The Council for Licensed Conveyancers (CLC) has launched a consultation on proposals to change how its contribution towards the Legal Ombudsman is paid, so that those firms who generate more complaints contribute more to the levy.
The proposals are designed 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” according to the regulator an reaffirms their current stance on the subject.
The current formula for contributions to the OLC Levy was first consulted on in 2021 and is a 70:30 split; with 70% of what is called the “service availability charge” (a standing charge for all practices regulated by the CLC) allocated to all CLC regulated firms, and 30% allocated to individual practices based on usage.
The proposals outlined in this year’s consultation is to move this to a 50:50 split recognising 57% of practices regulated by the CLC have had no cases accepted for investigation by LeO in the last three years. It says it is only fair the cost burden is borne by those who generate the most complaints.
The proposal is part of the CLC’s annual consultation on fees and charges in which it also outlines proposals to increase practice fees by 9% but maintain Compensation Fund Contributions, Individual License Fees, and Administration and application fees. CLC licence fees will remains £400 for either conveyancing or probate or £475 for both, a level unchanged since 2010.
This year’s consultation shows how the regulator has released excess reserves back to the profession and operated a deficit budget in recent years. As a result, the CLC says it managed to reduce practice fees by 60% between 2017 and 2022. However, reserve levels are now at a level the CLC needs to maintain, and so full operating expenditure needs to be charged back to the those it regulates.
The regulator points to a number of mitigating factors in its efforts to continue it’s work and reasons for raising practice fees by 9%. As a result of the COVID-19 pandemic the CLC says it has faced both rising costs and falling practice turnover; aggregate practice turnovers fell by 4% in 2023 and a further 1% in 2024. As practice fees are based on turnover, this has meant lower income for the CLC.
It says the growing compliance requirements around anti-money laundering and regulatory requirements laid down by the Legal Services Board (LSB) have resulted in further investment. The CLC’s budget will be £2.78m as a result, with the extra money used on resources, including staff to support:
- Policy development, with a focus on consumer-focused regulation, post completion, handbook and regulatory framework updates picking up on matters in CLC’s recently launched risk agenda;
- Enquiry and complaint handling; and
- Additional capacity in monitoring and licensing to improve data collection, analysis and interpretation, as well as specialist investigation capability.
Commenting on the consultation and year ahead CLC Chief Executive Sheila Kumar says
“The CLC has worked hard over several years to absorb rising costs, recognising that times have been tough for conveyancers. The Executive team has worked closely with the CLC Council to balance the need to maintain its regulatory approach and accommodate changing levels of expectations of regulators. However, we believe that now is the time to invest to ensure that our high standards of consumer protection and promotion of the public interest endure while continuing to provide the regulatory system that specialists appreciate.”
“We first split the cost of the Legal Ombudsman levy in 2022, so that those generating more complaints bore more of the burden, and this year marks the first step of our stated goal of increasing the share that is met by practices originating disproportionate levels of complaints. We believe this is equitable and should also act as a strong incentive for firms to ensure they deal with complaints quickly and fairly.”
The consultation runs for eight weeks and closes on 6th September.
2 responses
At last a sensible policy from the CLC.
But actually isn’t the real solution to keep a close eye on those firms who receive all the complaints (we all know who they will be) and regulate them better to ensure their standards improve and their staff are properly trained. Be proactive not reactive? Regulators are supposed to regulate, not pick on easy targets.
Such a decision for those who are somewhere between inept and criminal should pay could put Lloyds Bank out of business or the Nasty Westminster Group or the Clydesdale Banking group who need their vessels to grow up and would simply put them out of business -with our cash. Currently these banks are ONLY OBSTRUCTING ACCESS to our CASH for their more presbyterian masters the Churches of Scotland whose MODERATOR ( the churches man with a big stick to control their parishoners and others )