hold relevant practising certificate(s) free from conditions and be able to evidence their most recent full year of CPD. If applicants do not meet some of these requirements, we may still be able to consider applications on a case-by-case basis.

Begin your application now

How much can legal regulation be about prevention rather than enforcement? Is the current model favoured by most of the regulators too focused on disciplining wrongdoing, rather than more active engagement to stop it in the first instance and promoting ongoing competence? Which approach do lawyers best engage with?

The Council for Licensed Conveyancers recently held a panel discussion that looked at whether legal regulators have the balance right between before- and after-the-event activity, and what the profession itself believes is best. You can watch the full discussion here.

Stephen Ward, the CLC’s director of strategy and external relations, explained its approach of ‘assisted compliance’, in which the regulator seeking to collaborate with those it oversees to achieve compliance. “It’s not about us simplifying the rules or expectations. It’s about us helping the firms and individuals that we regulate to meet our expectations and the requirements of the law. We can also describe it as helping practices deal with issues before they cause harm to the client or public interest.”

He suggested this was sometimes misunderstood as the CLC being a light-touch, or even a soft-touch, regulator. “If there is persistent non-compliance or if actual harm has occurred, then we do use our disciplinary tools – assisted compliance isn’t a free pass to go on as you wish. In fact, our approach to regulation is quite intensive.”

Where there are compliance failings, the first step – unless there is an immediate risk to clients or the public – is to agree a plan to bring the practice back into compliance. “We always expect that plan to be completed within an agreed and generally quite a short, albeit realistic, timeframe. Where that isn’t achieved, disciplinary action could well follow.”

At the same time, this approach is aided by the size of the CLC’s regulated community – some 230 firms who each have a named relationship manager, albeit that between them they represent about 15% of all conveyancing activity in England and Wales. Mr Ward said: “We calculate that we cover double that level of activity and still operate the same intensive and collaborative model. It is scalable.”

The Solicitors Regulation Authority (SRA), on the other hand, already has plenty of scale. “There are added complexities when you regulate over 150,000 practicing solicitors in 10,000 plus law firms,” said Chris Handford, its director of regulatory policy. “It’s not just about the number, but also the differences between them, the different business models, size, provider types, the different areas and categories, activities, client types.”

“It’s worth remembering that most firms do want to get things right when we look at them,” he pointed out. “They are trying to do things correctly, or at least want to, but they don’t always succeed in that.” Though the SRA tries to maintain a balance between preventative and enforcement activity, it receives more than 10,000 reports about potential problems a year and has to deal with them, sometimes urgently. Around 2,000 are referred for investigation, of which about 100 a year lead to the ultimate stage of a referral to the Solicitors Disciplinary Tribunal.

Mr Handford said: “You can also often see cycles in regulation and the balances change over time. If you look into our history, there have been times where we were very heavily focused on supervision. And there have been times when we were very reactive and focused on just what came across the desk. We now have a much more sophisticated mix where we use horizon scanning – issuing risk outlooks, for example – risk targeting, and proactive visits or desk-based reviews, alongside enforcement work.”

Like the CLC, he said, “we will try and work with firms to bring them into compliance. Where we really go down the enforcement route is where there’s a will for non-compliance, or there’s a really big mess.” Though the largest firms have relationship managers, Mr Handford said there were no plans to extend the programme.

Sarah Debney has more experience of legal regulators than most, having worked in conveyancing for nearly 40 years. She has been a fellow of CILEX since 1995 before more recently qualifying with the CLC too so as to gain independent practice rights. She has worked at both CLC and SRA-regulated firms, and is now a member of the CLC council, a consultant conveyancer at Taylor Rose MW and a director of Hive Partnership.

“I found it really interesting moving back into an SRA-regulated firm from a CLC one because I’ve been used to having a working relationship with the regulator, whereas it felt very much more arm’s length in an SRA practice,” she recounted. This was, she recognised, in part “a size and scope issue” but she suggested too that the constant media reports of SRA disciplinary activity “perhaps doesn’t encourage firms to want to engage”.

She continued: “Having a regulator who understands your specialist area, knows your business model, your profile, your size, and takes a proportionate and pragmatic approach is very helpful, and that’s certainly been my experience of the CLC.

“They understand that some things can be difficult to prevent altogether, but equally, they’re easily rectified. They’re not deliberate or serious enough to need anything more than a conversation really to resolve. What they do expect, and I’ve certainly seen this, is that if you do come to their attention, you need to be honest and open about the circumstances that led to it. You need to apologise, do your best to resolve it quickly and keep them updated so that they can close off the complaint or, if necessary, become more actively involved. That seems a fair approach to me.”

Ms Debney’s ask for a regulator was one with “clear rules consistently and fairly applied” and a two-way relationship. “You need to feel confident that you can ask if you’re not sure without a fear of opening a can of worms. That’s particularly helpful in an outcome-focused regulation environment because the rules are less prescriptive, and so ultimately, they are more open to interpretation, which potentially leads to uncertainty or inadvertent mistakes.

“As to how you establish trust enough to have a relationship with your regulator, ultimately they’re not your friend, but I think it does require an assumption on the regulator’s part that very few people set out to deliberately flout or ignore the rules and, on the regulated community’s part, that the regulator isn’t there to catch them out or to set traps for the unwary. An effective regulator should need to take disciplinary action relatively rarely. The majority of things can be brought into compliance.”

Paul Bennett, a solicitor and partner at Bennett Briegel, where he specialises in legal regulation, talked about his recent experience with one of the smallest legal regulators, IPReg – the Intellectual Property Regulation Board, which oversees both patent and trade mark attorneys. Though a small community, IP lawyers’ work can have “multi-million-pound, often multi-billion-pound, consequences for clients if they go wrong”.

IPReg only has a handful of staff but nonetheless they have a similar assisted compliance and close relationship model with their firms. In return, the firms have “trust and confidence in their regulator and I actually think for the bigger regulators, that’s the bigger challenge”, Mr Bennett said. “How do you get the regulated community to want to approach you, to want to engage with you, to do that assisted compliance?”

He urged all the regulators to move to an assisted compliance model – “we have focused too much over the last decade on enforcement”. Rather than focusing on the tiny minority of lawyers who will have to be dealt with by disciplinary processes, Mr Bennett said “we should be focused on high standards of consumer protection through information, prevention, and building confidence in the regulators”.

Like the CLC, Mr Bennett sees real benefits in assisted compliance: “It really empowers businesses to thrive and their clients to get what they want from them. That ultimately is the purpose of legal regulation.”

This would be achieved by engagement and the regulators reaching out to their communities, Mr Bennett said. All regulators would say they already do a lot of this – t he issue is how to connect with those who do not engage with the guidance notes, blogs, webinars and events. One technique the SRA was trying, Mr Handford said, was more precise targeting of particular groups, such as a recent thematic review of immigration work.

Mr Ward agreed: “There’s only so much you can do with the proactive outreach, the newsletters, the events, and so on because it’s self-selecting who engages with that.” But what should regulators do when they contact firms and they still do not engage? And does the process take too long?

“We are very keen to treat lawyers and firms fairly,” said Mr Ward. “We want to give them the opportunity to come into compliance. Generally, the timetables we set for that are quite short, however. So we do take action pretty quickly, but the process has to be fair and so can take some time.”

Mr Handford said he hoped the SRA’s new regime for fixed penalties would help speed up the process and also identify potentially more serious non-engagement. It is to pilot a £750 fine for: failing to comply with the transparency rules; failing to provide information or documentation requested or required by the SRA, such as firm diversity data or a declaration of compliance with anti-money laundering requirements; and failing to ensure approval of role holders like compliance officers. A second offence within three years will lead to a £1,500 fine.

Mr Ward welcomed the role of technology in supporting compliance – both in ensuring the right steps are being taken in the progress of cases and also in ensuring a comprehensive record of each matter. Longer term, “it potentially offers a way for regulators to have even more intensive oversight of the delivery of legal services through being able to interrogate the systems to see to what degree the tools are being used properly, and policies and procedures are built-in and being observed, without taking up the time of the practice involved”.

He said: “It might seem a bit Big Brother-ish, and we would need to think about it to ensure consent, confidentiality, and so on, but it is an opportunity we need to explore with the software providers and lawyers.”

The panel debate was held via Zoom on Tuesday 22 November and you can view a recording of the event.

Watch now


Panel
Stephen Ward, Deputy CEO, Council for Licensed Conveyancers
Chris Handford, Director of Regulatory Policy, Solicitors Regulation Authority
Paul Bennett, Bennett Briegal LLP
Sarah Debney, Professional Council Member of CLC, Consultant Conveyancer at Taylor Rose MW and Director Hive Partnership
Chair: Neil Rose, Editor, Legal Futures

We have seen a fake email purporting to be from the Chief Executive of the CLC, Sheila Kumar. 

It did not come from a CLC address but from this address: offiuse25@gmail.com

Please let us know if you or any colleagues receive any similar fake email. 

Email us at CLC@clc-uk.org

The Council for Licensed Conveyancers (CLC) is proposing major changes to its Continuous Professional Development (CPD) requirements, moving towards an outcomes-focused approach.

In its latest consultation, the CLC sets out a new set of principles which will involve changes for individuals, as well as introducing a universal CPD requirement for CLC firms. These proposals will mitigate risks and continue to improve standards in the profession while enhancing consumer protection.

The proposals include  

The CLC’s proposals reflect a sector wide approach to CPD, highlighted by the recent LSB Statement on this issue which set clear outcomes that legal services regulators should meet to ensure that lawyers have the necessary skills, knowledge, and behaviours to provide good quality legal services.

CLC chief executive Sheila Kumar says: “We have been reviewing CPD for a while and have developed these proposals carefully to follow-on from the day one outcomes that are set for newly-qualified CLC lawyers.

“We believe that our proposed changes will reduce risks for firms and enable then to demonstrate competence and professionalism to clients, lenders and PI insurers more effectively. The revised framework, along with clear guidance, should also support a more transparent career route to key roles in firms as candidates will be able to evidence their suitability with more objective information.”

The consultation will close on Tuesday 6 January 2023. You can participate in the consultation by clicking this link to submit responses via its short form questionnaire or emailing responses to the long form questionnaire at consultations@clc-uk.org

Read the full report by Dame Janet Paraskeva

Firms regulated by the Council for Licensed Conveyancers (CLC) will not face any increase in application fees, licence fees and regulatory fee rates for the coming year.

The announcement follows an open consultation which ran over the summer and asked firms to respond on five areas, covering turnover bandings, Practice Fee rates, Compensation Fund Contribution rates, Office for Legal Complaints (OLC) levy and individual practice certificate cost.

All practices are required to pay the Practice Fee, OLC Levy and Compensation Fund Contribution as a condition of licence.

When we consulted on our proposals, respondents were in favour of not making any additional changes to the application fees, licence fees and regulatory fee rates that were set in 2021. Any change to what practices pay will be because the firm’s turnover has changed or the number of cases from the firm upheld by the Office for Legal Complaints (OLC) has changed.

In 2021 the CLC made significant changes to the fees levied on practices. These changes were implemented to ensure transparency and fairness. The changes implemented were:

  1. Increasing the number of turnover bandings from 4 to 9. This has enabled practices to benefit from lower fee rates as they grow.
  2. Reducing the Practice Fee rates and excluding the Legal Ombudsman charge from the Practice Fee, which has improved the transparency of fees as the funds are only used for CLC operating expenditure.
  3. Implementing a separate OLC levy to recover the cost of the Legal Ombudsman recharge. The CLC has no control over this charge, which is based on case numbers and costs provided by the Legal Ombudsman. The charge has increased significantly over the last five years, and separating it has increased transparency of costs and increased the focus on complaint handling.

CLC Chief Executive Sheila Kumar says: “We believe, as a proactive and engaged regulator, it is our job to ensure we fully understand the pressures our firms face and find ways to encourage them to continue to provide a quality, cost effective service to the public.

“We have cut Practice fee rates by more than half over the course of the last seven years, and Compensation Fund contributions have been cut by around half too.

“Against the background of inflation, this year’s freeze is a significant, real-terms cut in fees and fee rates. Keeping the financial burden of regulation to a proportionate level is a key element of the CLC’s commitment to supporting a thriving conveyancing and probate sector responsive to the needs of the client.”

The Legal Services Board approved the CLC Practice Fee application on 2 November 2022, the approval is published here.

Resorting to disciplinary action is a symptom of regulatory failure but ‘assisted compliance’ is not the easy option, the chair of the Council for Licensed Conveyancers (CLC) said today.

Speaking at the SLC annual conference in Derby, Dame Janet described assisted compliance – a collaborative approach to achieving compliance – as “a unique strength of the CLC model”.

She continued: “We can also describe that as helping you deal with issues before they become a real problem or cause actual harm to the client or public interest. We want to avoid as far as possible having to impose disciplinary sanctions. That is a symptom of failure of the process of client protection and our assisted compliance approach.”

