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This is an archived version of the Handbook and,
as of 31 December 2024, is no longer in force.

Handbook

Regulatory Arrangements Universal (archived) down arrow

Regulatory Arrangements Specific (archived) down arrowup arrow

OverviewActing as Ancillary Insurance Intermediaries CodeActing for Lenders and Prevention and Detection of Mortgage Fraud CodeLicensed Body (ABS) CodeLitigation and Advocacy Code SupplementaryRecognised Body Code

Other (archived) down arrowup arrow

This is an archived version of the Handbook and,
as of 31 December 2024, is no longer in force.

Handbook

Overview

The CLC’s regulatory regime is underpinned by the Handbook which sets out the regulatory responsibilities of all individuals and firms regulated by us. The current Codes and Guidance are set out below and at the links to the left.

Following consultation, the CLC will introduce a new, revised overarching Code of Conduct with effect from 1st January 2025.

There are some consequential changes to many of the subsidiary Codes.

The revised versions of the Code of Conduct and the affected subsidiary Codes are available here.

We urge all CLC practitioners to familiarise themselves with the changes ahead of 1st January 2025.

Handbook – Regulatory Arrangements Universal

Overview

The regulatory regime is underpinned by the Handbook which sets out the regulatory responsibilities of all individuals and firms regulated by us.

Introduction

The Legal Services Act

The 2007 Act introduced Regulatory Objectives championing the interests of consumers of legal services:

The objectives focus upon the principled behaviour of legal services providers and the interests of the consumer and the public. They are therefore best supported through regulation based in principles and focused upon positive Client Outcomes.

Outcomes-focused and principles-based regulation

Our regulatory arrangements must uphold the Regulatory Objectives and are therefore concentrated on delivery of high standards alongside the 3 Cs of client, competition and choice.

The Code of Conduct is the parent document of the CLC Handbook and Frameworks; it sits above all other Codes in our regulatory arrangements and must be complied with at all times in the delivery of all its authorised reserved legal activities and permitted non-reserved legal activities, as specified in the CLC licence. It specifies the Outcomes you as members of the CLC regulated community are expected to deliver. The following behaviours are considered essential to delivery of these Outcomes:

  1. Act with independence and integrity.
  2. Maintain high standards of work.
  3. Act in the best interests of Clients.
  4. Comply with duty to the court.
  5. Deal with regulators and ombudsmen in an open and co-operative way.
  6. Promote equality of access and service.

These six Overriding Principles are derived from the Regulatory Objectives set out above. The six have equal ranking and permeate our entire regulatory arrangements; you/the body you own or manage must act in this principled way at all times. The Overriding Principles are underpinned by Principles and Specific Requirements:

Outcomes – delivery of a positive result for clients; it is the end result of the applications of a principle or specific requirement;

Principle – an essential quality; a characteristic, behaviour or ethic, which must be demonstrated so that positive outcomes are generated for clients;

Specific requirement – a strict direction for conduct.

Should a circumstance present an apparent conflict between a principle and another regulatory requirement you should opt for that which delivers the most positive Outcome for the Client concerned whilst maintaining independence, integrity and high standards of work. If in doubt, contact the CLC for advice.


Minimising prescription

Our regulatory arrangements are intended to ensure that clients receive a service tailored to their needs; and legal service providers develop new and different ways of delivering services to their clients. We will always look to provide principles rather than specific requirements wherever possible in order that we promote, not just allow, competition and choice. More prescriptive, ‘specific requirements’ are present only where they are required in the public interest and to protect the consumer. Such non-principled regulatory requirements will be applied in a principled-based way wherever possible so that any penalty imposed is proportionate to a breach.

In providing you with flexibility we are also giving you responsibility – of good governance, quality assurance and risk management. The Guidance attached to Codes is there to provide useful information to the regulated community and in the case of Example Policies or Procedures to provide a possible route to the positive outcomes sought, but importantly, not the only route. If you are able to generate the same or better outcomes another way you are free to do so.


Applicability of Codes

All the Codes underpin the Code of Conduct and are in place to support the delivery of that Code’s Outcomes. The relevant Code of Conduct Principles and Specific Requirements are referenced in each Code so each one can be referenced as a standalone document where needed. The Universal Codes pertain to all Regulated Services which a body provides. All individuals/bodies regulated by the CLC must comply with these Codes. The Codes identified as Specific – located in the rear of this Handbook – are relevant only to those bodies specified, or those providing the identified services.

We retain the discretion to waive a particular requirement of the regulatory arrangements. A body may apply for a modification of its licence to this end or we may apply a waiver due to particular circumstances.

Words presented in bold italicised font – such as Regulated Services above – are defined in the Glossary of Terms provided at the rear of this handbook.


Frameworks & Policies

We currently operate the following 7 Frameworks:

These define our operating parameters, setting out the process which will be followed in the relevant instances e.g. the Compensation Fund Operating Framework sets out the rules by which the CLC manages its compensation scheme. We have provided the Compensation Fund, Continuing Professional Development and Professional Indemnity Insurance Frameworks within the CLC Handbook for your reference. The remaining frameworks are available to view on the CLC website (along with the 3 provided here and our Fees Framework) and are not provided in the Handbook as they are the frameworks under which you applied to be regulated by us, and through which your licence or certificate was granted.

Policies mandate the performance of our activities. They set out the principles and values which will be applied in our approach to the relevant instances. The CLC Regulation and Enforcement Policy is provided in the Handbook due to its relevance to all of the CLC regulated community and to the regulatory arrangements set out in this Handbook.

The Regulation section of the Policy explains what we as a regulator of legal services are seeking to achieve and how our regulatory philosophy is put into practice. The Enforcement section explains how we identify and respond to non-compliance with our regulatory requirements and the factors which determine the form our response takes.

This Handbook and its accompanying Frameworks come into force on October 6th 2011, on which date the CLC Rules and Guidance Notes which they replace cease to have effect, save and except as the same still subsist or are capable of taking effect. The CLC can still take action in respect of any breach of the CLC Rules and Guidance Notes, which occurred before 6th October 2011.

Welcome to the CLC!

Code of Conduct

This Code will be revised with effect from 1st January 2025. See the new version of this Code.

To view the printable PDF version, please click here.

Introduction

This Code of Conduct was made in accordance with s.20 of the Administration of Justice Act 1985; s.53 of the Courts and Legal Services Act 1990; and s.83 of the Legal Services Act 2007.

All individuals and bodies regulated by the CLC must comply with this Code and its associated regulatory arrangements. In this Code “you” refers to individuals and bodies (and the employees and managers within them) regulated by the CLC. You must not permit anyone else to act or fail to act in such a way as to amount to a breach of this Code. Your main driver should be the delivery of positive client outcomes. The Code comprises principles and specific requirements, which taken together deliver positive Outcomes for your Clients and, particularly in relation to Overriding Principle 6, for others you deal with.

To effectively secure the protection of, and the provision of choice for, the consumer of legal services, you must at all times comply with the following Overriding Principles:

  1. Act with independence and integrity;
  2. Maintain high standards of work;
  3. Act in the best interests of your Clients;
  4. Comply with your duty to the court;
  5. Deal with regulators and ombudsmen in an open and co-operative way;
  6. Promote equality of access and service.

