Editor's blog | The buck stops with you
Money laundering responsibility has resulted in regulatory requirements, but solicitors don't make it easy on themselves You can question the way in which solicitors' money laundering responsibility has been translated into regulatory requirements – too onerous, too complex – but the principle is right. What isn't is that solicitors somehow usually end up being the ones sued when things go wrong – not surveyors, valuers or lenders. The buck gets passed around, and it usually stops with you. Understandably conveyancers are getting increasingly angry about this, when other property professionals are either not held to account in the same way or profiting more generously without sharing the risk to the same extent. One delegate at SJ live conference last week shared his frustrations about shouldering all the regulatory risk in return for conveyacing fees averaging £1,500 while estate agents would pocket a nifty percentage-based commission for doing little more than introducing potential buyers to the seller. Worse, of course, is that failure to ask the right questions that would help you spot fraud could see you end up in a criminal court, saying goodbye to your professional career. Even lack of diligence in reporting your suspicion could have nightmare-inducing consequences – one experienced lawyer who thought he would discharge his duty on his return from holiday has only just narrowly escaped prosecution, money laundering specialist Alison Matthews told the audience at the residential property stream. The trouble is, there is not much law firms can do to lessen the regulatory burden. At best, they should make sure that their processes are robust enough to protect themselves as tightly as possible against the risk of fraud. But participants and speakers alike agreed that there was no way around their ultimate responsibility: if you certify, you can be held liable. This is so serious that some professional negligence firms are gearing themselves for a rise in claims against solicitors. And if you thought that title indemnity could help, consider this: most are subject to such draconian conditions that make claims virtually impossible. Nobody in a packed audience raised their hands when asked by seasoned property solicitor Paul Tobias whether they have ever had an insurance company pay up on a title claim. Remember however that, as long as conveyancing is a reserved activity, your competitors – including the new entrants – will be under the same duty to comply with these regulatory requirements. Your answer has to be to take them at their own game. You may feel that offering conveyancing for £99 is unprofessional and that you may even lose loyal clients who would believe you have gone down market. But have you tried it – even for a month around Valentin';s Day for young first-time buyers? Before you retort that you may need to increase overheads to deal with the influx of enquiries, just think: clients are now looking for value, they don't care about how much it costs you. This was another theme that ran through several other sessions – and whatever you do, you have got to build that into your next business plan.
Money laundering responsibility has resulted in regulatory requirements, but solicitors don't make it easy on themselves
You can question the way in which solicitors’ money laundering responsibility has been translated into regulatory requirements – too onerous, too complex – but the principle is right. What isn’t is that solicitors somehow usually end up being the ones sued when things go wrong – not surveyors, valuers or lenders. The buck gets passed around, and it usually stops with you.
Understandably conveyancers are getting increasingly angry about this, when other property professionals are either not held to account in the same way or profiting more generously without sharing the risk to the same extent. One delegate at SJ live conference last week shared his frustrations about shouldering all the regulatory risk in return for conveyacing fees averaging £1,500 while estate agents would pocket a nifty percentage-based commission for doing little more than introducing potential buyers to the seller.
Worse, of course, is that failure to ask the right questions that would help you spot fraud could see you end up in a criminal court, saying goodbye to your professional career. Even lack of diligence in reporting your suspicion could have nightmare-inducing consequences – one experienced lawyer who thought he would discharge his duty on his return from holiday has only just narrowly escaped prosecution, money laundering specialist Alison Matthews told the audience at the residential property stream.
The trouble is, there is not much law firms can do to lessen the regulatory burden. At best, they should make sure that their processes are robust enough to protect themselves as tightly as possible against the risk of fraud. But participants and speakers alike agreed that there was no way around their ultimate responsibility: if you certify, you can be held liable. This is so serious that some professional negligence firms are gearing themselves for a rise in claims against solicitors.
And if you thought that title indemnity could help, consider this: most are subject to such draconian conditions that make claims virtually impossible. Nobody in a packed audience raised their hands when asked by seasoned property solicitor Paul Tobias whether they have ever had an insurance company pay up on a title claim.
Remember however that, as long as conveyancing is a reserved activity, your competitors – including the new entrants – will be under the same duty to comply with these regulatory requirements. Your answer has to be to take them at their own game. You may feel that offering conveyancing for £99 is unprofessional and that you may even lose loyal clients who would believe you have gone down market. But have you tried it – even for a month around Valentine’s Day for young first-time buyers? Before you retort that you may need to increase overheads to deal with the influx of enquiries, just think: clients are now looking for value, they don’t care about how much it costs you. This was another theme that ran through several other sessions – and whatever you do, you have got to build that into your next business plan.