Conveyancers pin survival hopes on new accreditation scheme

25 Oct 2010|News|Add your comment

Property lawyers have welcomed the idea of a new accreditation scheme for conveyancers but some are already doubting whether a scheme intended to raise professional standards and help the profession fight off new entrants will have any effect in practice.

One of the worst areas affected by the recession, residential conveyancing is also under pressure to reduce costs as the lawyer-on-lawyer price war increases and it is about to face even tougher competition from non-lawyer organisations when ABSs go live in October next year.

Add to this the rising costs of professional indemnity insurance and panel culls, and the picture is particularly grim for conveyancers, said Law Society president Linda Lee as she launched the new Conveyancing Quality Scheme (CQS) last week at the property section annual conference.

The scheme is supported by 84 per cent of solicitors, Lee said, but voices in the audience made clear lawyers' concerns over the value of the new initiative, with some saying the success of the scheme depended not so much on tough new standards but more on a complete re-education of all professionals involved in the conveyancing market.

One solicitor from Worthing suggested his experience in relation to Lexcel didn't necessarily bode well for the CQS. His firm, he said, was Lexcel-accredited but this had been of little use in practice. 'Nobody knows what Lexcel stands for '“ the public don't know anything about it and estate agents are not interested. It's only meaningful to other solicitors,' he said.

Another asked about the costs involved. Linda Lee said it had been decided that the costs should be borne by individual firms rather than by the Law Society, but that these had been set at a level that was deemed 'affordable'. Panel chair Michael Garson said for most firms this would be 'less than four-figure'.

A third solicitor addressed the question on most conveyancers in smaller firms who have been struggling to secure professional indemnity cover. 'Will insurers offer special rates to accredited scheme members?' he asked. The president's reply was that the profession would first need to prove that the scheme delivers but she said that insurers '“ who have been involved in the design of the scheme '“ were positive about it.

Perhaps more importantly, the scheme should also help tackle the growing problem of mortgage fraud. Jonathan Smithers, vice chair of the conveyancing and land law committee, and one of the lawyers behind the scheme, said it was essential to move solicitors towards being lead members of a new 'trusted community' and restore the profession's credibility as low-risk clients for insurers.

'The Council of Mortgage Lenders has a bigger perception of risk than actually is the case,' he said. 'It's easy for lenders to see fraud and blame solicitors instead of blaming the fraudulent clients.'

In this sense, monitoring probity is not simply a matter of professional standards; it becomes a measure of risk that can help reduce negligence claims and can influence insurance levels.

'Lexcel is about management standards and nothing to do with the quality of advice,' said Jonathan Smithers, adding the new scheme will be the first to focus on service.

'The idea, among other things, is to raise quality so that it makes negligence claims less likely, and insurers like that,' Smithers continued. 'Being a member won't make your indemnity premium go down, but it's more likely to go up if you're not in the scheme.'

Smithers accepts that the success of the scheme depends on take up and said that it will be promoted through referrers. But the risk, he said, is that if the profession does not address the issue itself, the chances are that the government or the regulators will.

The scheme, which will be piloted in the run up to Christmas with a view to going live next year, will involve checking the identity of members and require compulsory credit and criminal records bureau checks for partners or directors, key staff in the firm's conveyancing department, and employees in the accounts department '“ who have access to funds.

Individuals will have to comply with CPD requirements, with a new scheme being developed for non-lawyers. Member firms will also have to adhere to the conveyancing protocol which is being updated at the same time.

The Law Society will carry out cross checks in respect of CRB and credit checks. These costs will come in addition to application and membership costs (see table below for details of costs).

171512

* plus VAT at 17.5%. CRB and credit checks for each individual declared by the firm to be added on top

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In this sense, monitoring probity is not simply a matter of professional standards; it becomes a measure of risk that can help reduce negligence claims and can influence insurance levels.