These are underpinned by principles of behaviour which must be demonstrated and specific requirements which must be complied with in order that the Overriding Principles are supported.

Disciplinary proceedings may be taken against you if the CLC believes there has been a breach of this Code, meaning that clients do not receive the standard of legal services they should reasonably expect to receive. The CLC’s response will be informed by the CLC’s Regulatory and Enforcement Policies.

In exceptional circumstances the CLC may waive a provision, or provisions, of the regulatory arrangements for an individual, body or circumstance for a particular purpose, or purposes, and with the conditions specified in the waiver.

Overriding Principle
1. Act with independence and integrity

Outcomes – you must deliver the following Outcomes:

1.1 Clients receive good quality independent information, representation and advice;
1.2 Clients receive an honest and lawful service;
1.3 Client money is kept separately and safely.

Principles – delivery of these Outcomes requires you to act in a principled way:

  1. You do not allow your independence to be compromised.
  2. You act honestly, professionally and decently.
  3. You do not conduct yourself in a manner which may result in a breach of the law nor in any other manner which may bring the legal profession into disrepute.
  4. You carry on Reserved Legal Activity only through a person entitled to carry on that activity.
  5. You do not give false or misleading information relating to the provision of Regulated Services.
  6. You do not allow fee arrangements to prejudice your independence or professional judgement.
  7. You do not conduct business under a misleading name.
  8. You keep Client money safe.
  9. You do not publicise your business through unsolicited communications in person or by telephone.
  10. Your advertising is clear, accurate and fair.
  11. You keep Client money entirely separate from your money or the money of the entity.
  12. You do not take unfair advantage of any person, whether or not a Client of the business.

Specific Requirements – you must also comply with the following specific requirements:

  1. You comply with anti-money laundering and prevention of financing terrorism legislation.
  2. When acting as a CLC licensee, you accept instructions only to act in a matter which is regulated by the CLC.
  3. All business communications, websites and office premises display information confirming the entity is regulated by the CLC and the practice licence number.
  4. You display the CLC secure badge in a prominent place on your website.
  5. You provide Cost Information in a prominent place on your website and by other reasonable means on request.

Overriding Principle
2. Maintain high standards of work

Outcomes- you must deliver the following Outcomes:

2.1 Clients are provided with a high standard of legal services

2.2 Client matters are dealt with using care, skill and diligence

2.3 Appropriate arrangements, resources, procedures, skills and commitment are in place to ensure Clients always receive a high standard of service.

Principles – delivery of these Outcomes requires you to act in a principled way:

  1. You provide the level of service appropriate for, and agreed with, the Client.
  2. You keep your skills and legal knowledge up-to-date.
  3. You ensure all individuals within the entity are competent to do their work.
  4. You supervise and regularly check the quality of work in Client matters.
  5. You comply fully with any undertaking given by you.
  6. You systematically identify and mitigate risks to the business and to Clients.
  7. You promote ethical practice and compliance with regulatory requirements.
  8. You enable staff to raise concerns which are acted on appropriately.
  9. You maintain proper governance, management, supervision, financial, and risk management arrangements and controls.
  10. You administer oaths, affirmations and declarations properly.
  11. You deliver services in accordance with timetables reasonably agreed with the Client.

Specific Requirements – you must also comply with the following specific requirements:

  1. Control of an entity is from a permanent fixed address in England or Wales.
  2. A Manager who is an Authorised Person(s)/Parties is responsible for ensuring that all of the entity’s employees are properly supervised.
  3. You make provision for alternative supervision arrangements in case of illness, accident or other unforeseen event.
  4. You maintain proper records to evidence your arrangements and controls and how they are applied.

Overriding Principle
3. Act in the best interests of your Clients

Outcomes – you must deliver the following Outcomes:

3.1 Each Client’s best interests are served;

3.2 Clients receive advice appropriate to their circumstances;

3.3 Clients have the information they need to make informed decisions;

3.4 Clients are aware of any referral arrangements and that they are consistent with your responsibilities both to them and to the CLC;

3.5 Clients are aware of any limitation or any condition resulting from your relationship with another party;

3.6 Clients’ affairs are treated confidentially (except as required or permitted by law or with the Client’s consent).

Principles – delivery of these Outcomes requires you to act in a principled way.

  1. You only accept instructions and act in relation to matters which are within your professional competence.
  2. You keep the interests of the Client paramount (except as required by the law or the CLC’s regulatory arrangements).
  3. You do not act for a Client where you judge it is not in their best interests for you to do so.
  4. You do not accept instructions from a person nor continue to act for a Client whose interests conflict directly with your own, the entity’s, or another Client.
  5. You disclose client information only as the Client has instructed (or as required by the CLC’s regulatory arrangements or by law), keeping effective records of any disclosures you make.
  6. You only recommend a particular person, business or product when it is in the best interests of the Client.
  7. You cease acting in a matter if the Client so instructs or, in the absence of such instructions where it is reasonable to do so.
  8. You provide the Client with information which is accurate, useful and appropriate to the particular Client.
  9. You only provide Regulated Services whilst you have CLC-approved professional indemnity insurance in force.
  10. You provide the Client with all relevant information relating to any fee arrangements or fee changes.
  11. You advise Clients of the name and status of the person dealing with their matter and the name of the person responsible for overall supervision.
  12. You consult Clients on key decisions in a timely way.
  13. You promptly advise Clients of any significant changes to projected costs, timelines and strategies.

Specific Requirements- you must also comply with the following specific requirements:

  1. Where the entity represents parties with different interests in any transaction each party is at all times represented by different Authorised Person(s)/Parties conducting themselves in the matter as though they were members of different entities.
  2. You ensure there are adequate indemnity arrangements in respect of claims made against you for work carried out by you before you have ceased to practice by purchasing professional indemnity insurance for a minimum of 6 years from the expiry of the period of professional indemnity insurance stated in your evidence of insurance or policy document.
  3. If you seek to exclude or limit liability, you do so only to the extent that such exclusion or limitation is above the minimum level of cover provided by CLC-approved professional indemnity insurance; you must obtain the written informed consent of the Client for such exclusion or limitation to be effective.
  4. When offering and providing services which are not regulated by the CLC, you advise your Client of this and inform them in writing that the activity is not covered by CLC-approved professional indemnity insurance or the CLC-administered Compensation Fund.
  5. Before or when accepting instructions, you inform Clients in writing of the terms on which the instructions are accepted, a complete, accurate estimate of fees and disbursements to be charged and if and when they are likely to change.
  6. You promptly inform the Client in writing of the existence and amount of any sum payable (whether directly or indirectly) as a result of receipt of that Client’s instructions.
  7. With the exception of disbursements, you do not delay completion because fees are outstanding to you.
  8. You discuss and agree with the Client how costs will be paid, whether directly by the Client, by public funding, through an insurance policy or otherwise.

