Conveyancing practices and small law firms could be forced to turn away high value property transactions to avoid hitting the £2 million client money threshold proposed in the Solicitors Regulation Authority’s (SRA) recent COLP/COFA consultation.
The warning comes from the Conveyancing Task Force (CTF) following their meeting with the regulator to air their concerns about the proposals which would see firms whose funds held in client account exceed £2 million and whose turnover is above £600,000 p/a have to separate the compliance officer roles from those within the organisation who have “unilateral decision making” responsibilities.
The CTF further warned the proposals failed to account for regional variations in property values and could result in conveyancing work being diverted to “larger providers (reducing) consumer choice.”
Last week the SRA confirmed it would “pause” the changes due to come into effect from January 2027, to “take stock” following backlash from members of the legal community including the CTF and the SME and Boutique Law Firm Alliance.
An open letter published following the CTF’s meeting with the SRA urges the regulator to provide clear evidence and detailed analysis before progressing with controversial changes to COLP and COFA requirements for legal practices.
The group said it welcomed the pause in implementation but warned the proposals, as currently framed, risk imposing disproportionate burdens on small firms without demonstrating they would improve client protection. The CTF emphasised regulators must ground policy decisions in real‑world practice: “No regulator should operate in a vacuum. Practitioners’ first-hand experience must inform both the design of regulatory requirements and the assessment of their practical consequences.”
Echoing the concerns raised by the Law Society and the SME and Boutique Law Firm Alliance, the CTF said the impact would be most keenly felt by small practices which provide employment, support their local economies and offer accessible, personal legal services: “Regulatory requirements carry cumulative costs in money, management time and fee-earning capacity. An additional obligation can threaten a firm’s viability.”
In its letter, the CTF has sought clarity from the SRA on four “core questions”; how effectively current COLP/COFA arrangements detect and prevent serious regulatory failures; how the failures cited by the SRA were identified, what information the regulator already held, and what action followed; what evidence shows the proposed changes would have prevented or detected those failures; what data supports the proposed turnover and client‑money thresholds, and whether they are appropriate across diverse business models.
The CTF has also called for a full analysis of historic regulatory failures, distinguishing deliberate wrongdoing from technical breaches, and assessing how risks vary across ownership structures and governance models.
Commenting CTF Chair Stephen Larcombe said: “We support strong, effective client protection. But reforms must be grounded in evidence, proportionate to risk, and sensitive to the realities of small‑firm practice. We look forward to the SRA’s substantive response and remain ready to contribute practical insight to ensure regulation strengthens, not weakens, the sector.”