The low number of disciplinary cases against licensed conveyancers should not be misunderstood as the CLC being a light-touch regulator, Dame Janet cautioned.

“Of course, if there is persistent non-compliance or actual harm occurs, then we have to move to our disciplinary tools. Our approach to regulation is intensive, involving as it does very close monitoring of the regulated community and close working with them to achieve compliance.”

But assisted compliance depended on frankness and candour on the part of lawyers and firms, Dame Janet said. Without it, “you will be much more likely to find yourself facing disciplinary action”.

Co-operation was also needed with the Legal Ombudsman (LeO), whose costs Dame Janet described as “eye-wateringly high” – last year, the charge to the CLC-regulated community was £655,000, even though only around 300 complaints reached it.

“We have been working hard to persuade LeO to take steps to reduce its costs. We are delighted that its pilot of ‘early resolution’ of complaints that look appropriate for settlement without investigation is being so successful.

“In some cases, complainants are told that their complaint has no merit or the offer from the firm is reasonable. In others, LeO recommends that the firm improve its offer slightly. This kind of quick action is a great approach and is how the LeO scheme was intended to operate.

“But it does need firms to cooperate with it. I am sorry that we see examples of a very small number of firms not engaging effectively or at all with the process. This is not in their interests as it will likely mean that resolving the complaint will end up costing more time and money than it needs to.”

Dame Janet used the speech to highlight the growth in the CLC community. Its collective turnover in 2020 was £277m, almost three time more than 2009/10, when the industry had recovered from the global financial crisis. It rose by an “astonishing” 26% to £349m in the year to April 2021.

“I hope it means that firms have a war chest to get them through what looks set to be a turbulent period for the global economy and we are advising practices to stress-test their business against the possibility of a downturn in transaction volumes.”

Dame Janet asked the SLC to consider what role it could play in addressing the challenges faced by conveyancing practitioners. “We simply must make progress to a more streamlined, faster, more secure approach to conveyancing in the client and public interest. We all need to move forward together down that road. And the CLC and the SLC have different and complimentary parts to play.

Dame Janet Paraskeva also urged the Society of Licensed Conveyancers (SLC) – as the representative body for the sector – to promote the profession to consumers.

Practices that did not keep up with developments “risk finding themselves left behind quite quickly”.

But there were limits to what a regulator could properly do. “The CLC simply cannot spend any money or resource promoting the profession to consumers. We need your help attracting new members of the profession and practices that might benefit from our specialist regulation of conveyancing and probate.

“The SLC has been very active in that field in the past and I ask you to redouble those efforts now. It is vital for the long-term health of the profession. We also need the SLC to be a partner in the work to ensure that CLC lawyers not only grasp but shape the opportunities of modernisation and digitisation of conveyancing and probate services.”

CLC chair tells profession: Don’t confuse ‘assisted compliance’ with light-touch regulation

Resorting to disciplinary action is a symptom of regulatory failure but ‘assisted compliance’ is not the easy option, the chair of the Council for Licensed Conveyancers (CLC) said today.

Speaking at the SLC annual conference in Derby, Dame Janet described assisted compliance – a collaborative approach to achieving compliance – as “a unique strength of the CLC model”.

She continued: “We can also describe that as helping you deal with issues before they become a real problem or cause actual harm to the client or public interest. We want to avoid as far as possible having to impose disciplinary sanctions. That is a symptom of failure of the process of client protection and our assisted compliance approach.”

The low number of disciplinary cases against licensed conveyancers should not be misunderstood as the CLC being a light-touch regulator, Dame Janet cautioned.

“Of course, if there is persistent non-compliance or actual harm occurs, then we have to move to our disciplinary tools. Our approach to regulation is intensive, involving as it does very close monitoring of the regulated community and close working with them to achieve compliance.”

But assisted compliance depended on frankness and candour on the part of lawyers and firms, Dame Janet said. Without it, “you will be much more likely to find yourself facing disciplinary action”.

Co-operation was also needed with the Legal Ombudsman (LeO), whose costs Dame Janet described as “eye-wateringly high” – last year, the charge to the CLC-regulated community was £655,000, even though only around 300 complaints reached it.

“We have been working hard to persuade LeO to take steps to reduce its costs. We are delighted that its pilot of ‘early resolution’ of complaints that look appropriate for settlement without investigation is being so successful.

“In some cases, complainants are told that their complaint has no merit or the offer from the firm is reasonable. In others, LeO recommends that the firm improve its offer slightly. This kind of quick action is a great approach and is how the LeO scheme was intended to operate.

“But it does need firms to cooperate with it. I am sorry that we see examples of a very small number of firms not engaging effectively or at all with the process. This is not in their interests as it will likely mean that resolving the complaint will end up costing more time and money than it needs to.”

Dame Janet used the speech to highlight the growth in the CLC community. Its collective turnover in 2020 was £277m, almost three time more than 2009/10, when the industry had recovered from the global financial crisis. It rose by an “astonishing” 26% to £349m in the year to April 2021.

“I hope it means that firms have a war chest to get them through what looks set to be a turbulent period for the global economy and we are advising practices to stress-test their business against the possibility of a downturn in transaction volumes.”

Dame Janet asked the SLC to consider what role it could play in addressing the challenges faced by conveyancing practitioners. “We simply must make progress to a more streamlined, faster, more secure approach to conveyancing in the client and public interest. We all need to move forward together down that road. And the CLC and the SLC have different and complimentary parts to play.

Dame Janet Paraskeva also urged the Society of Licensed Conveyancers (SLC) – as the representative body for the sector – to promote the profession to consumers.

Practices that did not keep up with developments “risk finding themselves left behind quite quickly”.

But there were limits to what a regulator could properly do. “The CLC simply cannot spend any money or resource promoting the profession to consumers. We need your help attracting new members of the profession and practices that might benefit from our specialist regulation of conveyancing and probate.

“The SLC has been very active in that field in the past and I ask you to redouble those efforts now. It is vital for the long-term health of the profession. We also need the SLC to be a partner in the work to ensure that CLC lawyers not only grasp but shape the opportunities of modernisation and digitisation of conveyancing and probate services.”

Read the full speech

The Council for Licensed Conveyancers (CLC) is making greater use of its enforcement powers as it looks to ensure it is a proportionate regulator, chief executive Sheila Kumar has said.

Meanwhile, CLC chair Dame Janet Paraskeva says it will step up efforts to encourage firms and lawyers from other parts of the legal profession to switch to CLC regulation.

The pair were speaking as the CLC’s consultation on refreshed ethical principles and the CLC’s new strategic objectives closed and a new consultation on Continuing Professional Development was launched. Those consultations are on the CLC website.

Ms Kumar says that the post-lockdown conveyancing boom did not lead to a growth in compliance failures. “We were very clear with our advice that firms should not take on more work than they could cope with, and the message seems to have got through,” she says.

“At the same time, we are working on ensuring that, when we do have to take regulatory action – and we’re talking about a small number of such actions relative to the number of firms and set in the context of the huge number of transactions CLC lawyers handle – we use the most appropriate of the range of regulatory interventions available to us.”

The first step in most regulatory matters – except where immediate action is required, in response to actual harm having already occurred or there being an immediate threat to clients – is what the CLC calls ‘assisted compliance’, meaning the CLC works with the firm to bring it back into line within a reasonable timeframe.  

Ms Kumar says that this timeframe is not infinite and requires a firm commitment by the practices to put things right. Years of experience of the assisted compliance approach has led in some cases for shorter timelines to be set for firms to achieve compliance. “In the past, there has sometimes been a tendency to go from assisted compliance to full-on enforcement, meaning it could take too long to ensure compliance. We are now making more use of the other powers we have, such as warning letters and Enforcement Determination Decisions, to speed up the process where firms are not moving quickly enough. It’s a much more calibrated approach that delivers the result that we need more quickly and proportionately.”

She adds that the CLC has intensified its monitoring and inspection of firms, with its regulatory supervision managers in regular contact with them to head off any potential problems, now supported by a new cadre of more junior regulatory supervision officers to deal with lower-level compliance work.

The CLC has been working for some years to encourage firms run by solicitors and legal executives to join its community and Dame Janet says that progress had been slow because of issues such as run-off cover and lender panels, as well as Covid. But these have now been resolved and the number is picking up.

“It’s about choice,” Dame Janet says. “We are not expecting a great rush but we are starting to see a slow and steady increase in switchers. We know the business of conveyancing. We know probate. If that’s what people need regulated, then we are best placed to provide it. We are also seeing a healthy pipeline of future conveyancers, with some 300 students now studying for the qualification.”

Further, a review of the CLC’s business processes has allowed it to deliver regulation more cost-effectively. As a result, the CLC has been able to reduce regulatory fee rates hugely in recent years. Practice fees have been cut by more than half and Compensation Fund contributions by around half, depending on practice turnover, thereby demonstrating the CLC’s commitment to effective and proportionate regulation and keeping the financial burden on the regulated community as low as possible.

On other issues:

The CLC has also been sharing the lessons from the Simplify security incident last year. Sheila Kumar says: “We had people on the ground at Simplify from the start and kept up constant communication to ensure clients’ interests were served. We remain comfortable that allowing the firm to sort out the problem was a better solution than the CLC stepping in – it was not a problem that we could have resolved any more quickly and, indeed, an intervention would have slowed down the recovery process and would not have been in the consumer interest.

“What the incident has done is shine a light on the vulnerabilities of any system, however good. We have issued advice to firms in our recent Risk Agenda and will continue to spread the word of what firms need to do to minimise the risk and consequences of such attacks.”

From stamp duty cuts to cyber-crime and the cutting-edge technology transforming the conveyancing sector, there was lots to discuss at the CLC’s first Twitter Q&A.

Stephen Ward, our director of strategy and external relations, was in the hot seat as we tried to cover off the issues most important for conveyancers and consumers.

For anyone who missed it, we’ve rounded up all the questions and answers below.

Q: How do you expect the recent changes to stamp duty to affect conveyancing?

A: The mere mention of stamp duty in the chancellor’s mini-budget will have filled conveyancers with dread after the unprecedented activity seen following the Stamp Duty Land Tax holiday in 2020/21. The key difference is this time it’s permanent though so we don’t expect a repeat. The same applies though – conveyancers should always be careful to manage workloads to maintain the highest standards of service and advice to clients.

Q: How do we know there won’t be another major cyber incident?

A: This is a huge concern for firms and the simple answer is we don’t. More than one in three businesses have been affected by cyber crime. A large law firm – not one regulated by us – was fined £98,000 by the Information Commissioner’s Office earlier in 2022 for failures that led to a ransomware attack. Criminals are using increasingly sophisticated methods. The important thing is that we learn from these incidents. We talk more about preventative action in our Risk Agenda.

Q: Given the rise in cyber attacks, how do you know that digital ID checks are safe?

A: Experts believe digital rather than physical ID checks are actually safer as well as being quicker and may cut fraud. The risk of human error is reduced, information can be encrypted and it negates the risk of physical storage and management of documents. One of my monthly blogs for What Mortgage was on this very issue. You can read it here.

Q: Why is it so difficult to get professional indemnity insurance (PII)? What are you doing about it?

A: The PII market has been hardening for some time, particularly for conveyancers, but the process is improving. Our experience in the last renewal round was better than anticipated and no one failed to get coverage. We recently introduced changes that we hope and expect will make the process easier in future and these are explained in our Risk Agenda. It is a process that will need to be constantly reviewed, however, and we will continue to do so as well as continuing to promote greater collaboration of education and information sharing from insurers.

Q: The CLC’s recent roundtable called for action from government to mandate reforms, but when is this likely to happen given everything else going on?

A: Government support is essential but the industry will continue to work towards making the necessary changes and will keep up the pressure as part of the Home Buying and Selling Group.

Thanks to everyone who took part in the discussion. We hope to hold further Q&As in the future to highlight our work and changes and developments in the industry. If you have a question and didn’t get chance to ask it, please tweet us @CLConveyancers using the hashtag #AskTheCLC or email externalrelations@clc-uk.org.  

The annual CLC stakeholder roundtable found that the property market continues to run hot – and that leadership is needed to ensure that the conveyancing process is modernised to cope

The period from the housing market reopening in June 2020 after the first lockdown and the end of the stamp duty holiday in September 2021 delivered an unprecedented surge in work for conveyancers. The chance to pause for breath since has only confirmed that the old way of operating needs to change.

The key questions at the CLC’s annual roundtable – attended by 14 practitioners and stakeholders – was what needed to be done and by whom.

Record year

Search Acumen’s analysis of Land Registry data found that conveyancers enjoyed their busiest year on record in 2021/22 – with around 600 law firms coming back into the market to help meet demand, taking the number of active practices back above 4,000 – with the average firm seeing a 60% rise in transactions.