Overriding Principle
4. Comply with your duty to the court

Note: this Principle will only be applicable if the CLC’s application to regulate advocacy and litigation services is successful

Outcomes – you must deliver the following Outcomes:

4.1 You act in the interests of justice;

4.2 You act in good faith towards Clients.

Principles – delivery of these Outcomes requires you to act in a principled way:

  1. You promote and protect the client’s best interests.
  2. You do not compromise your professional standards or independence.
  3. You assist the court in the administration of justice.
  4. You do not knowingly or recklessly mislead or deceive the court, or allow the court to be misled.
  5. You ensure that the Court is informed of all relevant decisions and legislative provisions (whether this has a favourable or unfavourable effect on the case you are advancing).
  6. You comply with any Court Order (unless an application for a stay is pending or the Order has been revoked by the Court).
  7. You advise your Client to comply with Court Orders and of the consequences of failing to do so.
  8. You properly protect sensitive evidence.
  9. You safeguard the well being of children and other vulnerable persons.

Specific Requirement – you must also comply with the following specific requirement:

  1. You ensure that the court is made aware of any relevant legal or factual matters which are likely to have a material effect on the outcome of the proceedings.

Overriding Principle
5. Deal with regulators and ombudsmen in an open and co-operative way.

Outcome – you must deliver the following Outcome:

5.1 You act in accordance with your regulatory responsibilities.

Principles – delivery of these Outcomes requires you to act in a principled way:

  1. You are open and honest in your dealings with us.
  2. You comply with the CLC Code of Conduct and the CLC’s other regulatory arrangements.
  3. You comply promptly and fully with a CLC direction or request.
  4. You comply with any authorisation, permission or condition endorsed on your licence, Recognised Body Certificate or Licensed Body Licence.
  5. You co-operate with any CLC investigation.
  6. You co-operate with any Legal Ombudsman investigation.
  7. You comply promptly and fully with any Legal Ombudsman Order.
  8. You co-operate with other regulators and ombudsmen.

Specific Requirements – you must also comply with the following specific requirements:

  1. You make the Compensation Fund contribution determined by the CLC.
  2. You systematically identify, monitor and manage risks to the delivery of this Code’s outcomes.
  3. You promptly notify insurers in writing of any facts or matters which may give rise to a claim under CLC-approved professional indemnity insurance.
  4. You promptly notify the CLC in writing of any facts or matters which may give rise to a claim under its Compensation Fund.
  5. As a CLC licensee operating in an entity regulated by another regulator you must comply with that regulator’s regulations at all times in a way which is reasonably consistent with this Code.
  6. You obtain permission from the CLC before offering Reserved legal activities:
  7. You notify the CLC of any material breach of this Code, whether by you, the entity or any other person.
  8. You notify the CLC of a change as set out in the CLC’s Notification Code.

Overriding Principle
6. Promote equality of access and service.

Outcomes – you must deliver the following Outcomes: –

6.1 The service is accessible and responsive to the needs of individual Clients, including those who are vulnerable;1

6.2 No-one – Client, employee, colleague, job applicant, trainee or other party – you deal with feels discriminated against (whether directly or indirectly), victimised or harassed;2

6.3 You accept responsibility where the service you provide is not of the expected standard and provide appropriate redress for the Client where necessary;

6.4 Handling of complaints takes proper account of Clients’ individual needs, including those who are vulnerable;

6.5 Complaints are dealt with impartially and comprehensively.

Principles – delivery of these Outcomes requires you to act in a principled way:

  1. You comply with Equalities legislation.
  2. You make reasonable adjustments to prevent persons with disabilities from being placed at a substantial disadvantage.
  3. You provide equal opportunities for all partners, employees or applicants in employment and training.
  4. You make all reasonable efforts to ensure your service is accessible and responsive to Clients, including those with vulnerabilities.
  5. The complaints procedure is clear, well-publicised and free.
  6. You treat complaints seriously and provide appropriate redress options.
  7. You deal with complaints fairly and within 28 days.
  8. You identify and address systemic Client Complaints issues.

Specific Requirements – you must also comply with the following specific requirements.

  1. Any allegation of (direct or indirect) discrimination, victimisation and harassment is investigated thoroughly, resulting, where appropriate, in disciplinary action.
  2. From the outset you advise Clients in writing of their right to make a complaint, how to make it, to whom, and the timeframes involved. You also make this information available in a prominent place on your website and by other reasonable means on request.
  3. You advise Clients in writing of their right to have their complaint escalated to the Legal Ombudsman and provide them with contact details and timeframes of that body. You also make this information available in a prominent place on your website and by other reasonable means on request.
  4. You keep a record of complaints received and any action taken as a result.

1 a Client may be vulnerable because of a range of characteristics, including (but not limited to): basic skills: literacy and numeracy; complexity and confusion: difficulty of accessing and understanding large amounts of information; disability or other impairment; mental health issues; distress or sudden change in circumstances e.g. bereavement, divorce, illness or loss of employment; low income; age; caring responsibilities; limited knowledge of, or limited skills in, use of English; balance of power: lack of competition and or choice; or inexperience or lack of knowledge of a particular subject. Vulnerability can only be assessed on a case-by-case basis.

2 On the grounds of age, disability, gender reassignment, marital and civil partnership status, pregnancy and maternity, race, religion or faith, sex or sexual orientation.

Anti-Money Laundering & Combating Terrorist Financing Code

This Code will be revised with effect from 1st January 2025. See the new version of this Code.

To view the printable PDF version, please click here.

In this Code ‘you’ refers to individuals and bodies regulated by the CLC; all individuals and bodies regulated by the CLC must comply with this Code. You must not permit anyone else to act or fail to act in such a way as to amount to a breach of this Code.
Outcomes-Focused
The Code of Conduct requires you to deliver the following Outcome:

Combating Money Laundering (AML) and Terrorist Financing (CTF) helps you deliver this Outcome and act in a principled way:
1.    Act with independence and integrity. (Overriding Principle 1)
2.    You comply with anti-money laundering and prevention of financing terrorism legislation. (CoC Overriding Principle 1m)
3.    You systematically identify and mitigate risks to the business and to Clients. (CoC Overriding Principle 2f)
4.    You promote ethical practice and compliance with regulatory requirements. (CoC Overriding Principle 2g)
5.    You maintain proper governance, management, supervision, financial and risk management arrangements and controls. (CoC Overriding Principle 2i)
You must also comply with the following specific requirements:
6.     You have appropriate management arrangements and systems and controls in place to comply with anti-money laundering regulations.
7.     You ensure that management arrangements, systems and controls enable   the identification, assessment, monitoring and management of AML/CTF risk and are appropriate to the nature, scale and complexity of your activities. Any system or product you use must be sufficiently robust to provide the necessary degree of certainty and incorporate qualitative checks that assess the strength of information supplied. It will include data from a range of sources and across time. Your evidence base must be composite and comprehensive.
8.    You carry out regular reviews of the adequacy of management arrangements, systems and controls.
9.      You ensure that, in order to meet your responsibilities under the AML/CTF Legislation your management arrangements, systems and controls include:-

(a) an appropriate AML/CTF policy;
(b) appropriate and regular training for  employees (of which a record must be kept) in relation to AML/CTF to enable  employees to recognise and deal with transactions and other activities which may be related to AML/CTF;
(c) appropriate internal reporting procedures;
(d) management and retention of records of CDD and information about, suspicion reports received  by the business;
(e) appropriate measures to ensure that AML/CTF is taken into account in the day to day operation, including the application of appropriate CDD for:-

(i) dealing with existing clients;
(ii) the taking on of new clients;
(iii) dealing with Beneficial Owners;
(iv) incorporating changes in the services  provided;

(f) appropriate CDD measures to ensure that procedures for identifying and verifying new clients and Beneficial Owners do not unreasonably deny access to the  services to potential clients who can not reasonably be expected to produce detailed evidence of identity.

