CLC

CLC to step up enforcement in effort to be a better regulator

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

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.”

The CLC are, however, now working on “[using the most appropriate of the range of regulatory interventions available” when taking regulatory action, said Ms Kumar.

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 added 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 is also stepping up its efforts to encourage solicitors and legal executives to make the switch. Dame Janet Paraskeva, CLC chair, 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. 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, the CLC say a review of its 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”, with practice fees 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”, said the regulator.

On other issues:

  • Dame Janet called on licensed conveyancers to form a stronger representative voice and leadership to promote the profession in ways that the regulator cannot.
  • She pledged that the CLC would continue to lead the way in adapting regulation to a world of consumer choice and digital technology.
  • The CLC will remain focused on mental health challenges in practice and tell those it regulates to “shout if you’re under pressure”. Sheila Kumar says: “We know things can go wrong and we would much rather people tell us than try to sweep it under the carpet. That is where our assisted compliance approach can really be beneficial.”
  • Though the diversity of the licensed conveyancer community is good – a recent graduation ceremony for students was “full of excitement of people breaking into a profession that they thought was for someone else”, Dame Janet recalls – there is still work needed in improving representation of women and Black and minority ethnic lawyers in particular at senior levels, in common with many other professions.
  • Former Council member Teresa Perchard is assembling a Consumer Reference Group on behalf of the CLC to add to its consumer insight and provide comment and advice on policy and practice.

The CLC has also been sharing the lessons from the Simplify security incident last year. Sheila Kumar said:

“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.”

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