Andrew Lloyd, managing director of Search Acumen, said fees also increased, making it “a bit more financially viable – I say that, rather than profitable – to be in conveyancing”. Rob Houghton, chief executive of reallymoving, suggested this was a “normalisation” rather than an inflation: “There is a good argument that fees were too low before lockdown anyway.”

Eponine Pearce, risk manager (property risk) at Nationwide Building Society, said it had an interest in fee levels to the extent that they threatened a conveyancer’s ability to do a good job. “This is something we are trying to look at from a panel management perspective: ‘Well, actually, you might be the cheapest, but are you the best for extending our brand, because that is what we are asking you to do?’” This could lead to lenders’ large panels being somewhat pruned to reflect the quality being seen.

While these returning firms helped the market flex, they brought problems with them. Mrs Pearce said the number of often quite simple queries it received from conveyancers during the pandemic “just skyrocketed”. Sally Holdway, director of legal technology specialist Teal Legal, said both the “manic element” of the workload more generally and a lack of experience among returning firms both increased the risk of mistakes.

Eponine Pearce said Nationwide had seen this in practice, with several cases of conveyancers overlooking key tasks, such as obtaining consents. “When you discuss it with them, they say ‘We are so sorry. We are so busy, we overlooked this’.”

Stephen Ward, director of strategy and external relations at the CLC, said there was some evidence of more regulatory issues arising, with “procedures that should be followed not being followed quite as tightly as they might be because of the demands on those doing the conveyancing”. At the same time, noted CLC council member Teresa Perchard, there has been no spike in complaints about conveyancing to the Legal Ombudsman.

This might change, though, with Mark Montgomery, chief strategy officer at Simplify Group, saying that the greater understanding clients showed during Covid and the stamp duty rush had evaporated: “They are, understandably, back to being very demanding.”

Many participants reported that a lot of firms remained near capacity as the market continues to run hot. This, combined with difficulties in recruiting both conveyancers and estate agents, was pushing up already long transaction times. Beth Rudolf, director of delivery at the Conveyancing Association, said: “We are also hearing that there are an awful lot of inexperienced people, so a lot of unnecessary additional enquiries are flying backwards and forwards.”

Also, rising prices and a lack of homes on the market means people are holding onto properties with defects in title which at other times may have ended the transaction. Instead, they are trying to fix the defect, with a knock-on effect on timescales. This work also requires conveyancers with experience. For Mark Montgomery, a big part of the extension of timescales came down to the lack of choice, leading to slower chain formation.

It was, reckoned Etienne Pollard, chief executive of conveyancing firm Juno, “very easy to say ‘This is all marvellous, fill your boots’, but if you want to provide a service that people perceive is quality, you have to take a very firm line and say ‘We can take on these many clients and no more’. But that does not really solve the markets problem. It just means that one or two firms are doing the right thing for their clients, but where do the rest of them go? Probably to other players who don’t.”

Recruitment troubles

Mark Montgomery went on to suggest that the recruitment problems across the market came in part from experienced lawyers burnt out by the pressure of the last two years deciding to leave. “We have recruited a number of those into non-conveyancer roles because they have just said, ‘I cannot work that much’.”

He continued: “The other pressure in the market, in terms of capacity, is actually the level of churn, because smaller firms have been desperate to take on people. The uplifts, in terms of salaries that people have been offering, have been significant, and obviously some people have moved, but you do not move out of one job and into another job without a loss of capacity on both sides.”

This all puts even more focus on where technology can help. Mike Harlow of HM Land Registry – general counsel, deputy chief executive and deputy chief land registrar – said: “So much of conveyancing is basically just an information-exchange process and a risk assessment, and a lot of that can actually be done in an automated way. This means that, if the volumes are up, the machines can cope because they can run overnight. Our focus is on making sure that this is secure, and everyone’s interests are protected.”

One problem with being so busy is that firms do not have the time to look at the technology that could help them with that. But, said Rob Gurney, managing director of Ochresoft: “Now there is a lack of volatility in terms of volumes, they are now looking for those efficiency gains, particularly on the basis that recruitment is so hard. How else can we get that work done, if not by putting more bums on seats?”

A lack of technology could affect recruitment in another way, argued Andrew Lloyd. “If a conveyancer from a more tech-enabled practice comes to look at your firm and goes, ‘I am not going back to working like this’, you cannot recruit. They have experienced a more efficient process and way of working.”

More positively, the need to embrace at least some level of technology during the pandemic – CLC research indicates that virtually all of the firms it regulates now use digital ID verification tools, for example – meant those conveyancers previously resistant to digitisation saw the benefits and were more open to it. Indeed, technical skills may in time become part of the CLC’s competency framework for practitioners.

But for Andrew Lloyd, this was not a choice. “This is inevitable. You either do it, or you go out of business. Part of the way you can go out of business is no one will work for you if you are still operating like you did five years ago.”

Information demand

Beth Rudolf predicted that the material information guidance project begun by National Trading Standards’ estate and lettings agents team – fuelled by digital property data – would drive significant change in the home-buying process despite market inertia.

The first of a three-phase process took effect in June; phase A requires the inclusion on all listings of a property’s impact on the buyer’s finance, the council tax band or rate and its price and tenure information. Phase B and C will require the upfront disclosure of utilities, parking and non-standard material information, such as restrictive covenants, flood risk and other specific factors that may impact a property.

Ms Rudolf said this would reduce the risks law firms faced, as “the buyer knows what they are getting” from the off. Lenders would be able to make quicker decisions, speeding up the process, and post-valuation queries – currently based on assumptions that valuers will not in future have to make – would be reduced.

“That is where the digitisation of this data will make a huge difference: being able to transfer it across all of the stakeholders in the home-moving process and then also being able to suck it out and create exception summaries for clients and conveyancers.” A similar scheme in Scotland reduced the fall-through rate of transactions to 11% – it is up to 34% in England and Wales.

Sally Holdway highlighted the opportunities upfront information offered conveyancers too. “We are seeing around 20% of properties that we vet against the Phase As coming up with something which really should have a lawyer’s eyes over it, be it short lease or an unavoidable cost that goes with the property, which means that the lawyers can get instructed a lot earlier in the process. They can be new types of service, such as to extend leases or to fix title issues.”

At the same time, Dan Salmons, chief executive of Coadjute, highlighted a significant weakness in the property market: a lack of common data standards so that data could be shared across the market.

Mike Harlow agreed but said first the data needed to be digitised – a lot of local authority data was not digital yet, despite the Land Registry’s best efforts. There was also a trust barrier, he said. “Is the conveyancer going to trust the data once it’s on their desk? Are they going to trust the exception report or are they going to say, ‘Well, actually, I do not even know where this data came from. I need it from the source. I need to know that I can actually trust it’?

“We have to look at the human behavioural side and the regulatory side, and not leave out the professional standards that still require you to do things that, when you look at them, don’t need doing, such as asking people to print stuff out and sign it.”

He stressed other benefits of joining up data: “We might practically eliminate intra-family fraud if we hook up digital ID checking with qualified electronic signatures.”

Another incentive for law firms of greater automation and use of data could be reduced professional indemnity insurance premiums, as part of the use of the planned digital identity verification framework, and subsequent identity scheme being implemented by the government, observed Stuart Young, managing director of Etive Technologies.

Leadership vacuum

This all seems to be crying out for leadership. But Nicky Heathcote, chair of both Propertymark and the Conveyancing Association, said research found that, when asked who should lead, “every single bit of the sector said someone else”.

For Beth Rudolf, the government needed to step in to bring order to the many initiatives around to speed up the home-buying process. The Home Buying and Selling Group has been trying to deliver it voluntarily but forthcoming research “makes it very clear that the barriers to uptake will prevent it from happening unless it is mandated”.

Nicky Heathcote said the group “has done as much as we possibly can now. We have given the answers, we have got everybody else on board. It now needs government to take the lead”.

Mark Montgomery agreed. “The adoption point is the challenging one. If the government were to set out a clear vision and say, ‘In three years’ time, this is how we are all going to be working,’ it would create a glide path.”

The CLC aims to play its part in this process. It is clear that, whether individual practitioners want it or not, significant change is coming. The CLC’s role is to ensure that those it regulates have the skills and structures available to take advantage of that change to the benefit of clients and of legal service providers.

Ends

Increase in the nil-rate thresholds for residential property

The Chancellor has announced that, with effect from today, the SDLT nil-rate threshold for residential property has been increased from £125,000 to £250,000. The nil-rate threshold for First Time Buyers’ Relief is also increased from £300,000 to £425,000 and first time buyers can now claim relief on properties purchased for up to £625,000 (an increase from £500,000). 

HMRC colleagues have told us they are working on updating the Gov.UK calculator and the return portal as quickly as possible but currently they do not reflect the new thresholds. Messages have been placed on both systems advising customers of the need to use the Gov.UK guidance for help in calculating the SDLT they owe for transactions on or after 23 September. Until the return portal has been updated, customers will need to overwrite the figure of tax calculated by the system with the correct amount. 

For transactions involving First Time Buyers’ Relief, where the consideration is over £500,000 the return portal cannot at present accept a return with a First Time Buyers’ Relief claim. Therefore HMRC ask customers buying properties for between £500,000 and £625,000 to select ‘no’ at 1.9 of the return when asked if relief is being claimed, and to instead enter the amount of tax payable using the rates for First Time Buyers shown in the guidance.

We will provide an update as soon as HMRC confirm that systems have been updated to reflect the new thresholds.

Investment Zones

The Chancellor has also announced the government’s intention to establish Investment Zones in regions across the UK.

An SDLT relief is under consideration for Investment Zones for land and buildings bought for use or development for commercial purposes, and for purchases of land or buildings for new residential development.  Further information about the relief will be published in due course.

CLC Council Meeting of 28th July 2022

FCILEx lawyers who qualified in conveyancing and/or probate can apply to transfer to CLC regulation with no further training or occupational requirement.

You will become either a Licensed Conveyancer and/or Licensed Probate Practitioner.

You will enjoy the benefits of being an Authorised Person in terms of the Legal Services Act 2007 and will be regulated by a specialist regulator with rules, support and guidance tailored to conveyancing and probate practice.

The process is straightforward.

The CLC is waiving the normal Application Fee of £150 for all applicants until the end of 2022 with the exception of our standard, comprehensive DBS and screening check cost, which is under £100.

Your full year individual licence fee, currently £400, will be calculated on a pro rata basis from month of approval until licence renewal on 1 November 2023.

You will need to hold relevant practising certificate(s) free from conditions and to evidence your most recent full year of CPD.

If you do not meet some of these requirements, we may still be able to progress your application on a case-by-case basis.

Register your interest

The new Register of Overseas Entities is being introduced by the Economic Crime (Transparency and Enforcement) Act and launched on 1 August 2022. It will be held by Companies House. The register forms part of the government’s strategy to combat economic crime.

Overseas entities that bought property or land on or after:
– 1 January 1999 in England and Wales
– 8 December 2014 in Scotland
will have until 31 January 2023 to register with Companies House and tell them who their registrable beneficial owners or managing officers are.

Entities that disposed of property or land anywhere in the UK after 28 February 2022 will also need to register and give details of that disposal, even if that entity is now otherwise out of scope of the requirement to register with Companies House.

Verification checks
Before an overseas entity can be registered, a UK-regulated agent must complete verification checks on the information that the overseas entity intends to provide to Companies House. This includes information about
the entity’s beneficial owners and/or managing officers. The agent will need to complete and sign a statement confirming that they have carried out these checks and submit it to Companies House.

Read more about what is required for verification checks.

The agent must be based in the UK and supervised under the Money Laundering, Terrorist Financing and Transfer of Funds Regulations 2017.

They can be individuals or corporate entities, such as:
• credit institutions
• financial institutions
• auditors, insolvency practitioners, accountants and tax advisers
• legal professionals
• trust or company service providers
• estate agents and letting agents

The agent that carries out the verification checks must not work in-house with the overseas entity (for example, as an in-house legal advisor), and verification checks must be completed no more than 3 months before the
overseas entity is registered. It’s an offence for a person, either knowingly or without reasonable excuse, to provide misleading, false, or deceptive information.

The Department of Business, Energy, and Industrial Strategy (BEIS) will shortly be publishing guidance to provide more clarity on what is required for verification checks.

The following information about the agent who has completed the verification checks will be publicly available on the Register of Overseas Entities:
• name of agent
• correspondence address
• the agent’s supervisory body
• the agent’s Anti Money Laundering (AML) registration number (if applicable)
• the name of the person with overall responsibility for the verification checks (if the agent is an organisation

Agents will require an agent assurance code before they can verify or file on the overseas entity’s behalf.

Companies House advise that it will be quicker and easier for an overseas entity to be registered by the same UK-regulated agent that carries out its verification checks.

The assurance code is the equivalent of a signature and confirms that the UK-regulated agent has carried out verification checks on an overseas entity. If the agent is an organisation, only one code is required for the whole organisation. This code can then be used for every overseas entity that the agent carries out verification checks for and registers.