10.      You :-

(a) appoint a Nominated Officer with responsibility to receive suspicion reports and make reports to the National Crime Agency (NCA);
(b) appoint a manager (who may or may not be the Nominated Officer) with responsibility for ensuring the business complies with this Code;
(c) ensure that the Nominated Officer or manager has an appropriate level of authority and independence , and access to resources and information sufficient to enable them to carry out that responsibility.

11.    You:

a)    establish the Client’s identity, obtaining proof of that identity to establish that a Client is who they say they are and that they live at the address given;
b)    obtain confirmation of instructions direct from the Client (and from all other interested parties) wherever possible, particularly where they communicate through an intermediary and

(i) obtain detailed instructions;
(ii) satisfy itself that the Client is not subject to duress or undue influence and
(iii) satisfy itself that the Client is entering into the transaction knowingly;

c)    be satisfied that the Client’s economic position, wealth and lifestyle correspond with the proposed transaction;
d)    check all signatures to reduce any risk of forgery of the signatures of other interested parties (e.g. a husband who forges his wife’s signature).

12.    Records are stored on Durable Medium.

Should you require information on how to meet your responsibilities under this Code, please see the CLC’s Anti-Money Laundering and Combating Terrorist Financing Guidance

Accounts Code

This Code will be revised with effect from 1st January 2025. See the new version of this Code.

To view the printable PDF version, please click here.

  1. General Provisions
    1. The requirements of the Accounts Code apply to all CLC Lawyer and practices who receive or deal with money belonging to a Client.
    2. Each Manager of a CLC Practice is jointly and severally responsible with any other Manager of that CLC Practice for compliance with the Accounts Code by the CLC Practice and its employees.
    3. Managers must maintain proper governance, management and supervision of the CLC Practice and ensure appropriate systems, procedures, processes and internal controls are in place to comply with the Accounts Code.
    4. To monitor compliance with the Accounts Code, the CLC may at any time request information which must be delivered at the time and place and in the format requested by the CLC.
    5. The CLC is entitled to seek verification of information from clients, staff, service providers and banks. If requested, the CLC Practice will provide written permission to facilitate the provision of this information.
    6. CLC Practice must comply with anti-money laundering and counter-terrorist financing legislation. 
  2. Client Account
    1. A Client Account is a current or deposit account in the name of the CLC Practice designated as a ‘Client Account’ at a Bank or Building Society located in England or Wales.
    2. A Client Account is used to hold Client Money, and must not be used as a banking facility for Clients.
    3. The Client Account and Office Account may only be used for the provision of services regulated by the CLC. Separate bank accounts and separate accounting records must be maintained for any other services which are not CLC-regulated. 
  3. Client Money
    1. Client Money is any money held or received on behalf of a Client by a CLC Practice incidental to the provision of legal services regulated by the CLC.
    2. Client Money must be paid into Client Account Without Delay.
    3. Client Money must always be immediately available to be applied in accordance with the Client’s instructions.
    4. Any shortfall on Client Account must be replaced Without Delay.
    5. The Client side of the Client ledger must not go into debit.
    6. The Office side of the Client ledger must not go into credit.
    7. The CLC Practice must pay money received into the Client Account if there is doubt whether it is wholly Office Money.
    8. Money incorrectly paid into a Client Account must on discovery be transferred out of the Client Account Without Delay.
    9. The CLC Practice must advise the CLC Without Delay of the discovery of any misappropriation of Client funds and must make good any shortfall from its Office Account Without Delay.
    10. Interest earned on Client Money must be credited to the respective Client ledger. The CLC Practice must obtain informed written consent from the Client if it wishes to depart from this requirement. 
  4. Withdrawals from Client Accounts
    1. The CLC Practice may only withdraw money from a Client Account if:
      1. it is to make a payment to or on behalf of the Client
      2. it is to pay an invoice for services provided by the CLC Practice which has been properly submitted to the Client
      3. it is to reimburse the CLC Practice for money paid out of the Office Account on behalf of the Client
      4. it has been paid into the Client account in error
      5. it is transferred to another Client Account
      6. it is in compliance with 4.4.
    2. Payments out of a Client Account must be approved by a duly authorised signatory to the Client Account and may only be made by:
      1. cheque
      2. electronic payment (BACS/CHAPS)
      3. written bank instruction.
    3. Money held in a Client Account must be paid to the Rightful Recipient as soon as there is no longer any proper reason to retain it.
    4. Client Money may be withdrawn from a Client Account under 4.1(f) where there has been no movement on the Client ledger for over 12 months and the CLC Practice has:
      1. established the identity of the Rightful Recipient
      2. taken appropriate steps to return the Client Money to the Rightful Recipient (which have been unsuccessful), and
      3. recorded the steps taken in accordance with requirement 4.4(a)-(b) and retained those records (together with all relevant documentation).
    5. Having satisfied requirements 4.4(a)-(c), the CLC Practice may pay any Aged Balance not exceeding £50 to a nominated charity, to the Office Account, or to the CLC.
    6. The CLC Practice remains liable to repay monies due to the Rightful Recipient unless they have been paid to the CLC, in which case the CLC is liable to pay monies due.
    7. Any withdrawal of an Aged Balance exceeding £50 must be authorised by and paid to the CLC. The CLC will repay the Client Money when demanded by the Rightful Recipient. 
  5. Accounting Records
    1. The CLC Practice must update their Accounting Records at regular intervals, but not exceeding 30 days from the respective calendar month end.
    2. Accounting Records must be drawn up in accordance with generally accepted accounting practices.
    3. Accounting Records must be compiled by an individual with the appropriate skill and experience.
    4. The accounting system must maintain accurate and chronological records of:
      1. Client Money and Office Money transactions, with sufficient narrative to explain their purpose
      2. the indebtedness of the CLC Practice to individual Clients
      3. each Client’s total indebtedness to the CLC Practice
      4. individual transactions on individual Client Account ledgers
      5. bills of costs which distinguish between costs, disbursements and VAT, and
      6. the balance on any Client or Office ledger account (current and historic).
    5. Bank reconciliation statements must be produced within seven (7) days of the respective calendar month end.
    6. The reconciliation statement must compare the bank balance, the cash book balance and include a listing of reconciling items. Client bank accounts must also be reconciled to the Client Account listing.
    7. Reconciling items need to be reviewed and cleared on a timely basis.
    8. If accounting or cashiering functions are outsourced, the CLC Practice must have immediate and unrestricted access to its Accounting Records. The CLC Practice must maintain oversight of accounting and cashiering functions and remains responsible for the Accounting Records.
    9. The CLC Practice must retain Accounting Records for no less than six (6) years. 
  6. Accountant’s report

      CLC Practice responsibilities

    1. The CLC Practice must procure the delivery by the Reporting Accountant to the CLC of an Accountant’s report if at any time during an Accounting Period the CLC Practice held or received Client Money.
    2. The Accountant’s report must be delivered by the Reporting Accountant to the CLC within 6 months of the end of the Accounting Period.
    3. The CLC Practice must immediately notify the CLC of any changes to the identity, address or any other relevant details of the Reporting Accountant.
    4. The CLC Practice must supply the Reporting Accountant with any and all records and explanations required to exercise their duties.
    5. The CLC Practice must apply to the CLC for consent to vary the Accounting Period.

