What lessons should we learn from recent Flooding events?

What lessons should we learn from recent Flooding events?

As the flooding of the last few weeks pales into a near distant memory, at least for those of us unaffected, what lessons should we draw?  Well, even before the floods arrived, the message coming out from all the Conveyancing CPD presentations we worked alongside last year was about flood risk having increasing significance for conveyancers.   Not least because of:

–         The expiry of the Statement of Principles between the Association of British Insurers and Government

–         The emergence of Flood Re to replace the Statement of Principles from 2015, where it is still not really known how it will work, other than to add at least £10 / household to our Home Insurance Premiums next year

–         The reductions in promised Government funding on UK flood defences leaving homes exposed to increased risk and giving rise to the difficult negotiations to conclude the first two items above

–         The potential claims from lenders and homeowners further down the line, as they find either they can’t get insurance, premiums become excessive and / or policy excesses become unrealistic, hence properties lose value, or even become properties that cannot be sold.

–         The increasing flooding headlines, even before the current spate of bad weather

–         Flooding not just being about river and coastal flooding — surface water flooding is perhaps the bigger and unrecognised risk.  Even houses built on hills can be at risk, as water cascades down across open fields, across the road and through your front door!  This point has also been hammered home in January and February with news reports that flooding could go on into Spring due to the saturated ground, so water comes up from beneath.

–         Local Authorities continuing to make financial cuts and those are now falling in the Environmental and Planning departments.  Fewer staff are dealing with applications causing delays, with large tracts of land are going uncharted.  Planning restrictions have been eased so applications in flood plains are unlikely to be challenged hard by planners.

–         The increasing sophistication of flood modelling that is now available to the Insurance industry to predict surface water flooding leading to more targeted risk assessment by Insurers. Properties in the same road could have differing premiums for the same cover

Going forward, the message for firms therefore has to be one of tightening compliance towards “belt and braces”.  In much the same way as contaminated land became an issue when it first emerged and is now an accepted norm, so flood risk needs to be considered in a similar vein.  So:

–         Ensuring Terms of Business carry effective Environmental exclusion clauses

–         Purchasers are encouraged to consider very carefully taking out a Flood search and an assessment based on the results — despite the often encountered assertion that they know the area very well and it has never flooded before!

–         Training conveyancers in a revised approach to flood risk, particularly with distance conveyancing – several instances have already emerged of conveyancers in the same firm having differing views and procedures to flood risk

–         Being aware of what lenders impose through the CML Handbook

As a consequence I’ve been highlighting the issues with firms at Compliance Reviews and generally as I’ve worked with retained clients.  Possibly the greatest concern is the approach adopted in cut-price conveyancing, when clients sign a disclaimer to complete their transaction without any searches.  Introductory paragraphs to these indemnities pay little attention to the potential impact of flood risk for what could be a relatively modest premium.

And finally, don’t forget for most firms its perhaps another entry for the Risk Register.

Legal Eye

https://www.legal-eye.co.uk/

Legal Eye works with law firms to ensure compliance and optimise performance. Their extensive and thorough knowledge of the law and regulations will ensure your law firm is compliant and your processes sound. Files are audited to ensure you are not only complying with the service level agreements you have in place, but very importantly, also the code of conduct.

They provide a documented audit trail which is firstly, a requirement of the code of conduct and secondly, essential for PI Insurance purposes and very often for CQS, Lexcel and other quality accreditations. This provides documented evidence of a proactive approach towards risk management. The advice they offer is clear and practical, and they pride themselves on exceptional customer service and unbeatable work quality.

Services include:

  • Specialist expertise across the full range of regulatory, risk and compliance issues to inform your internal decision making.
  • Additional qualified resource where you simply do not have the time to review your regulatory position or to carry out essential ongoing tasks such as file reviews.
  • An online risk hub –  an online resource centre for law firms. The hub provides a comprehensive bank of resources to help COLPs, COFAs, partners, directors and managers to manage risk. It includes precedent policy and procedure documents and templates, access to online training on a range of risk and compliance topics, and a range of useful materials such as ‘how to’ guides, short videos and articles.
  • Drafting and review of key policies and procedures including the supply of ‘document packs’ to save you time researching and writing documentation.
  • Expert advice on how to comply with up-to-date regulation including the very latest requirements complete with a written set of recommendations.
  • Specialist outsourced complaints  handling service provided by former SRA and LeO officers.
  • Gap analysis of your firm’s policies, processes and procedures as they relate to the Solicitors Accounts Rules (SAR) including the production of a written report summarising the strengths and weaknesses of the current arrangements and detailing recommended next steps and actions to put your firm in an even stronger position.
  • Training on SAR and on anti money laundering (AML) as well as other finance-related training which can be delivered virtually for your firm, face-to-face (subject to government guidance) or online via Legal Eye’s Training Academy.
  • A Standard Procedures Manual to provide a practical and comprehensive roadmap for firms to follow when looking to double check whether the current operating procedures are fit for purpose, setting up a new firm – or arm of a firm – or starting a new finance function from scratch.
  • Experienced advice and support for one-off projects such as achieving quality accreditations or switching regulators.
  • Proven high quality training for fee earners and staff held at your office/s covering essential risk topics such as  Anti Money Laundering, data  protection, cybercrime, conflict of  interest and more.
  • Online training from The Legal Eye Academy – core modules available to all staff at their convenience. Includes built-in auto reminder functionality so that you no longer have to chase staff indi-vidually to complete important training. Your package includes free updates to ensure knowledge is always up to date.
  • Added value updates by email to all your key people covering all the latest updates on risk and compliance.

The Legal Eye team includes former solicitors, partners and directors in law firms; former case handlers at regulators such as the Solicitors Regulation Authority and the Legal Ombudsman and experienced risk and compliance professionals.


Contact: Paul Saunder

Tel: 0203 0512 049

Email:  [email protected]

Address
The Old Grammar School
Church Road
Thame
Oxfordshire
OX9 3AJ

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