Read about how UK-regulated agents can request an assurance code from Companies House.

Read HM land Registry’s Practice Guide 78: Overseas Entities

Cyber-attacks, sanctions, cryptocurrency and anti-money laundering are among the new issues highlighted in our second annual Risk Agenda, published today.

The agenda brings together a list of the biggest risks faced by the CLC’s regulated community, which emerged during its regular monitoring and inspection work throughout the year.

It includes advice to help practices stay on the right side of compliance after a turbulent couple of years which saw unprecedented pressure placed on the sector as a result of the pandemic and extended stamp duty holiday.

Under cyber-attacks, for example, which are described as “a matter of when, not if”, the agenda stresses the importance of preparing for potential incidents. Earlier this year, the Information Commissioner’s Office fined a large law firm £98,000 for failures that led to a ransomware attack. The agenda goes on to list the five key issues that firms should consider, such as establishing an internal incident response team, testing processes in a live environment and maintaining a separate list of customers so they can be contacted if core systems are down.

Russia’s invasion of Ukraine has brought sanctions into the spotlight given the influx of Russian money into the UK property market over the years. The agenda highlights the importance of keeping up to date with and adhering to sanctions, with criminal prosecution or a large public fine facing anyone who fails to comply.

Conveyancing remains a high-risk area for money laundering. Currently, transactions funded by cryptoassets are treated in a similar way to those paid for in cash and practices must carry out the same due diligence, such as obtaining statements and trade histories. The risk agenda says firms should consider whether they have the expertise required to handle such matters if it is outside their usual remit.

Another risk is firms which fail to adequately prepare for closure, for example, if they are refused professional indemnity insurance or, in the case of sole practitioners, if they fall ill. Business continuity plans should be in place to cover this and other issues such as file storage which, under CLC rules, must be kept for a minimum of six years with some exceptions.

The regulator says it has encountered business owners who are not aware of their obligations and have not budgeted for the ongoing cost of storage and/or data retention. In a recent case, one owner was disqualified from practising for a year after ignoring CLC advice and abandoning 15,000 archived files at offices they were no longer paying for.

CLC chief executive Sheila Kumar says: “Today, the threats to clients’ assets are more sophisticated than ever and the challenges for lawyers have grown correspondingly.

“Property transactions and probate issues are more complex, and lawyers have serious responsibilities to help combat fraud and money-laundering as well as ensuring that sanctioned individuals or businesses cannot get around the restrictions that the UK government or international community has placed on them.

“The second of our annual Risk Agendas aims to help CLC-regulated lawyers meet the challenges of legal practice in the fast-changing world and to protect their clients.

“Our unique approach – working with practices to identify and address risks before they crystallise as harms – is what we hold to be the most proportionate and effective approach to regulation and is successful in resolving the vast majority of non-compliance that we find.”

Digital identity checks, changes to professional indemnity insurance, complaints, conflicts of interest and aged balances are also among the issues covered in the Risk Agenda which you can read in full here.

From 2023, firms regulated by the Council for Licensed Conveyancers (CLC) will have to submit at least one application for professional indemnity insurance (PII) two months ahead of the renewal deadline, under plans approved by the Legal Services Board (LSB) in early June.

Insurers receiving applications will then be required to respond no less than one month before the deadline, on 1 June, in a bid to reduce the risks involved when firms and insurers take renewal right up to the 30 June cut-off.

The CLC said the idea, which was proposed following a recent public consultation, was “intended to make the renewal process smoother than it has been, allowing practices time to seek alternative cover if needed and be able to plan for the outcome better”.

The regulator will also introduce a requirement for an automatic 90-day extension of cover in the event that a practice is unable to renew, with the last insurer paid a pro rata premium based on the most recent policy. The practice must not take on new work during the extended cover period. In the event cover is found during that time, the new insurer will backdate the policy to 1 July.

This will not apply to firms whose insurer has notified them and the CLC, no later than 31 March, that it will not offer renewal.

The new Minimum Terms and Conditions and Participating Insurers Agreement come into effect on 1 July 2022 and will govern the policies that incept on that date onwards.

Despite requests from insurers during the consultation, changes will not include removing integrated run-off cover, which should be priced into a firm’s annual policy under the CLC’s current rules. Some insurers argued that they should be separated, and a run-off premium made payable in all cases, with no cover if not paid.

The CLC concluded that the risk to consumers of run-off cover not being in place was too great, with the experience of other regulators showing that many closing firms do not pay their run-off cover premium.

A CLC policy paper said: “Insurers seem to have regarded the CLC’s integrated policy as ‘free run-off cover’. Most have made clear that they have not priced the risk of run-off provision into the annual premium. There have been no representations that to do so would not be possible.”

Despite support in the consultation for allowing a firm and insurer to agree their own excess level beyond the thresholds set by the CLC, this will only be allowed when the CLC has approved it following a joint submission.

It also pledged to work with brokers and insurers to improve the availability of cover for start-ups and firms transferring from SRA regulation.

CLC director of strategy and external relations Stephen Ward said: “We believe that the package of reforms we have agreed with the LSB are fair to both our regulated community and insurers alike, and at the same time meet our primary responsibility to protect the public interest.

“A robust and sustainable professional indemnity insurance scheme is a cornerstone of our regulatory approach, and we will continue to monitor its effectiveness during the renewal round, as we do every year.

“We will also turn our attention to cyber-cover. Although our consultation was not about cyber cover, CLC used the opportunity to take opinion. From that there was significant support for mandatory cover but also concern about its cost and the wide variations in what is provided by different policies. As such, the CLC Council will review potential approaches to cyber-cover. Alongside this, we will be issuing further guidance on mitigating cyber risks, and urge all businesses to review their arrangements in the context of the ever-changing risks.”

Find out more about the consultation and the CLC’s decisions

The number of women and people of colour in senior roles within conveyancing is still unsatisfactory. Despite the many initiatives aimed at lowering barriers to entry and ensuring fair career progression across the entire legal profession, change is very slow – particularly for those who are vulnerable or have protected characteristics.

The CLC has now launched a public consultation on changes to its Equality Code in a bid to ensure regulated practices and individuals are meeting expectations.

There are two main changes proposed which relate to the way the CLC collects data on diversity and complaints of discrimination, victimisation or harassment and are set out in the consultation document.

It is important that the legal profession reflects – to the greatest extent possible – the diversity of the population it serves. Although the CLC’s non-graduate profession is more closely reflective of society than some other branches of legal sector, the fact that women and people of colour do not progress to senior positions in the proportions they should indicates that more action is needed to make effective and sustainable changes.

These proposals are intended to deliver, and maintain, positive improvements by giving the CLC more levers to effect change and we are keen to hear what people think.

Since the Equality Code was introduced, following the passing of the Equality Act in 2010, the CLC has gathered three sets of diversity data from its regulated community. While the response from individuals was good, the preferred method of collecting data from practices was less successful, prompting concerns that some firms may not be seeking the information from their employees.

The consultation proposes that a new requirement is written into its Equality Code, compelling regulated practices to “cooperate with the CLC in the collection and analysis of data about their workforce and owners as may be required by the CLC from time to time.”

In order to help monitor and drive change, the CLC further proposes that, when required, practices “report any instances of complaints of discrimination, victimisation or harassment whether as an employer or service provider” and keeps records to enable them to do so.

A joint statement issued recently by the Legal Services Board along with eight legal regulators, including the CLC, underlined their commitment to tackling counter-inclusive misconduct.  


“We know regulation alone is not the answer, but as legal service regulators we have considerable influence over how legal professionals behave,” it said.


“We oversee the way lawyers are trained and educated. We set standards of conduct and expectations of professional behaviour. And we have powers to act where conduct falls below those expectations and through our disciplinary processes.”

Sheila Kumar, Chief Executive of the CLC added: “It is appropriate for the CLC as a regulator to examine where regulated bodies and individuals are or may be failing to comply with our regulatory arrangements and expectations.

“To help achieve this, the CLC needs to be able to collect data on all complaints related to discrimination, victimisation and harassment made by employees of a practice, its clients or members of the public.

“Where this data provides evidence of non-compliance with the code (or more broadly), the CLC will then be able to take proportionate action.”

Anyone working in the conveyancing industry or with insight into the challenges of delivering a diverse workforce and inclusive client services is invited to take part in the consultation, full details of which are available here. Responses can be sent up until the closing date of 30h August either via email consultations@clc-uk.or or by post to: The Council for Licensed Conveyancers, WeWork, 131 Finsbury Pavement, London, EC2A 1NT.

All responses will be published but can be anonymous if requested.

The consultation includes additional draft guidance that will be finalised following the consultation and that will assist firms in meeting their obligations under the Equality Code.  It is included at Annex 4 of the consultation document.

Chair’s Report from Dame Janet Paraskeva

This is my second written report on a CLC Council meeting. There was a very positive response to the first one, covering the Council meeting of 12th February 2022.  These reports aim to give those we regulate and other stakeholders a different insight into how we go about our work.

As well as the formal session that I report on below, the Council kicked off its review of the CLC’s strategy, which will continue until the end of the year and include a consultation over the summer. I hope that you will take the opportunity to join in with that.

You can see the agenda and papers for the 12th May meeting on our website.

Reviewing our progress

The Council reviews the CLC’s progress against the agreed business plan at each of our formal quarterly meetings. Our business plan year is the calendar year, so in May we reviewed the work in the first quarter of the year. Work is very much on schedule, with just some minor timetable modifications having been agreed to take account of the significant additional and ongoing work to monitor and support the regulated community’s compliance with the sanctions regime that was significantly increased following the Russian invasion of Ukraine on 24th February.

The CLC’s Advisory Note on Sanctions is being updated as needed in light of the changing situation. I am pleased that we have found good compliance across the conveyancing and probate firms and that there is a low level of exposure to potentially and actually sanctioned clients. It is good to see that there is very wide use of electronic tools to check ID and sanctions status, among other checks.

The report on Key Performance Indicators for Q1 of 2022 is published on our website, as usual and demonstrates our good practice.

Maintaining the regulatory framework

The CLC is committed to ensuring that is regulatory framework reflects evolving best practice, the changing nature of risks and harms in the delivery of conveyancing and probate services and the changing models of service delivery and business.

At this Council meeting, we ratified decisions taken at an informal meeting to submit to the LSB an application for changes to our Professional Indemnity Insurance arrangements aimed at making the process smoother. We also approved proposed additions and clarifications to the rules that support the operation of the independent Adjudication Panel that considers disciplinary cases. We also reviewed, prior to its publication, a consultation on changes to the Equality Code. Make sure to have your say on the proposals in that consultation, which will begin soon.

The Council also considered work on the Compensation Fund that the CLC operates. The review aims to create a better framework for the proper management of the Compensation Fund and availability of the Fund to make grants to applicants falling within its ambit. The Council provided steers on key issues ahead of drafting beginning to set out proposed changes.

Understanding the changing environment in which we operate and monitoring risk

As noted below, in the background section, the Council receives from the executive team weekly updates on economic, regulatory, political, technological and commercial developments that may affect the practice of conveyancing and probate, the risks that consumers and law firms face and so need to inform our approach to regulation. The Property and Law Roundup provides an additional update at each quarterly meeting.

At this meeting, the Council approved changes to the CLC’s Principal Risk Register following its review by the Audit and Risk Committee, taking account of the deep insight the CLC has into its regulated community, informed by insight into the wider economic and other factors affecting the sector we regulate.  

Next meeting

The next formal meeting of the Council will be on 28th July. Before that, we will be working on the review of our strategy in informal sessions.

Background on the working of the CLC Council

The Council of the CLC has formal quarterly meetings to review performance and to consider policy issues and regular, informal workshop sessions to have initial steering discussions with the executive team on a wide range of challenging or innovative questions. There are weekly written updates to Council too on the full breadth of the CLC’s work and insight into the evolution of the housing market, the practice of conveyancing and probate and the outlook for the economy. The agendas and papers for the formal Council meetings are published here.

The Council brings together lawyers and non-lawyers with a broad mix of experience that is relevant to the work of the regulator. You can find out more about the members of the Council here. The Council is supported by the Audit and Risk Committee, which meets quarterly and in advance of Council, making reports and recommendations to it. There is also a Remuneration Committee and Appointments Committee that each meet periodically through the year.

Key Performance scrutiny

As you would imagine, a central part of the Council’s work is to review the CLC’s performance on its core regulatory work and to that end we always review the CLC’s watchlist, which tracks the progress of serious disciplinary matters as well as claims on the Compensation Fund, the CLC’s own Principal Risk Register and a set of Key Performance Indicators that run across the organization. This provides scrutiny and challenge for the executive team and brings the varied expertise of the Council Members to bear on their work.

The CLC is part of the Regulatory Response Unit of Lawtech, part of Technation. We've worked to develop a joint statement supporting the use of digital identity technology in the legal sector, because there seem to be misconceptions and in some areas a reluctance to move to new ways of working.