      6. Reporting Accountant eligibility

    6. The Reporting Accountant must be a member of one of the following accounting bodies and must be in good standing at the time of signing the Accountant’s report:
      1. the Institute of Chartered Accountants in England and Wales
      2. the Institute of Chartered Accountants of Scotland
      3. the Institute of Chartered Accountants in Ireland, or
      4. the Association of Chartered Certified Accountants.
    7. A person may not be a Reporting Accountant if:
      1. the accountant has been found guilty by a professional body of professional misconduct or equivalent
      2. at any time between the beginning of the Accounting Period to which the Accountant’s report relates and the signing of the Accountant’s report, they were either a partner, employee or officer in the CLC Practice to which the Accountant’s report relates, or were employed by the same employer as the Authorised Person for whom the Accountant’s report is given, or
      3. the CLC has disqualified the accountant from completing, signing and delivering an Accountant’s report because it is satisfied that the accountant:
        1. has failed to exercise due care and skill in the preparation of an Accountant’s report, or
        2. has an actual or reasonably apparent Conflict of interest.

      8. Reporting Accountant responsibilities

    8. The Reporting Accountant must be engaged to:
      1. determine whether the Accounts Code has been complied with, by examining:
        1. internal controls, management oversight and supervision systems
        2. monthly Client Account reconciliations
        3. Client Account balances, transactions and shortfalls
      2. complete, sign and deliver the Accountant’s report in the form required by the CLC with any supporting schedules to the CLC with a copy to the CLC Practice
      3. report directly and immediately to the CLC without prior reference to the CLC Practice if in the course of the engagement evidence of theft or fraud affecting Client Money is discovered or there is a reasonable belief that Client Money may be at risk
      4. report directly to the CLC if their appointment is terminated after:
        1. the issue of, or indication of the intention to issue, a qualified Accountant’s report
        2. concerns are raised with the CLC Practice in the course of their retainer
      5. retain the terms of engagement for at least 2 years after delivery of the Accountant’s report, and to provide the CLC with a copy on request.
      6. on request, provide the CLC any further relevant information relating to the compilation of the Accountant’s report.
    9. By accepting the engagement the Reporting Accountant agrees that:
      1. the CLC will rely upon the content of the Accountant’s report
      2. a duty of care is owed by the Reporting Accountant to the CLC
      3. the Reporting Accountant's liability to the CLC will be limited to the loss and costs suffered by the CLC arising from items the Reporting Accountant has negligently or fraudulently failed to identify and specify in the Accountant’s report
      4. to the extent necessary to enable the Reporting Accountant to comply with the paragraphs 6.9(a)-(c), the CLC Practice waives its rights of confidentiality. The waiver extends to any report made, documents produced or information disclosed to the CLC in good faith and in accordance with these instructions, even though it may subsequently transpire that the Reporting Accountant was mistaken in his belief that there was cause for concern. 
  7. Third Party Managed Accounts (TPMAs)
    1. Only a CLC Practice approved by the CLC may enter into arrangements with a Client to use a named TPMA provider.
    2. Any application to the CLC to use a named TPMA provider must include such information and documentation as the CLC requires.
    3. Use of a TPMA must not result in the CLC Practice receiving or holding Client funds.
    4. The CLC Practice must take reasonable steps to ensure that the Client has been informed of and understands:
      1. the terms of the contractual arrangements relating to the use of the TPMA, and
      2. the Client’s right to terminate the agreement and dispute payment requests made by the CLC Practice.

Should you require information on how to meet your responsibilities under this Code, please see the CLC’s Accounts Guidance.

Complaints Code

This Code will be revised with effect from 1st January 2025. See the new version of this Code.

To view the printable PFD copy, click here .

In this Code ‘you’ refers to individuals and bodies regulated by the CLC; all individuals and bodies regulated by the CLC must comply with this Code. You must not permit anyone else to act or fail to act in such a way as to amount to a breach of this Code.

Outcomes-Focused

The Code of Conduct requires you to deliver the follow Outcomes:

Effective handling of complaints helps you deliver these Outcomes and requires you to act in a principled way:

  1. Maintain high standards of work. (Overriding Principle 2)
  2.  Promote equality of access and service. (Overriding Principle 6)
  3.  You make all reasonable efforts to ensure your service is accessible and responsive to Clients, including those with vulnerabilities. (CoC P6d)
  4.  The complaints procedure is clear, well-publicised and free. (CoC P6e)
  5.  You treat complaints seriously and provide appropriate redress options. (CoC P6f)
  6. You deal with complaints fairly and within 28 days. (CoC P6g)
  7. You identify and address systemic Client complaints issues. (CoC P6h)
  8. You operate a procedure which is appropriate to the needs of clients and which allows complaints to be made by any reasonable means.
  9. You deal with complaints constructively and impartially, basing decisions upon a sufficient investigation of the circumstances.
  10. Where redress offers are accepted, these are actioned within 28 days.
  11. You treat fairly members of staff who are the subject of a complaint.

You must also comply with the following specific requirements:

  1. From the outset you advise Clients in a prominent place on your website and in writing of their right to make a complaint, how to make it, to whom, and the timeframes involved. (CoC P6j)
  2. You advise Clients in a prominent place on your website andin writing of their right to have their complaint escalated to the Legal Ombudsman, and provide them with contact details and timeframes of that body.  (CoC P6k)

14.      You keep a record of complaints received and any action taken as a result. (CoC P6k)

15.      Complaints are investigated under the supervision of one of your senior managers/members.

16.      You respond in writing to complaints within 7 days. Where a full response cannot be given in this timeframe, you acknowledge receipt of the complaint, give the reason for the delay and commit to responding fully within 28 days of receipt of their initial complaint.

17.      The response includes:

18.      Should your procedure make provision for review of how a complaint was handled,  the review must be carried out in a timely manner and not inconvenience the complainant.

Should you require information about how to meet your responsibilities under this Code, please see the CLC’s Complaints Guidance 

Conflicts of Interest Code

This Code will be revised with effect from 1st January 2025. See the new version of this Code.

To view the printable PDF version, please click here.

In this Code ‘you’ refers to individuals and bodies regulated by the CLC; all individuals and bodies regulated by the CLC must comply with this Code. You must not permit anyone else to act or fail to act in such a way as to amount to a breach of this Code.

