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Switching to CLC regulation

The freedom to choose regulator was created by the Legal Services Act 2007 but was not a practical option for SRA-regulated firms because of the SRA’s requirement that a firm transferring to another regulator should take out run-off professional indemnity insurance cover as if it was closing. This made transfer between regulators prohibitively expensive. The SRA announced on 13th July that the requirement will be lifted, subject to approval by the Legal Services Board, by 1st October 2017.

The CLC is already working with a number of firms who have been waiting for this announcement from the SRA. Any other firm considering moving into the CLC’s regime for specialist conveyancing and probate lawyers should contact us as soon as they begin to think about the possibility.

The CLC’s regulation of specialist conveyancing and probate lawyers delivers high standards of consumer protection and supports innovation in the delivery of legal services. We always advise firms to discuss their plans with us at an early stage so that we can give them guidance about the best way to take their application forward and whether CLC regulation is right for their firm. This is just as important for established firms looking to move between regulators as for start-ups just entering the market. 

 

Frequently asked questions

 

Who will be dealing with my application?

Claire Richardson leads the CLC’s Licensing Team.  She can be reached on licensing@clc-uk.org or through 020 7250 8465. You might also be contacted by our Director of Policy and Standards, Simon Blandy or Director of Operations, Jason Hinrichsen.  

 

What legal services does the CLC regulate?

Conveyancing (sometimes referred to as Reserved Instrument Activities) and probate activities.  The CLC also regulates will writing.  CLC practices may only deliver those legal services which the CLC has expressly licensed them to provide.  Please let us know if you provide any other services.

 

Does the CLC regulate Alternative Business Structures (ABS)?

Yes.  The CLC was the first legal regulator to be authorised to license ABS (practices which are owned and/or managed by non-lawyers).

 

Can a Solicitor or FCILEx be a manager of a CLC practice?

Yes, and we would expect you to be a specialist conveyancing or probate lawyer.

 

How quickly can you process the application?

You can start talking to us about switching immediately. Once you have registered your interest Claire Richardson will arrange a convenient time to talk you.  

The first part of the process, which is at no cost to you, is for you to tell us about your practice. We will ask you to provide some standard information about the business for us to review. Once you have provided us with a complete set of documents, we will aim to let you have a decision in principle within 3 working days as to whether you are eligible to apply to switch to CLC regulation.

The final arrangements in relation to PII for transferring firms are still subject to SRA and LSB approval, which we anticipate will be announced some time before 1st October 2017.

 

Are the application forms available on the website?

No. It will help you and us to have a conversation with you about your practice before you set about completing any forms.

 

Can I speed up this process?

Following a decision in principle, the application process moves on to Experian checks for key personnel. These can take up to 6 weeks to process after the application has been made. If you are confident that you will be able to meet our criteria for licensing you can choose to pay for the standard Experian checks when you submit your business information for us to review. Otherwise you may choose to wait until you submit your formal switching application.

Experian charges (between £80 and £90 per individual) are non-refundable and the results are valid for 12 months.

 

What type of assurances is the CLC looking for?

The CLC is looking to regulate well managed practices with motivated managers and dedicated staff.  You will need to identify the risks to the business and to have policies and processes which will appropriately mitigate those risks.

 

Can I retain panel membership if I switch regulators?

This should not be a problem.  You will need to speak to panel managers to let them know that your practice is switching regulators and keep them informed of progress.

 

What are the Professional indemnity insurance (PII) requirements for CLC practices

All CLC practices must obtain PII from an insurer which has entered a Participating Insurers Agreement (PIA) with the CLC.  Those insurers are listed on the CLC website.  Other insurers will be included as they sign up to the PIA.

 

Can I continue to source PII through my current insurers?

Yes, provided they sign up to the CLC’s Participating Insurers Agreement.

 

Will I have to pay for run off cover?

This is dependent on the LSB approving the SRA’s application to amend its rules so that run off cover is not triggered when a practice switches regulator (currently expected to be on or before 1 October 2017).  

Even after the change in the SRA rules has come into force, whether SRA run off cover is triggered (and payable) will be dependent on your particular circumstances, and in particular whether the PI insurers of the CLC Practice (once it has been licensed) are willing to provide PII cover for any claims made against your former practice.  We will be able to explain the factors which need to be taken into account and give you details of anyone else you should contact.

 

What are the application fees?

The fee for a Recognised Body application is £150.00 and an ABS application fee is £1200.00. In addition you will be charged individual application fees and Experian charges for key personnel and all owners.

 

What are the CLC’s regulatory fees?

Please see the CLC Fees Framework.  Examples of the fees which can be paid are at page 14 here.

 

Contact us

Our Licensing Team, headed by Claire Richardson, will be very happy to discuss your plans in confidence, explore whether regulation by the CLC is right for your firm and support you through the transfer process.  

Email them on licensing@clc-uk.org 

 

Background on the CLC 

A history of innovation

The CLC and the profession of Licensed Conveyancer were established by parliament in 1985 to foster competition in the provision of conveyancing services. We were able to license businesses that had outside investment, long before the 2007 Legal Services Act introduced Alternative Business Structures across the rest of the sector. So our expertise in regulating commercially-minded legal service providers has deep roots.

We take a proactive approach built on close engagement with the firms we regulate to help practices to address difficulties before they become serious or pose a threat to consumers. The Legal Services Board has noted that we take a ‘consistent and risk-based approach’, are able to take ‘targeted action depending on the risk posed’ and ‘allow practitioners to be innovative in the way they deliver their products’.

Three-quarters of CLC Lawyers say that regulation by the CLC provides value for money and supports innovation and growth in their businesses and that being regulated by the CLC is either ‘extremely’ or ‘mostly’ beneficial to their businesses. 

 

Key points to note about the CLC regime

Specialist regulation of specialist lawyers

Our Code of Conduct and approach to regulation are closely tailored to the property specialisation of those we regulate whether in conveyancing or probate. In common with other regulators, our focus has moved towards entity regulation away from regulation of the individual and is outcomes-focused, not rules-based. We strive to take a genuinely proportionate and evidence-based approach supporting innovation in the way legal services are delivered. 

Accreditation Schemes

The fact that CLC-regulated entities are specialists means there is no need for accreditation schemes on top of regulation. Expertise is guaranteed through specialisation of regulation and practice. 

Referral Fees

The CLC’s Code allows referral fee arrangements subject to absolute transparency with the client from the outset. The requirements are set out in our brief Disclosure of Profits and Advantages Code.

 

Find out more 

Contact us on licensing@clc-uk.org to have a conversation with our Licensing Team about how you could benefit from regulation by the CLC.