 

The CLC has been struck by how many of the practices it regulates are using digital tools to improve the reliability and speed of their ID checking processes. If you have questions, the Joint Statement can probably answer them.

The CLC has issued an Advisory Note on the fast-changing situation in relation to UK sanctions. It will be updated as necessary.

Read the Advisory Note on the UK Sanctions Regime

The CLC has launched a consultation on changes to existing rules and the addition of further rules to to ensure that they are capable of governing a range of constitutional and procedural matters. This will include amending the constitution of the independent Adjudication Panel by codifying current practice and clarifying its powers.

Read more and respond to the consultation

Chair’s Report from Dame Janet Paraskeva

This is the first time I have written a report on a CLC Council meeting. I hope that it will give those we regulate and other stakeholders a different insight into how we go about our work. We have formal quarterly meetings to review performance and to consider policy issues and regular, informal workshop sessions to have initial steering discussions with the executive team on a wide range of challenging or innovative questions. There are weekly written updates to Council too on the full breadth of the CLC’s work and other updates as needed. The agendas and papers for the formal Council meetings are published here.

The Council brings together lawyers and non-lawyers with a broad mix of experience that is relevant to the work of the regulator. You can find out more about the members of the Council here. The Council is supported by the Audit and Risk Committee, which meets quarterly and in advance of Council, making reports and recommendations to it. There is also a Remuneration Committee and Appointments Committee that each meet periodically through the year.

Reviewing 2021

The first Council meeting of any year is always a busy one as we sign off on the budget and business plan for the year as well as reviewing performance the end of year outturn for the past year. Those decisions are informed by our quarterly reviews of progress against the business plan and management of the budget, scrutiny by the Audit and Risk Committee throughout the year and a rigorous programme of independent internal audits.

It is a great accolade for the organization that, for the fifth year running, the internal auditors have assessed the CLC’s achievement with the highest level of assurance possible, judging that the CLC has an ‘adequate and effective framework for risk management, governance and internal control’.

The performance of the CLC will be set out in detail in our Annual Report and Annual Financial Statements that will be published in early April. It was good to confirm at this meeting that the CLC continued to meet its objectives in relation to consumer protection through standard-setting, monitoring and enforcement as well as making major innovations such as the changes to meeting the costs of the Legal Ombudsman that we introduced last year. Work on the review of Professional Indemnity Insurance ran throughout last year and the Council will consider the results of the current consultation in March.

Other major achievements in 2021 included the ongoing provision of advice and support to practices in relation to the impact of the pandemic, improvements to the disciplinary process leading to referral to the Adjudication Panel, the realization of cost savings that were agreed in late 2020, and a significant programme of scrutiny of Anti-Money Laundering measures that practices have in place, including the publication of our first AML-specific report.

The team make very prudent use of resources with the aim of keeping the financial burden of regulation to a proportionate level and have also been managing down excess reserves that had built up over time.

Planning for 2022

The Council approved the Business Plan for 2022. Details of the budget that supports the delivery of that plan will also be published on our website soon.

Outside the ongoing core work of regulation, this year will see an additional focus on complaints handling. We will be asking practices for much more information about the complaints they receive and how they deal with them. That will help us to provide support to reduce the numbers of referrals to the Legal Ombudsman (LeO) overall and we will especially be targeting firms with levels of referrals that are disproportionate to the numbers of transactions they handle each year. This is an important part of the changed approach to meeting LEO’s costs, which, over time, will see firms with high complaint referral levels bearing more of the financial burden of the handling of those complaints by LeO.

Key Performance scrutiny

As you would imagine, a central part of the Council’s work is to review the CLC’s performance on its core regulatory work and to that end we always review the CLC’s watchlist, which tracks the progress of serious disciplinary matters as well as claims on the Compensation Fund, the CLC’s own Principal Risk Register and a set of Key Performance Indicators that run across the organization. This provides scrutiny and challenge for the executive team and brings the varied expertise of the Council Members to bear on their work.

Playing our part in the Legal Sector

At this meeting, the Council also considered the findings of the Legal Services Board’s (LSB) Regulatory Performance Assessment of the front-line regulators that was issued in late 2021. This found that the CLC was meeting all of the outcomes that the oversight regulator sets for the front-line regulators but that there was more they felt the CLC should do to explain our policy- and decision-making process. This Council bulletin is part of our effort to address that, along with other additions to published content on our website and to our Annual Report and our other stakeholder activities through the year.

The CLC also reviewed a draft response to the LSB’s consultation on its draft business plan. The Council made some additions to that, and the response has now been submitted and published on the CLC website. This prompted discussion of performance at the Office for Legal Complaints (OLC) and about the outcome of OLC’s consultation on its own business plan. One of our Council Members, Teresa Perchard went straight from the Council meeting to a meeting of the OLC’s Challenge and Advisory group, where she represents the CLC and brings how own experience of consumer affairs to bear.

The Council also considered a draft Joint Regulator Statement on Disciplinary Sanctions in relation to findings of discrimination in the regulated sector. The LSB continues to develop this draft, so it would be wrong of me to say more other than that it currently sits comfortably with our own work in relation to diversity and inclusion and we are supportive of the principles.  

Next meeting

The Council will meet again on 10th March for an informal workshop session on ongoing competence (CPD) and to review the findings of the consultation on PII arrangements. We will enter a formal session then also to finalise a submission to the Legal Services Board on any changes to our PII arrangements. On 24th March will meet solely to finalise the Annual Financial Statements for 2021. Our next full formal meeting will be on Thursday, 12 May and the papers for that meeting will be published here prior to the meeting.

The CLC has been extremely concerned by the issues at the Conveyancing Academy and the experience of students and their employers. However, the Conveyancing Academy is overseen by the SQA. The CLC has no management or control over the Conveyancing Academy or any of the other education providers approved by the SQA. This is not part of CLC’s regulatory remit which is the regulation of legal services under the Legal Services Act 2007. We do have an expectation of any centre unable to honour its commitment to CLC students that it works openly with the appropriate agencies and self and employer funded students to facilitate the necessary student transfer arrangements.

Since the CLC became aware of the issues at the Conveyancing Academy, in November 2021, we have been helping the SQA and funding agencies as far as we can as they provide information and practical assistance to help students continue the course of study they choose. Below, there are FAQ from the SQA for students and employers.

Responsibility for the maintenance of qualification assessment standards falls to the SQA and governance of apprenticeship quality and funding compliance to the ESFA and Welsh Work based Learning Department. They are the responsible regulatory bodies with oversight of the Conveyancing Academy’s approved status as an SQA qualification centre and as an apprenticeship training provider.

The role of the CLC is to set the standards (academic and occupational) for individuals seeking to become eligible to register as a national conveyancing or probate technician and the entry standards into the profession for those seeking to licence as a CLC Lawyer.

This model has generally served the profession well, increasing the numbers of newly qualified lawyers entering the profession and helping to meet the growing demand for Licensed Conveyancers and Probate Practitioners. It is very regrettable that the current incident is doing so much to undermine confidence in this otherwise successful and robust arrangement.

We trust that the SQA and funding agencies will now be able to provide students and employers with the necessary information to assist them to transfer their studies and funding arrangements to new providers, though we accept that this could take some weeks to achieve. We urge students to come forward so that they can be helped.

Information for students and their employers from the SQA

Convey365 Ltd/The Conveyancing Academy was suspended from offering SQA approved qualifications or advertising itself as an SQA approved centre on 21 April 2021.

Convey365 Ltd/The Conveyancing Academy has not registered any candidates with SQA since then. This includes the Level 4 and Level 6 Conveyancing Qualification.

As of 21 January 2022, Convey365 Ltd/The Conveyancing Academy is no longer a SQA Approved Centre and has no licence to advertise as such or to enrol learners on any SQA qualifications.

The SQA is working with other providers of those qualifications and with funding agencies to identify solutions for students who have been under the impression that they are working towards an SQA diploma with Convey 365 Ltd/The Conveyancing Academy.

Frequently asked questions

Students

Q: I enrolled/have been doing a SQA diploma in conveyancing/probate with Convey365 Ltd/The Conveyancing Academy – why can’t I finish the course/be awarded the diploma?

Convey365 Ltd/The Conveyancing Academy was suspended from offering SQA approved qualifications or advertising itself as an SQA approved centre on 21 April 2021.

Convey365 Ltd/The Conveyancing Academy has not registered any candidates with SQA since then. 

If you have been under the impression that you are working towards an SQA diploma with Convey 365 Ltd/The Conveyancing Academy, please speak to the company in the first instance to discuss securing an alternative training provider and the return of any fees you have paid.

As of 21 January 2022, Convey365 Ltd/The Conveyancing Academy is no longer a SQA Approved Centre and has no licence to advertise as such or to enrol learners on any SQA qualifications.

Q: I have spoken to Convey365 Ltd/The Conveyancing Academy, and they say they can’t help me find another training provider and will not refund the fees I have paid – can you help?

We are currently working with funding agencies in England and Wales to look at how we can support individuals to enrol with other training providers who are approved to offer the SQA diplomas. If you leave your contact details, we’ll update you as soon as we can.

With regards to any fees you paid Convey365 Ltd/The Conveyancing Academy, we suggest you contact a consumer affairs organisation such as the Citizens Advice Bureau.

If you thought you were doing the SQA diploma as part of an apprenticeship, the relevant funding agency is also aware of the situation. If you contact them, they may be able to help you find another training provider.

In Wales: askWBL@gov.wales

In England: complaints.ESFA@education.gov.uk  

Employers

Q: I have sent employees to Convey365 Ltd/The Conveyancing Academy to study for the SQA diploma in conveyancing/probate – why are they not getting the SQA diploma?

Convey365 Ltd/The Conveyancing Academy was suspended from offering SQA approved qualifications or advertising itself as an SQA approved centre on 21 April 2021.

Convey365 Ltd/The Conveyancing Academy has not registered any candidates with SQA since then.

If your employees have been under the impression that they are working towards an SQA diploma with Convey 365b Ltd/The Conveyancing Academy from this date, please speak to the company in the first instance to discuss securing an alternative training provider and the return of any fees you have paid.

If your employees were under the impression that they were doing the SQA diplomas as part of an apprenticeship, the relevant funding agency is also aware of the situation.

As of 21 January 2022, Convey365 Ltd/The Conveyancing Academy is no longer a SQA Approved Centre and has no licence to advertise as such or to enrol learners on any SQA qualifications.

Q: I have spoken to Convey365 Ltd/The Conveyancing Academy, and they say they can’t help me find another training provider for my employees and will not refund the fees I have paid – can you help?

We are currently working with funding agencies in England and Wales to look at how we can support individuals to enrol with other training providers who are approved to offer the SQA diplomas. If you leave your contact details, we’ll update you as soon as we can.

With regards to any fees you paid Convey365 Ltd/The Conveyancing Academy, we suggest you contact a consumer affairs organisation such as the Citizens Advice Bureau.

If your employees thought they were taking the SQA diploma as part of an apprenticeship, the relevant funding agency is also aware of the situation. If you contact them, they will be able to help you find another training provider.

In Wales: askWBL@gov.wales

In England: complaints.ESFA@education.gov.uk  

Q: Why didn’t you inform us of this situation in April 2021

Convey365 Ltd/The Conveyancing Academy was suspended from offering SQA approved qualifications or advertising itself as an SQA approved centre on 21 April 2021 and has not registered any candidates with SQA since then.

Despite this, the company has continued to advertise itself as an SQA approved centre and has offered SQA approved qualifications to learners when it has not been in a position to deliver them.

We have been actively pursuing the case through our established procedures.

As of 21 January 2022, Convey365 Ltd/The Conveyancing Academy is no longer a SQA Approved Centre and has no licence to advertise as such or to enrol learners on any SQA qualifications.

Relevant third party agencies are aware of this situation and are working to address the challenges raised. It may take some weeks before all candidates and employers are able to finalise their next steps

This article first appeared in What Mortgage Magazine.

Regulators are like football referees – it’s best when you don’t notice us. And we want the game, or rather the market, to flow with minimal intervention.

But there come times when we have to act where clients face an immediate risk and that action has to be quick and decisive. Indeed, consumers need to know we exist and are there to help when challenging circumstances arise. And nothing has ever been quite so challenging in the conveyancing market as the recent cyber-event that knocked out the IT systems of the country’s largest conveyancing business, Simplify. The three law firms within its group that were badly affected by this are regulated by the CLC.

After several extremely difficult weeks, Simplify has now restored the full range of client services. But throughout this time, we have received many messages asking what we as the regulator were doing – and, frankly, some wanted to know why we weren’t doing more.

Our role is to regulate the profession of licensed conveyancers and probate practitioners effectively in order to secure adequate consumer protection, promote effective competition in the legal services market, and provide consumer choice. Arguably the first of those is our single most important function – what’s the point of regulation without it?