Outcomes-Focused
The Code of Conduct requires you to deliver the following Outcomes:

The prevention, detection and mitigation of conflicts of interests help you deliver these Outcomes and act in a principled way:

  1.  Act with Independence and Integrity. (Overriding Principle 1)
  2.  Act in the best interests of your Clients. (Overriding Principle 3)
  3. You keep the interests of the Client paramount (except as required by the law or the CLC’s regulatory arrangements). (CoC P3b)
  4.  You do not act for a Client where you judge it is not in their best interest for you to do so. (CoC 3c)
  5.  You do not accept instructions from a person nor continue to act for a Client whose interests conflict directly with your own, the entity’s, or another Client. (CoC P3d)

You must also comply with the following specific requirements:

  1.  Where the entity represents parties with different interests in any transaction each party is at all times represented by different Authorised Person(s)/Parties conducting themselves in the matter as though they were members of different entities. (CoC P3n)
  2.  Before or when accepting instructions to act for a second Client you inform each Client in writing that the body has been asked to act for another Client in the same matter and you explain the relevant issues and risks to them.
  3.  You only act for both Clients if each Client has provided informed written consent that you may act for another Client in the matter.
  4.  You do not act, or do not continue to act, for a Client where your ability to give independent advice is in any way restricted.  This may arise if:
    1. you owe separate duties to act in the best interests of two or more clients in relation to the same or related matters, and those duties conflict, or there is a significant risk that those duties may conflict;  or
    2. your duty to act in the best interests of any client in relation to a matter conflicts, or there is a significant risk that it may conflict, with your own interests in relation to that or a related matter.
  5.  If a conflict arises which was or should have been foreseen, you do not charge either Client a fee for the work undertaken (other than for disbursements properly incurred).
  6.  As an exception to requirement 6, and provided no Conflict of interest arises, if you are a body with only one Authorised Person(s)/Parties you may act for more than one Client where one of the Clients is a lender providing mortgages in the normal course of its business activities.

Should you require information on how to meet your responsibilities under this Code, please see the CLC’s Conflicts of Interest Guidance.

Continuing Professional Development Code

To view the printable PDF version, please click here.

In this Code ‘you’ refers to individuals and bodies regulated by the CLC; all individuals and bodies regulated by the CLC must comply with this Code. You must not permit anyone else to act or fail to act in such a way as to amount to a breach of this Code.
Outcomes-Focused
The Code of Conduct requires you to deliver the following Outcomes:

Keeping your legal knowledge up-to-date and relevant helps you deliver these Outcomes and requires you to act in a principled way:

  1.  Maintain High Standards of Work. (Overriding Principle 2)
  2.  Act in the Best Interests of your Clients. (Overriding Principle 3)
  3.  You keep your skills and knowledge up-to-date. (CoC P2b)
  4.  You ensure all individuals within the entity are competent to do their work. (CoC P2c)
  5.  You promote ethical practice and compliance with regulatory requirements. (CoC P2g)
  6.  You only accept instructions and act in relation to matters which are within your professional competence. (CoC P3a)
  7.  You provide equal opportunities for all partners, employees or applicants in employment and training. (CoC P6c)

You must also comply with the following specific requirements:

  1.  In each year in which you hold a licence you complete Continuing Professional Development in such courses, lectures, seminars or other programmes or other activities approved by the CLC.
  2.  You are able to demonstrate that the subject matter of the course or activity is relevant to your professional development or area of practice and to help you deliver positive Outcomes to your Clients.
  3.  Each year you inform the CLC – in such form as the CLC may from time to time prescribe – whether or not you have complied with the CLC’s requirements for continuing professional development as they apply to you.
  4.  You keep an up-to-date training record. You provide the CLC with this record upon its request.
  5.  You attend, and pay to attend, a specific course that the CLC has directed you to attend (as an alternative to disciplinary action).

Dealing with Non-Authorised Persons Code

This Code will be revised with effect from 1st January 2025. See the new version of this Code.

To view the printable PDF version, please click here.

In this Code ‘you’ refers to individuals and bodies regulated by the CLC; all individuals and bodies regulated by the CLC must comply with this Code. You must not permit anyone else to act or fail to act in such a way as to amount to a breach of this Code. In the context of this Code the Non-Authorised Person refers to the party on the other side of a transaction.

Outcomes-Focused
The Code of Conduct requires you to deliver the following Outcomes:

Demonstrating probity in your dealings with Non-Authorised Person third parties helps you deliver these Outcomes and act in a principled way:

  1.  Maintain High Standards of Work. (Overriding Principle 2)
  2.  Act in the Best Interests of your Clients. (Overriding Principle 3)
  3.  You do not conduct yourself in a manner which may result in a breach of the law nor in any other manner which may bring the legal profession into disrepute. (CoC P1c)
  4.  You do not take unfair advantage of any person, whether or not a Client of the business. (CoC P1l)
  5.  You promote ethical practice and compliance with regulatory requirements. (CoC P2g)
  6.  You keep the interests of the Client paramount (except as required by the law or the CLC’s regulatory arrangements). (CoC P3b)

You must also comply with the following specific requirements:

  1.  You do not have dealings with any Non-Authorised Person carrying on reserved legal activities including conveyancing (unless there is clear evidence that person is an exempt person (see schedule 3 2007 Act).
  2.  You report to the CLC (without submitting your transaction file) where a Non-Authorised Person is carrying on reserved legal activities, including conveyancing, which appears to be or to have been a breach of s.14-16 2007 Act.

Dealing with Non-Authorised Persons

  1.  You :-
    1. avoid extending your duty of care to persons who are not Clients by seeking to ensure that, to your knowledge, you do not provide legal advice (in the circumstances provided by Hedley Byrne v Heller [1964] AC 465) on which they may seek to rely;
    2. not accept any undertaking which a non-Authorised Third Person may offer in the course of a transaction;
    3. incorporate special provisions into the draft contract to take account of the problems which arise because the other party has no Authorised Person(s)/Parties acting (see below);
    4. ensure that any power of attorney is valid, properly granted and effective for all relevant purposes;
    5. advise the client in writing that you are dealing with a Non-Authorised Person Party and explain all the steps which are being taken to protect the client’s position.

Acting for the Lender

  1.  You do not give the unqualified agent additional assistance in a way which might establish a Authorised Person/client relationship either with the Non-Authorised Person or with the borrower, or leave you open to a negligence claim either from your lender client or from the borrower.
  2.  You comply with s. 69 Law of Property Act 1925, by allowing mortgage advances to be paid only to those properly entitled to receive them.
  3.  You ensure that on completion, any payments are sent to a named bank or building society account held by you, an Authorised Person(s)/Parties, licensed body or their clients, and not to some intermediate party.

Should you require information on how to meet your responsibilities under this Code, please see the CLC’s Dealing with Non-Authorised Persons (third parties) Code & Guidance.

Disclosure of Profits and Advantage Code

This Code will be revised with effect from 1st January 2025. See the new version of this Code.

To view the printable PDF, please click here.

In this Code ‘you’ refers to individuals and bodies regulated by the CLC; all individuals and bodies regulated by the CLC must comply with this Code. You must not permit anyone else to act or fail to act in such a way as to amount to a breach of this Code.

