CLC steps up use of enforcement powers and intensifies monitoring
The regulator is seeing a steady rise in the number of firms switching to CLC regulation
The Council for Licensed Conveyancers (CLC) is making greater use of its enforcement powers to ensure it is a proportionate regulator, according to chief executive Sheila Kumar.
CLC chair Dame Janet Paraskeva said it will step up efforts to encourage firms and lawyers from other parts of the profession to switch to CLC regulation.
The two leaders were speaking as the CLC closed its consultation on refreshed ethical principles and new strategic objectives, and launched a new consultation on continuing professional development (CPD).
Kumar said the post-lockdown conveyancing boom did not lead to an increase 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 said.
“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 ‘assisted compliance’, which means the CLC works with the firm to bring it ‘into line’ within a reasonable timeframe.
Kumar said this timeframe is not infinite and requires a firm commitment to “put things right”. Years of experience of the assisted compliance approach has led, in some cases, to shorter timelines being 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,” said Kumar.
“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.”
The CLC has intensified its monitoring and inspection of firms, she said, with its regulatory supervision managers in regular contact with firms to “head off” potential problems. They are now also supported by a new cadre of more junior regulatory supervision officers to deal with lower-level compliance work.
The CLC said it had been working for some years to encourage firms run by solicitors and legal executives to join its community. Dame Janet said progress had been slow because of issues such as run-off cover and lender panels, as well as the covid-19 pandemic. However, these issues have now been resolved and numbers are rising.
“It’s about choice,” Dame Janet said. “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.”
A review of the CLC’s business processes has also 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.