We do this through a mixture of before, during and after-the-event tools. Before we will issue their first licence to practise as conveyancer, a lawyer needs to have completed the Level 6 diploma in conveyancing law and practice (equivalent to a university degree) as well as 1,200 hours of practical experience.

Once a licensed conveyancer is working, they must comply with the CLC code of conduct, as well as undertake a certain amount of training every year to ensure they are up-to-date and improving their skills. Ultimately, we have the power to discipline our lawyers if they go wrong, to the point of seeking their disqualification by the independent Adjudication Panel.

We also regulate law firms, which have to comply with our code of conduct as well. We are in regular contact with our firms and regularly go in and review how they are operating. Again, we have disciplinary powers, and can even close them down entirely if that is needed to protect the interests of clients and the public. This is, happily, a rarely used power which is mainly needed in failed firms when there is wrongdoing involved and/or client money is at risk. The professional obligations of the lawyers running a CLC-regulated firm continue after that firm has closed, for whatever reason, with Professional Indemnity Insurance also required to be in place for the six years following closure, and client files being stored safely, for example,

Finally, all our lawyers and firms, need to be covered by professional indemnity insurance that can compensate clients for negligent work, and we have a Compensation Fund for consumers who have lost out due to the dishonesty of one of our lawyers.

We in turn are monitored by the Legal Services Board, which regulates the regulators, to ensure that our performance is up to scratch.

There is only so much I can say about what went on with Simplify but I can assure you that we were in daily contact with its executive team from the start and went to the headquarters in Leicester to meet them face to face several times too. We had to be assured that our requirements were being complied with; within that, the single most crucial element was that client monies were safe, which they were.

What happened to Simplify could have happened to any business. The firm took a cautious approach to restoring systems and developed temporary processes to enable transactions to progress. We agreed with this, much though it caused very understandable concern and frustration among clients. In relation to their response to the incident we advised where they could improve too, such as in their communication about the incident.

In reality, were Simplify not such a large business with the access to resources that it has, it may not have been able to recover at the speed that it has – although we appreciate it did not seem quick to clients – or indeed at all.

This was an extremely unfortunate incident that serves as a very harsh lesson to all businesses about cyber-risk, but the best course was to allow the firm to complete its recovery.  Any alternative would have increased delay and inconvenience for clients.  The relevant agencies had been informed – the Information Commissioner’s Office and the police, the latter of which launched a criminal investigation, still ongoing, to find those behind the incident.

Consumers would not have been better served by the CLC stepping in – it’s not as though we could have got their systems up and running any quicker. Now that they are, however, our focus will turn to assessing the incident in the context of the CLC’s Code of Conduct and deciding our next steps and any appropriate sanctions.

Regulators, like the regulated, are always learning. It is all very well talking about cyber-risk in abstract but seeing the challenges it can present for such a large law firm and its many clients has been sobering for the entire legal market and beyond.

We cannot promise it will never happen again because property selling, with all the money that flows through the system, is an obvious target for fraudsters. But we can promise that the focus of the CLC and those we regulate will be sharper than ever to ensure that our part of the property market goes back to being as uneventful as possible.

A consultation has been launched on possible changes to professional indemnity insurance (PII) cover for conveyancers and probate lawyers.   

The Council for Licensed Conveyancers (CLC) is updating its policy on PII, a vital element of consumer protection that all the firms it regulates must have.

The last review was carried out in 2016, prompting the move to an open market scheme based on standard Minimum Terms and Conditions (MTC) and governed by a Participating Insurers Agreement (PIA). The agreement means that CLC-regulated practices can seek cover from any insurer who is part of the scheme, with a £2million minimum level of cover for every claim including run-off cover should firms close.  

Following changes in the industry and the current challenges in the PII market, however, the CLC decided it was timely to revisit the scheme and is proposing limited changes to ensure it continues to protect client interests, is affordable and proportionate, and supports a healthy and competitive PII market as well as innovation and growth in legal services.

Areas under review include the integrated run-off provided by the MTC, the approach to excesses set by insurers and whether standalone cyber insurance should be mandatory.

The consultation, which runs until 25 February, is seeking feedback from regulated firms, insurers, consumers, and other professionals across the wider industry.

Sheila Kumar, chief executive of the CLC, said: “Conveyancing and probate transactions involve people’s largest assets and life savings, and that’s why we require all our regulated firms to have robust professional indemnity insurance in place to safeguard consumers.

“As a result of market pressures over recent years, however, we have seen examples of firms being refused cover because of work carried out in the past even if any notified circumstances do not proceed or they no longer undertake that type of work. Another issue is that new and transferring firms have found it difficult to secure quotes in a timely way from participating insurers.

“This consultation follows a comprehensive review of our current arrangements, which has included a well-publicised call for evidence last year and lengthy discussions with insurers and brokers as well as our regulated community.

“We are keen to hear from as many interested parties as possible to ensure our PII arrangements are fair and fit for purpose in the future.”

The full consultation document can be found here. Responses should be sent by 25 February to consultations@clc-uk.org or by post to: The Council for Licensed Conveyancers, WeWork, 131 Finsbury Pavement, London, EC2A 1NT.

You can also take a brief, five-minute survey here: https://www.surveymonkey.co.uk/r/CLCPIIConsultation

In addition to the consultation, the CLC also plans to hold further discussions about PII with stakeholders and will be circulating a brief questionnaire to garner opinion on the key issues. These steps will be promoted on the CLC website and in its newsletters.

Any changes to the scheme will be agreed by the Council for the CLC at its meeting in March then submitted to the Legal Services Board for approval ahead of the PII renewal deadline in June.

We want to remind students and employers that the assured educational route to qualify for licence as a CLC lawyer is via the SQA level 6 Diplomas in conveyancing and probate that are regulated as part of the Register of Regulated Qualifications that are offered by providers approved by the SQA. In addition to the SQA Level 4 and 6 Diplomas, the CLC publishes those legal qualifications it accepts as part of its routes to qualify HERE.  

Please note only regulated level 3 qualifications (certificated by national awarding body) and successfully completed level 3 Legal Apprenticeships (Certificated by The Education and Skills Funding Agency) are accepted by the CLC for exemptions at Level 4. However, candidates who have completed level 3 qualifications or Legal Apprenticeships are also required to complete units on the SQA Level 4 Diplomas before being able to progress to study a SQA Diploma level 6. Standalone unregulated level 3 courses are not recognised for any level of exemption by the CLC.

There are level 4 courses in place that provide a pathway to the level 6 qualifications and there may also be exemptions for candidates who already have some legal education. However, attainment of the Level 6 qualification is the final test.  

Completion of lower-level courses or unregulated courses will not enable students to seek licence by the CLC. When joining courses, students and their sponsoring employers must check that the course or qualification meets their requirements and will qualify them to seek to register as a national CLC Technician or first qualifying CLC licence if that is their intention.   

It was the diversity of the conveyancing market – ranging from volume providers to small law firms that acted on a handful of transactions – that meant it was able to handle the huge surge in work caused by the stamp duty holiday, a roundtable hosted by the Council for Licensed Conveyancers (CLC) heard recently.

It was clear that conveyancers had been stretched to the very edge of their capability by the volume of work, combined by the impact of Covid-19 on staff.

Participants also suggested that the pandemic has accelerated conveyancers’ adoption of technology by five years and led to fees going up for the first time in many years.

Please note that the roundtable took place before the recent cyber-security incident at the Simplify group.

Incredible stress on sector

Mark Montgomery, chief strategy officer at Simplify, the UK’s largest conveyancing group, said: “For over 12 months, conveyancers across the sector have probably been running at 140% or 150% of normal capacity in an environment where, for many, their processing efficiency has been compromised because working from home has forced different ways or working.

“Every conveyancer wants to do a good job, but inevitably, being overloaded has meant a hit on service. The stress that that has caused across the industry has just been incredible.”

Andrew Lloyd, managing director of property data company Search Acumen, added: “The industry as a whole is exhausted – the supply chain has been in exactly the same position as conveyancers. Whether it is local authorities who are being asked to provide due diligence information or the other third parties involved in providing signing services, all of it has been stretched to its absolute limit.”

A survey by Teal Legal last Christmas found that 50% of conveyancers wanted to leave the profession, such was the level of stress, director Sally Holdway noted.

And yet the demand from consumers has been met and, for Mark Montgomery, that is due partly to the shape of the market.

He said: “Some 40% of the market is delivered by the 5,000 smallest firms, and the smallest of those are the equivalent of the oil-fired power station that gets switched on once a year. They are still highly important to being able to deal with peak demand.

“We would not have got through March and June without firms that normally do almost no conveyancing jumping in and doing more. Whatever we do or think about in terms of technology adoption, we have to recognise that, if you exclude those firms from the market, all our aspirations for transaction speed go out the window if everybody is too busy and there is no flex in the system to deal with that excess demand.”

Sustainable fee levels

Rob Houghton, the chief executive of Reallymoving, which owns The Law Superstore, said the “massively supply-constrained but huge-demand market” translated into an average 44% rise in conveyancing fees at its peak.

They have fallen back a little since and the question is whether that will continue. “A lot of people are saying that they have seen conveyancing fees get to a long‑term, sustainable level,” he noted.

A key development, he went on, is that more lawyers and consumers now understand that they never have to meet. “For lawyers, it is significantly increasing the total addressable market. Many more firms are increasing their market footprint because they are happy to pitch to people on the other side of the country.”

It has been a long time since conveyancers have put their prices up rather than down. Beth Rudolf, director of delivery at the Conveyancing Association, reckoned that the “chase to the bottom caused half of the problems that we have seen”.

She explained: “How can you afford technology when you are not making a profit? It has to be a good thing that the market has risen, and that people can be properly resourced. Particularly with transaction times of 18 weeks, your pipeline turn and the cash coming in has been really tricky.”

No going back

Either way, the market has to move on – there can be no going back to the pre-pandemic approach to technology in particular. For Andrew Lloyd, now is the time to ask, “how do we create an industry that can do this kind of volume and capacity in a more efficient way?”

Sally Holdway said the “sit back and see what happens” mindset has changed. “Firms have realised that it can be such a boon to their practice in so many different ways, not just efficiency, but improving risk management, that we are now starting to see a more strategic approach.”

The pressure is also coming upstream, she observed. “We get quite a lot of estate agents or panel managers who come to us and say, ‘We are looking at this process as a whole. Can we start to change the chronology of conveyancing to make things go faster, more streamlined and underpinned by technology?’”

John Reynolds, chief operating officer of Coadjute, a blockchain network connecting the software platforms used across the property market, said the conversation on technology has moved on from  being about “customer experience niceties” to “ core business resilience,” with Covid businesses having to go entirely online overnight.

This meant that customers started asking their software providers, not only “how can you make us become more efficient internally” but “how does your software help us connect safely and securely online with brokers, estate agents and panel companies?”

“This immediate shift from hybrid online and face-to-face work to lockdown and fully online sparked a tremendous amount of digitisation. The pace of services opening up and joining up advanced five years in five months, to the extent that even competing platforms connected up to provide a shared view of a transaction’s data to their users.”

Grabbing the opportunity

There was recognition that the CLC is a facilitative regulator – engaging with its community to encourage innovation while ensuring client protection – leading to discussion about the need to spread this message and to what extent it could help in giving conveyancers the confidence to adopt technology.

Certainly for Mike Harlow, the deputy Chief Land Registrar, those with leadership roles in the sector “need to help people understand where this is heading”. He added: “Explaining and making the conveyancer an intelligent consumer will accelerate healthy change.

“We recognise that we are talking about technologies that are well established and can grab the opportunity. The difference is that, before Covid, if you talked about these things with the sector, you would hear a ‘Yeah, maybe. I will look at it. That is something that I might do’. Now it is ‘We had better do that because otherwise we are not going to be as resilient to something like this in the future.”

While the sector should be proud of how it kept the property market moving, Mr Harlow said, “it could have been better if we were better set up”.

“We all recognise that, Land Registry included. There is so much that we can do, and now, culturally, there is the willingness to adopt it and see it happen quickly. You can see the consolidation that is going on in the industry. The sector is maturing.”

Tech investment is permanent

Andrew Lloyd characterised a view in the legal sector of technology as a one-time investment, rather than a “permanent commitment to continually reviewing and updating” it.

He went on: “Lawyers understand as consumers that tech moves on, but as business owners, they think it is a case of ‘I bought the case management system in 2008. What’s wrong with that?’

“As regulators and industry influencers, there has to be an understanding coming out of this period of change to say: ‘Tech investment is permanent. It is a line item on your costs on an annual basis, and you have to, if you do not understand it, hire somebody who does and get on that.’ Otherwise, you will be the small law firm that in five years does not exist.”

Heather Crichton, the general manager for industry readiness at Pexa UK – an Australian conveyancing technology company – acknowledged that this is a good time to be moving into the UK to ease some of the industry’s pain points with a proven digital solution but found most conveyancers were overwhelmed by a range of options.