Outcomes-Focused
The Code of Conduct requires you to deliver the following Outcomes:

Transparent referral arrangements help you deliver these Outcomes and act in a principled way:

  1.  Act with independence and integrity. (Overriding Principle 1)
  2.  Maintain high standards of work. (Overriding Principle 2)
  3.  Act in the best interests of Clients. (Overriding Principle 3)
  4.  You do not allow your independence to be compromised. (CoC P1a)
  5.  You act honestly, professionally and decently. (CoC P1b)
  6.  You do not conduct yourself in a manner which may result in a breach of the law nor in any other manner which may bring the legal profession into disrepute. (CoC P1c)
  7.  You promote ethical practice and compliance with regulatory requirements. (CoC P2g)
  8.  You keep the interests of the Client paramount (except as required by the law or the CLC’s regulatory arrangements). (CoC P3b)
  9.  You only recommend a particular person, business or product when it is in the best interests of the Client. (CoC P3f)
  10.  You provide the Client with all relevant information relating to any fee arrangements or fee changes. (CoC P3j)
  11.  Where the entity represents parties with different interests in any transaction each party is at all times represented by different Authorised Person(s)/Parties conducting themselves in the matter as though they were members of different entities. (CoC P3n)
  12.  Where you enter into an arrangement, including any fee sharing agreement, with an introducer, the agreement is in writing.
  13.  You periodically review referral arrangements/fees to deliver the Outcomes identified at the outset of this Code.
  14. You inform the Client in writing of the existence of the referral arrangement no later than when accepting instructions, or when introducing a Client to another person.
  15.  You advise the Client that they have a choice of provider.
  16.  You inform the Client of the nature of the arrangement (including any payment made), with whom it is made, and any impact (including any legal costs they are charged).

Equality Code

This Code will be revised with effect from 1st January 2025. See the new version of this Code.

To view the printable PDF, please click here.

In this Code ‘you’ refers to individuals and bodies regulated by the CLC; all individuals and bodies regulated by the CLC must comply with this Code. You must not permit anyone else to act or fail to act in such a way as to amount to a breach of this Code.

Outcomes-Focused
The Code of Conduct requires you to deliver the following Outcomes:

Accessible employment and business arrangements help you deliver these Outcomes and requires you to act in a principled way:

  1.  Promote Equality of Access & Service. (Principle 6)
  2.  You comply with relevant Equalities legislation. (CoC P6a)
  3.  You make reasonable adjustments to prevent persons with disabilities from being placed at disadvantage. (CoC P6b)
  4.  You provide equal opportunities for all partners, employees or applicants in employment and training. (CoC P6c)
  5.  You make all reasonable efforts to ensure your service is accessible and responsive to Clients, including those with vulnerabilities. (CoC P6d)

You must also comply with the following specific requirement:

  1.  Any allegation of (direct or indirect) discrimination, victimisation and harassment is investigated thoroughly, resulting, where appropriate in disciplinary action. (CoC P6i)

1 a Client may be vulnerable because of a range of characteristics, including (but not limited to): basic skills: literacy and numeracy; complexity and confusion; difficulty of accessing and understanding large amounts of information; disability or other impairment; mental health issues; distress or sudden change in circumstances e.g. bereavement, divorce, illness or loss of employment; low income; age; caring responsibilities; limited knowledge of, or limited skills in, use of English; balance of power; lack of competition and choice; or inexperience or lack of knowledge of a particular subject. Vulnerability can only be assessed on a case-by-case basis.
2 On the grounds of age, disability, gender reassignment, marital and civil partnership status, pregnancy and maternity, race, religion or faith, sex or sexual orientation.

Should you require information on how to meet your responsibilities under this Code, please see the CLC’s Equality Guidance.

Estimates and Terms of Engagement Code

This Code will be revised with effect from 1st January 2025. See the new version of this Code.

To view the printable PDF version, please click here.

In this Code ‘you’ refers to individuals and bodies regulated by the CLC; all individuals and bodies regulated by the CLC must comply with this Code. You must not permit anyone else to act or fail to act in such a way as to amount to a breach of this Code.

Outcomes-Focused
The Code of Conduct requires you to deliver the following Outcomes:

Providing timely Estimates and Terms of Engagement which are easy to understand helps you deliver these Outcomes and to act in a principled way:

  1.  Act with independence and integrity. (Overriding Principle 1)
  2.  Maintain high standards of work. (Overriding Principle 2)
  3.  Act in the best interests of your Clients. (Overriding Principle 3
  4.  You act honestly, professionally and decently. (CoC P1b)
  5. You do not give false or misleading information relating to the provision of Regulated Services. (CoC P1e)
  6. You promptly advise Clients of any significant changes to projected costs, timelines and strategies. (CoC P3m)
  7.  Where the entity represents parties with different interests in any transaction each party is at all times represented by different Authorised Person(s)/Parties conducting themselves in the matter as though they were members of different entities. (CoC P3n)

You must also comply with the following specific requirements:

Estimates 

  1.  Any estimate of costs is stored on a Durable Medium and states:-
    8.1     the name of the Client, and the nature of the transaction;
    8.2     the basis on which fees for abortive work will be payable;
    8.3     the proposed fees and other expenses (such as bank transfer fees) payable to you (such fees and other expenses are deemed to be inclusive of VAT unless VAT is separately itemised);
    8.4     a description of, and cost of, any disbursement likely be incurred on the basis of the instructions received (such disbursements are deemed to be inclusive of VAT unless VAT is separately itemised). Where applicable, Land Tax should be separately itemised;
    8.5     where the total sum payable as estimated under paragraph 8.3 is likely to be exceeded that the Body will advise the Client of that fact and provide an explanation and a revised estimate;
    8.6     in respect of paragraphs 8.3 and 8.4:
    8.6.1     unless otherwise stated fees will be deemed to be inclusive of the costs of post, telephone calls, facsimile communications and email;
    8.6.2     unless separately specified, the estimate of proposed fees payable to the body will be deemed to include fees for:-

    8.6.3     the Client is advised where it is not possible to provide an estimate of fees and disbursements because the relevant information is not available.

  2.  If it becomes apparent that the total sum payable as estimated under paragraph 8 is likely to be exceeded or that the relevant information has become available, as soon as practicable you:-
    9.1     advise the Client; and
    9.2     provide the Client with a written explanation on a Durable Medium.
  3.  Any fees, expenses, disbursements and VAT to be charged in respect of an abortive transaction are notified to the Client on a Durable Medium as soon as those matters can reasonably be calculated whether or not an invoice is delivered at this time.

Terms of Engagement

  1.  You provide Clients with Terms of Engagement with a request that the Client confirms their agreement to the terms.
  2.  The Terms of Engagement summarise the nature of instructions and with sufficient clarity so as to be readily understandable to the Client.
  3.  The Terms of Engagement include:-
    13.1     your name, address, telephone and other contact details;
    13.2     if not included in paragraph 13.1, the name of one of your Managers;
    13.3     the name, experience and, if applicable, qualifications of the individual having day-to-day conduct of the matter and where applicable the name of the individual responsible for its overall supervision;
    13.4     if the matter is to be conducted by a team, the identity of that team and the name of its leader(s);
    13.5     a clear description of the services included int he cost, including:

    1. the key stages of the transactions
    2. indicative timescales for the transaction
    3. a summary of services included in the cost, and
    4. a summary of services which are not included in the cost.