“What we have learned from that, and what we hope to bring to the UK, is a more human‑centred design approach that meets the current and future needs of the sector.”

At the same time, Geoff Dunnett, managing director of Shieldpay, which provides managed third-party accounts, cautioned about the need to take “measured baby steps”. He explained: “We can wax lyrical about where we want to get to, but how do we practically get there and improve the lives of people along that way and allow that 40% [of the market made up of smaller firms] to deliver more and provide as good a customer service as some of the others?”

Another push could come from demonstrating that technology can improve firms’ risk management and in turn the cost of their professional indemnity insurance. And that would ultimately filter through into prices, Rob Houghton predicted, making firms more competitive as well.

“There is a market route to achieving technology adoption. It is not necessarily the only source of impetus: the market will have a significant role. The firms that are able to articulate the benefits of the technology will clearly gain.”

Single source of truth

Shorter term is the work of the Home Buying and Selling Group (HBSG), a coalition of organisations from across the property industry working to improve the process.

Beth Rudolf reported that the delayed pilot of reservation agreements is now moving ahead, while recognising that on their own they will not make anybody’s life better and will add another step into the process. The pilot will be looking at the extent to which upfront information about the property needs to be part of the package so that the buyer is only locking themselves in when they know what they are buying.

Related to that is the Buying and Selling Property Information (BASPI), a dataset definition launched earlier this year that is designed to be the ‘one source of truth’ when it comes to information about a property. Ms Rudolf said the hope was that, with Law Society support, it would move from a dataset to a form that can be used for the conveyancing process.

“In the HSBG’s upfront information group, there has been a huge amount of work around how we could get the consumer and the industry to adopt upfront information, and indeed whether we should. There is a discussion around having a logo on all of the portals saying, ‘property pack available’ where certain information is available so that the consumer can choose properties suitable for them and their lender’s requirements.”

Alongside this is the property logbook, a digital asset that will contain all of the property’s history. This will save a huge amount of time if it is a reliable source of information but will take a long time to roll out as it will likely only be created as each property is sold and will need a trust framework to ensure that the provenance of the data is known and reliable.

Invaluable insight

Stephen Ward, director of strategy and external relations at the CLC, said the event, held on the eve of the last day of the stamp duty holiday, also provided invaluable insight into the question: What can the regulators best do to help the market develop?

“We try to be an engaged regulator. We are told we are, so what more could we do? We are very conscious of entering a period in which we might see large-scale and rapid change, or certainly the opportunity for that, and we want to support that.

“We have positioned ourselves at the fulcrum of change by facilitating interaction between different groups of stakeholders, including professionals, suppliers and, of course, clients themselves.

“Innovation is not an end in itself, but we see major potential for it to improve consumer protection and how the housing market functions.”

The Council for Licensed Conveyancers (CLC) has won approval to overhaul how it calculates and collects regulatory fees from the practices it regulates, so it can now recharge more of the cost of the Legal Ombudsman (LeO) to the firms that generate disproportionate levels of complaints.

The oversight regulator, the Legal Services Board, has approved the changes, which will see 30% of the £686,511 the CLC will pay in 2021/22 for LeO’s services levied on 83 firms on the basis of usage. The plan is to increase this to 80% over the next four years.

The CLC has been able to cut practice fees by 42% since 2016 on the back of growth in practice turnovers, control of its own costs and prudent use of reserves, despite the rising costs of the Office for Legal Complaints (OLC), LeO’s official name.

CLC-regulated firms only generated an average of 256 cases in each of the last three years – just 4% of the total handled by LeO – but the levy is a significant cost of regulation; the CLC’s own budget for the coming year is just over £2.2m.

This issue has become increasingly pressing with the LeO’s budget jumping 16.5% to £14.5m as it deals with longstanding performance issues exacerbated by Covid. The move will also incentivise firms to improve their complaints handling, serving the client interest and potentially reducing firms’ regulatory fees. 

Until now, all CLC-regulated firms have paid the LeO levy through their practice fees, which are calculated purely on the basis of turnover. The decision to separate the cost of the LeO is the first of its kind in the legal sector and will reduce practice fees by an average of 23%. Their collection begins this month.

More than half of CLC practices (62%) do not generate any complaints which are referred to the LeO and many more have an acceptable level of complaints though it is widely recognised that the entire sector needs to improve complaints handling. The LeO levy will be collected separately next May when the final LeO costs for its financial year have been confirmed. The payment of the practice fee and the LeO levy are both conditions of licence by the CLC.

All firms will this year share 70% of the costs on the basis of turnover, in recognition of the wider importance of the LeO to consumer protection. The remaining 30% will be allocated on the average number of complaints against each firm accepted by LeO over the previous three years. As a result, most CLC-regulated practices will see their percentage share of total costs fall.

However, 51 practices (23%) will pay more than the 16.7% average increase because they have a higher number of LeO cases.

Two practices will pay an extra £16,000 and £12,000 respectively, 16 firms will pay between £5,168 and £1,044 more (average of £2,095), and 33 practices will pay between £821 and £25 more (average of £289).

The increasing cost of OLC (totalling £14.5m this year) is recovered from all the legal regulators in proportion to the number of cases arising from their regulated communities. The CLC’s cost share for 2021-22 is estimated to be £686,511, which equates to one-third of the sum it will collect to meet the costs of all its own regulatory work (£2.2m) for the coming year. This cost comes even though CLC practices generate small numbers of complaints – an average total of 256 cases over each of the last three years, only about 4% of the total handled by OLC, although that number has increased slightly in recent years.

The CLC has also increased the number of turnover bands for calculating practice fees from four to nine to improve progression to higher bands as turnover increases allowing more practices to benefit from rate tiering as they grow. Most firm’s fee rate will be higher this year than what it would have been under the old bandings.

CLC chief executive Sheila Kumar says: “Despite the CLC reducing its own operating costs in a sustainable and steady way over the past five years, the LeO’s costs – which are beyond our control – have grown, and continue to grow, very substantially.

“While it is right that all regulated practices should contribute to the costs of complaints handling to ensure availability of the service, introducing a usage fee is fairer, builds in better proportionality into meeting LeO costs and will encourage improvements in complaints handling.

“We will monitor the impact of the new approach on complaints handling. The findings will guide the move from the usage element making up 30% of the LeO levy to 80%. This phased approach gives practices four years to address complaints handling and bring referrals down to proportionate levels.

“We are again freezing individual licence fees, continuing the trend of a real terms reduction over several years.”

The CLC has today published its first annual report as required by the Money Laundering and Terrorist Financing (Amendment) Regulations 2019.

The report sets out in the detail, with the help of some useful case studies, how the CLC’s risk-based approach has assisted regulated in achieving compliance with AML requirements and improving the risk profile of the regulated community.

Read the report

One lasting legacy from the pandemic will be the switch to online purchasing. As a nation we have all become far more comfortable with making purchases online before we have seen the goods.

Now imagine extending that online shopping habit to buying a home – where you choose the layout and the décor from the comfort of your own home for it to be then manufactured and delivered in modules where you want it.

It might sound crazily futuristic, but choosing your own home in this way is all part of a new industrial revolution according to the government.

The approach is called Modern Methods of Construction (MMC), a term that encompasses approaches to housebuilding that are quicker and more efficient, and importantly where many of the components are fabricated offsite.

MMC might be a relatively new phenomenon in the UK, but countries around the globe have been benefitting from it for years. Japan leads the way having first embraced MMC 50 years ago, Tokyo has the capacity to build more houses per year than the entire UK.

Elsewhere, Sweden is building at least 45% of new homes off-site in factories, China has set a target that 30% of all new buildings will be constructed off-site by 2026 and Singapore requires all development on government land to use modular construction. 

So, with the UK failing to meet its 300,000 new homes a year target, MMC could be a critical part of solving the UK’s growing housing crisis. To that end the government has even appointed an MMC champion, Mark Farmer, who has responsibility for developing the safety, quality and potential of the industry, which will be worth £40 billion a year once mature.

A report by Farmer recommended that the government should set a target of 75,000 modular homes by 2030. The report say modular housing is ‘the biggest single gamechanger’ when it comes to adding to the country’s housing supply.

The government is also putting strong financial commitment behind MMC. To date more than £233 million of loans have been agreed for MMC projects by the government’s Home Building Fund.

And as part of the March Budget, the then Ministry of Housing, Communities and Local Government announced plans to launch an MMC taskforce backed by £10m of seed funding.

The government has also made MMC a condition of its strategic partnership grant programme, with all strategic partners expected to deliver a minimum of 25% of homes through MMC.

Alongside this, Homes England has also commissioned a significant research programme to evidence the impact of MMC within the housing sector across eight pilot sites, totalling approximately 1,800 homes.

It’s hoped that the evidence of the benefits of MMC use will provide greater confidence to the industry, investors, insurers and customers to support its use across the sector.

Why MMC?

The increased focus is understandable. MMC can deliver high-quality housing at pace and according to the government it has been shown that some homes built using MMC have 80% fewer defects and can reduce heating bills by up to 70%. Some of the main benefits of MMC housing include:

Buyers should also not be concerned about quality as modular homes are built to last the same amount of time as a traditional property.

The new industrial revolution

It is in the North of England where the most exciting innovation in MMC is taking place, in a so-called ‘Northern Construction Corridor’ with digitally designed houses where the computer code feeds directly to the production floor, and the best automation and assembly-line production techniques.

This industrialisation of housebuilding offers a unique opportunity to drive affordability into the sector which can then, in turn, be passed on to the house buyer.

Economies of scale mean that the bigger the orders placed with modular businesses such as this, the better they are able to plan ahead and price competitively.

This means that in the long-term, MMC can be a large-scale solution for every tenure: social housing, home ownership, build to rent and market sale.

One unlikely advocate of MMC is financial services provider Legal & General (L&G) who have created their own modular homes business and factory in Sherburn, Yorkshire. L&G has assembled a team of people with experience in sectors ranging from housebuilding and land development to aerospace and engineering.

Its latest project in Bristol will create 185 new homes in conjunction with the City’s council. Once the land has been cleared and prepared, the homes can be assembled on site within eight weeks.  

The Bristol scheme will create some of the most energy efficient homes in the country with all homes achieving an energy performance certificate (EPC) standard A. The combination of Air Source Heat Pumps, Photovoltaic Cells and high-quality build standards will put them in the top 1% for energy performance meaning significant energy savings for its residents. 50% of the homes will be delivered as affordable housing.

It’s clearly a growing business as Legal & General Modular Homes is currently looking to hire an additional 350 employees into the business this year.

And in a sign that the UK has started to make its presence felt on the world stage, Croydon become the proud home of the world’s tallest modular building this year, just 35 weeks after construction started. The two towers of 101 George Street, developed by Tide and its sister company Vision Modular Systems in its Bedford factory, stand at 44-storeys and 135.6m. It is the tallest modular apartment tower in the world – the same height as the London Eye.

MMC will play a major role in the future of housebuilding. There is no reason to shy away from properties constructed in non-traditional ways and those who set the standards as well as those who lend against them and those who insure them are working together closely. Conveyancers are making sure they know about these new forms of building from the outset so they can make sure buyers understand the implications.

MMC projects are now well under way in the UK, and you can expect to see one coming to a town near you soon.

The Legal Services Board approved on 21 September the CLC’s proposed amendments to its Minimum Terms and Conditions (MTC) for Professional Indemnity Insurance (PII). The changes set out to clarify the extent of cover for cyber-related losses while maintaining consumer protections. Read the Decision Notice

These amendments follow directions from the Prudential Regulation Authority (PRA) and Lloyd’s of London that the extent of cover for cyber-related losses in professional indemnity insurance (PII) policies is clarified. The PRA expects all insurers to have action plans in place to reduce silent cyber exposures, and Lloyd’s requires that all policies must address cyber and exclude or provide affirmative cover for cyber risks.

Full details of the changes are set out in the CLC’s application to the Legal Services Board. Three new defined terms have been added to the MTCs. These are Computer Network, Computer System, and Data (referring to electronic data). The definitions are taken and adapted from definitions in cyber-risks endorsements developed by the International Underwriters Association. We have added a new Cyber-Related Losses Affirmation at 8.13.

To develop this new clause, we took as our starting point a model endorsement drafted by the International Underwriters Association to address the issue of ‘silent cyber’ exposures. The CLC then worked with specialist lawyers and Counsel to draft the new clause at 8.13. That clause retains what are clearly professional indemnity protections for consumers, while clarifying cover for cyber risks as required by the PRA and Lloyd’s. The new wording aims to expressly affirm or grant cover for cyber-related losses to the extent that these are already covered in a non-affirmative way by the MTCs.

The new MTCs will take effect from 1st October 2021 and will apply to policies written after that date. The CLC is in the process of reviewing other aspects of PII, following a Call for Evidence over the summer. A formal consultation on any changes will begin later in 2021.

The home buying and selling process is based on a high level of trust between trusted third parties such as estate agents, conveyancers & lawyers, financial intermediaries and mortgage lenders. The core of the transaction centres on proof of identity and ownership and currently organisations will not trust identity verification carried out by another organisation. This is causing a continuing increase in time to complete the transaction with poor consumer experience and ample opportunity for identity and subsequent fraud.

The common view is that the introduction of a standards based digital identity assurance process, backed by regulators and based on Government standards, should be adopted by the industry.

The CLC is supporting a pilot of a scheme, which will be part of an overall framework set by government. We really need CLC firms to take part so that we can understand the viability of the approach for the future and make sure that it retains or enhances client protection while delivering security for conveyancers.

Find out more, including how to take part:

MY-ID-solicitors-conveyancersDownload

The Council for Licensed Conveyancers (CLC) is planning to start recharging the cost of the Legal Ombudsman (LeO) based on how many complaints each law firm generates, rather than spread the cost across the profession.

The cost of LeO (£14.5m this year) is recovered from all of the legal regulators in proportion to the number of cases arising from their regulated communities.

In the first move of its kind, the CLC has submitted to the LSB for approval a change that removes this cost from firms’ annual practice fees, which are calculated as a percentage of turnover. This will reduce practice fees by an average of 23% across all practices.

The LeO levy will then be collected separately in two parts: a basic availability fee that all firms will pay in recognition of the importance of LeO to consumer protection, and a usage fee based on the number of cases from a firm that have been accepted for review by LeO.

Though CLC firms generate small numbers of complaints – an average of 256 cases over each of the last three years, only about 4% of the total handled by LeO – the charge from LeO amounts to 23% of the CLC’s total expenditure and LeO’s cost per case continues to increase.

Nearly half of the practices regulated by the CLC do not generate any complaints which are referred to LeO and many more have an average level of complaints. Their costs will generally remain the same or fall. Firms with disproportionate numbers of complaints referred to LeO will see their costs rise.

The CLC held a consultation on separating the cost of the LeO levy from the practice fee, which listed the benefits of the change as a clearer distinction between direct regulatory costs and activity-based costs, a fairer distribution of the cost of complaints handling, and an incentive for practices to improve their service levels and complaints-handling processes.

Responses expressed some concern that the approach would instead encourage firms simply to settle disputes rather than address underlying issues – although this is already an issue as LeO also charges firms case fees for complaints it handles. Equally, it can be argued that the user pays approach encourages firms to deal swiftly and appropriately with complaints.

The CLC has clear expectations of regulated entities in relation to their complaints handling and ensures that problems are not being hidden as part of its monitoring and inspection regime.

Separately, the CLC is also submitting to the LSB for approval a new clause in the minimum terms and conditions for regulated firms’ professional indemnity insurance to clarify the extent to which cyber-related losses are covered.

This follows a consultation responding to directions from both the Prudential Regulation Authority and Lloyd’s of London to manage ‘silent’ risk by being explicit on whether coverage is provided for losses caused by cyber events.

The new clause, which will take effect from 1 October, subject to approval by the Legal Services Board, is not intended to increase the coverage provided; rather, it expressly spells out the cover for cyber-related losses that the existing policy was already understood to offer. As a result, it should not affect consumer protection nor insurance premiums.

The range of cyber-related risks covered by the clause include problems with accessing systems; “unauthorised, malicious or criminal” acts; the receipt or transmission of malware, malicious code or similar; and internet failures.

CLC chief executive Sheila Kumar says: “It is vital that regulation is proportionate and both of these changes achieve this in their own ways.

“We believe that placing more of the cost of LeO on those who generate it will encourage those firms to address service issues and improve their complaints-handling procedures, both of which are vital to the client in the relatively small proportion of cases where issues occur. It will also be clearer to firms what they are paying to the CLC for the oversight we provide as a regulator and what is needed to fund LeO’s complaints handling activities.

“At a time of ever-increasing cyber-attacks on businesses of all types and sizes, the clarity brought by the new insurance clause will also help focus minds as to responsibilities.”

Find out more

The rapid adoption of technology because of lockdown could move the conveyancing process from an emphasis on the buyer and caveat emptor to one of vendor disclosure, a Council for Licensed Conveyancers (CLC) roundtable has heard.

Vendor disclosure would put the onus on the seller to ensure that they have provided all the information required – and keep it updated – with failure to do so allowing the buyer to withdraw from the deal without penalty.

The roundtable of major industry players was held last month to consider how Covid-19 had impacted the predictions in the CLC’s Conveyancing 2030 discussion paper, published in January. This said that the role of the conveyancer was undoubtedly going to change as much of the administrative side of the role becomes automated over the coming years.

In short, participants indicated that this process was speeding up.

The pandemic has seen the HM Land Registry progress rapidly with electronic signatures, and Deputy Chief Land Registrar Mike Harlow said it was also promoting digital ID checking as part of efforts to “galvanise” the market.

“You would never have wished the pandemic, obviously, but in some respects, it has given us a shot in the arm to actually get on with some of these things rather than talking about them and waiting for the perfect moment to introduce them.

“Of course, we mustn’t rush and do things that are insecure or later seriously regretted, but it is different now from five or 10 years ago. The technology now is so much better. We’re not in exploratory territory now, we know when we look at other markets how readily available it is, how used it is. You look at other jurisdictions and you see how settled they are in using digital conveyancing processes.

“We should just get on with it and harness some of the energy, enthusiasm, and most importantly though, shared sense of purpose and vision that we seem to have now as a result of the pandemic.”

Olly Thornton-Berry, managing director of Thirdfort, which carries out digital identity and source of funds checks, said lockdown led to a huge increase in take-up of its product. “Law firms went from asking questions about how the technology worked to ‘how quickly can we go live with this?’,” he recounted. “People are much more open minded to this type of technology now, because so much has happened in the last six months.”

Rob Houghton, chief executive of reallymoving and The Law Superstore, said lockdown had proven that “conveyancers are absolutely at the bleeding edge of new technology and new practices compared to most of the rest of the consumer legal industry. In most other areas of law that we deal with, they’re incredibly conservative, and any change at all is treated with huge caution.”

Mark Montgomery, chief strategy officer at Simplify, one of the country’s largest conveyancing businesses, said the main drag on adoption at the moment was firms simply being too busy to contemplate it, given how the property market has rebounded since it reopened in May.

But he suggested too that there was “two-speed industry”, with some firms recognising the need to change the way they operate – including home working – and others not. “It’s tough to see where the second group will be in six or 12 months’ time,” he said.

Mike Harlow stressed with wider importance of this shift in the long road to post-Covid recovery: “Being the most efficient, most attractive, best informed property market that we can be will be the right foundation for that recovery.”

Andrew Lloyd, managing director of search provider Search Acumen, highlighted the importance of the work of the Home Buying and Selling Group – a pan-industry group advising the government – in developing common standards so that data can be exchanged across all the different technology.

Scottish solicitor and professor Stewart Brymer said this was all changing the conveyancing process. “The way I was taught to examine a title was that you worked on the basis of caveat emptor: all the information is thrown at the purchasing solicitor who wades through it, raises queries, some of which will be answered, some of which won’t.

“But now this information comes faster and is more accurate, so I think we have to consider moving towards a vendor disclosure process instead. Giving people more information will speed up the process – without it, we can have all the little digital bits, but they’re not connected and they will be used in the old-fashioned way.”

Andrew Lloyd said there was an alternative. He explained how his company had used the lull caused by lockdown to accelerate its machine learning programme, producing a system that can actually understand the information about a property in the same way a conveyancer does.

“It means you don’t have to rely upon a change from caveat emptor, but you can supply in a very early point in the process a list of risks potentially with the property without relying on a vendor to also have to come forward. Because the vendors themselves are not property experts. You might be asking a series of questions or asking them to fill things out that they simply may not know, or may not have access to, or can’t answer. Whereas if you’ve got a trained conveyancing AI that can consume that information about a property, it can.”

Mark Montgomery said Simplify was working on similar technology. For example, it has built an engine that reads mortgage offers instantaneously and generate an exceptions report, “so large volumes of work that would ordinarily be done by lawyers doesn’t need to be”.

He suggested that, “if the technology moves on in the way that we hope it will”, the shift from caveat emptor to vendor disclosure may be moot.

Beth Rudolf, director of delivery at the Conveyancing Association, asked: “Should we think about the idea of vendor disclosure meaning that, actually, you provide what the buyer needs to see anyway, and caveat emptor is really just that tick at the end to say, ‘I got everything that I need to look at to answer the questions of my client’?

“I think we have the opportunity now to start taking stock and saying, ‘What should we be doing as a professional to provide the best possible comfort for the consumer? Should we be asking all the questions that we ask and just telling them that information, or should we be asking them what questions they want us to ask?’

“We do not need to be showing them all the things that do not apply to the property and that do not create a problem for their intended use and enjoyment of it. By only outlining the exceptions, you are simplifying the process and improving the customer experience and understanding. It is the complexity that puts consumers off reading the huge documents that we currently end up sending out simply because they arrive with us as PDFs or paper.”

Participants were clear that conveyancers would still have a central role in shepherding consumer through the process.

Andrew Lloyd said: “In 25 years’ time, when the kids that are 13 now are buying houses, they won’t think twice about using a robot to tell them it’s okay, but for now, through our 2030 window, you need someone to help the consumer, and who’s the most trusted person in this process? Who in this whole thing do you rely on to look after your interests? And that’s always the conveyancer.

“The conveyancer just needs to re-define their role as that person who is going to be the property professional on their behalf, and let the mundane work be done by machines.”

Mark Montgomery agreed that this would be true of straightforward transactions but there would still be more complex cases where the lawyer’s skill and judgment would be needed. “They will also need to understand that a lot of consumers nowadays don’t want to talk to service providers unless there’s a really good reason to. They’re happy to do it electronically.

“I see the role of the conveyancer becoming potentially more specialised and skilful, but probably in terms of hours applied per case, progressively reducing.”

Stuart Young, managing director of Etive Technologies – which creates online property log books – said that, because of the need to interpret the data, he considered that “the role of the conveyancer has actually never more important”.

CLC chief executive Sheila Kumar says: “Covid-19 has made many conveyancers realise that they need to embrace new ways of serving their clients. It is difficult to do with the property market running so hot at the moment, but the roundtable has served to confirm that the findings of our discussion paper that change is inevitable.

“The CLC recognises the importance of supporting this and ensuring that regulation does not unnecessarily get in the way. We will continue to work with those who took part in the roundtable and the Home Buying and Selling Group to ensure our regulation is proportionate and risk-based.”

The Legal Sector Affinity Group (LSAG), which is comprised of all of the AML regulators in the UK including the CLC, the SRA and the Law Society of Scotland, has today released updated guidance for the legal sector. This guidance is HM Treasury approved, and we encourage CLC practices to review the changes (which are summarised in the Schedule of Amendments section) and make any necessary alterations to their own AML policies and procedures.

 

Find out more

Thank you to everyone who joined the engagement events we held at the end of March and to those of you who have subsequently watched the recordings of the events and provided your feedback. 

In due course we will be publishing further information about the feedback you provided, but we are pleased that the majority of stakeholders are supportive of the proposed new Code and the approach to recording and reporting ongoing competence activities. You can review the proposed draft of the Code here but please note that this is still subject to change. 

Subject to approval by the Legal Services Board, the proposed new Code will be implemented in time for the October 2025 licence renewal process, meaning that from October 2026, CLC lawyers and practices will have to report on compliance with the provisions of the new Ongoing Competence Code.  Please look out for further updates in the coming months.

Work by brokers on this year’s Professional Indemnity Insurance round is well under way and your practice is likely to have heard already from your existing broker.

You should aim to submit your completed proposals by 1 May as this will mean that the insurer should provide a quote no later than 1 June.

The CLC will issue a survey in June to gather information from practices about declared turnover as this will also form the basis for calculating regulatory fees in the autumn.

A week-long celebration that brings together businesses and apprentices across the country to shine a light on the positive impact that apprenticeships make to individuals, businesses and the wider economy. National Apprenticeship Week 2025 will run from Monday 10 to Sunday 16 February 2025 – find out how to get involved and download the toolkit.

#NAW2025. Events Map – (Grid View) –  Media

Sector Skills Council for Justice has been involved in developing a number of apprenticeship standards. Skills for Justice National Apprenticeship Week.

National Apprenticeship Awards

The awards challenge top employers, apprentices, T Level students and those who champion skills across England to come forward and show how apprenticeships and T Levels have made a real difference to their organisation and careers. For the first time ever, the awards 2024 recognised and rewarded the achievements of exceptional T Level students and employers, alongside apprentices, their employers and skills champions.

National Apprenticeship and Skills Awards 2024

Please note the website Conveyancing: Appeal against a decision about your licence, @gov.uk contains incorrect information. The information explained at  ‘How to Appeal to the GRC’ on the CLC website is correct.  The error has been notified to the GRC and awaits correction.

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