    13.6 the name of the individual to whom any complaint should be made;
    13.7     an explanation of the procedure to be adopted where the Client is dissatisfied with the services or conduct of any of your Managers or employees.  This information must also include the Client’s right to complain to the Legal Ombudsman at the conclusion of the complaint process, the time limits for doing so and full details about how to contact the Legal Ombudsman (see Complaints Code).
    13.8     the following wording:-
    ‘’If you make a valid claim against us for a loss arising out of work for which we are legally responsible, and we are unable to meet our liability in full, you may be entitled to claim from the Compensation Fund administered by the Council for Licensed Conveyancers (from whom details can be obtained”).
    13.9     Information about the staff mix, their experience and qualifications and the information contained in paragraphs 13.5-13.8 must also be made available in a prominent place on your website and by other reasonable means on request.
    13.10 You keep a copy of, and any evidence that the Client has agreed, the estimate and Terms of Engagement on a Durable Medium.

Should you require information on how to meet your responsibilities under this Code, please see the CLC’s Estimates and Terms of Engagement Guidance

Management and Supervision Arrangements Code

This Code will be revised with effect from 1st January 2025. See the new version of this Code.

To view the printable PDF version, please click here.

In this Code ‘you’ refers to individuals and bodies regulated by the CLC; all individuals and bodies regulated by the CLC must comply with this Code. You must not permit anyone else to act or fail to act in such a way as to amount to a breach of this Code.

Outcomes-Focused
The Code of Conduct requires you to deliver the following Outcomes:

Appropriate management and supervision arrangements help you deliver these Outcomes and require you to act in a principled way:

  1. Maintain high standards of work. (Overriding Principle 2)
  2.  You ensure all individuals within the entity are competent to do their work. (CoC P2c)
  3.  You supervise and regularly check the quality of work in Client matters. (CoC P2d)
  4.  You systematically identify and mitigate risks to the business and to Clients. (CoC P2f)
  5.  You promote ethical practice and compliance with regulatory requirements. (CoC P2g)
  6.  You enable staff to raise concerns which are acted on appropriately. (CoC P2h)
  7.  You maintain proper governance, management, supervision, financial and risk management arrangements and controls. (CoC P2i)
  8.  You maintain proper records to evidence your arrangements and how they are applied. (CoC P2o)
    You must also comply with the following specific requirements:
  9.  A Manager who is an Authorised Person(s)/Parties is responsible for ensuring that all of the entity’s employees are properly supervised. (CoC P2m)
  10. You make provision for alternative supervision arrangements in case of illness, accident or other unforeseen event. (CoC P2n)
  11.  You systematically identify, monitor and manage risks to the delivery of this Code’s [the Code of Conduct] Outcomes.  (CoC P5j)

Should you require information on how to meet your responsibilities under this Code, please see the CLC’s Management and Supervision Arrangements Guidance.

Notification Code

This Code will be revised with effect from 1st January 2025. See the new version of this Code.

To view the printable PDF version, please click here.

In this Code ‘you’ refers to individuals and bodies regulated by the CLC; all individuals and bodies regulated by the CLC must comply with this Code. You must not permit anyone else to act or fail to act in such a way as to amount to a breach of this Code.

Outcomes-Focused

The Code of Conduct requires you to deliver the following Outcome:

Making sure both you and the CLC are aware of any notifiable changes helps you identify any potential threats to the delivery of all Code of Conduct Outcomes as well as helping you deliver the Outcome above. This requires you to act in a principled way:

  1. Deal with regulators and ombudsmen in an open and co-operative way. (Overriding Principle 5)
  2.  You notify the CLC of any material breach of this Code [Code of Conduct], whether by you, the entity or any other person. (CoC P5o)
  3.  You notify the CLC of a change as set out in the CLC’s Notification Code. (CoC P5p)
  4.  You have systems and controls to enable you to identify any notifiable changes.

These responsibilities require you to notify us of any of the following changes:

  1.  To the extent it is reasonable to do so, you notify us no less than 14 days before a proposed change of business or registered office address, but in any event within 14 days of any change occurring.
  2.  You notify us within 14 days of any change in manager and/or management  arrangements .
  3.  You notify us within 14 days of a change in structural arrangements.
  4.  In respect of the body you notify us within 7 days if:
    • a winding-up order or administration order is passed
    • a resolution for voluntary winding-up is passed, or
    • an administration receiver is appointed.

CLCLawyer

  1.  You notify us promptly if you:-

Recognised Bodies

  1.  You notify us promptly after you have received information where any of the provisions identified in requirement 9 apply to a Manager of the body.
  2. You notify us promptly of a change in ownership[1] of the body.
  3.  You notify us promptly after you have received information that a person employed or paid by the Recognised Body to provided reserved legal activities:
    • has been charged, cautioned or convicted of a criminal offence, or if there is a case pending
    • has been the subject of any disciplinary proceedings by a professional or regulatory body
    • has been the subject of an adverse order or finding of a civil court or employment tribunal
    • has been disqualified as a director
    • has been declared bankrupt or has entered an Individual Voluntary  arrangement
    • has been disqualified from acting in any capacity for a legal services, financial or other provider
    • is the subject of any other information which could reasonably be expected to have a bearing on whether that person is fit and proper.

Licensed Bodies (ABS)

  1.  To the extent it is reasonable to do so, you notify us no less than 14 days before a proposed change in the person occupying the role of HoLP or HoFA, but in any event within 7 days of any change occurring.
  2.  You notify us promptly after you have received information about any ‘fit and proper’ issue concerning the owner(s), the HoLP, HoFA, other Managers or Authorised Person(s)/Parties:
  3.  You notify us promptly if you employ a person disqualified by a Licensing Authority.
  4.  You notify us promptly if a Non-Authorised Person proposing to hold a material interest of 10% or more, or the holder of a material interest proposing to acquire an additional kind of interest, fails to give notification of such intended change after having been made aware of their duty to notify.

Notification Guidance

  1.  Provision of adverse information under this Code does not necessarily mean we will withdraw our approval of the relevant individual. Where adverse information is provided it will be discussed with the body to determine the risk posed to the Code of Conduct’s Outcomes; resource implications for the CLC; and the individual/body’s willingness or capacity to address the issue.
  2. Examples of what is meant by ‘any other information that could reasonably be expected to have a bearing on their being fit and proper’ under requirement 14 include:
  3. An example of what is meant by ‘structural arrangements’ under requirement 7 is a body no longer registered as a Limited Liability Partnership or a Company under the relevant Acts.
  4.  Persons disqualified by Licensing Authorities are identified on the Legal Services Board website.

[1] As per item 33 of the Recognised Body Recognition Framework

33 of the Recognised Body Recognition Framework

Should you require information on how to meet your responsibilities under this Code, please see the CLC’s Notification Guidance.

Professional Indemnity Insurance Code

This Code will be revised with effect from 1st January 2025. See the new version of this Code.

To view the printable PDF version, please click here.

In this Code ‘you’ refers to individuals and bodies regulated by the CLC; all individuals and bodies regulated by the CLC must comply with this Code. You must not permit anyone else to act or fail to act in such a way as to amount to a breach of this Code.

Outcomes-Focused The Code of Conduct requires you to deliver the following Outcomes:

Providing clients with access to appropriate redress helps you deliver these Outcomes and requires you to act in a principled way:

  1.  Act in the best interests of your Clients. (Overriding Principle 3)
  2.  Deal with regulators and ombudsmen in an open and co-operative way. (Overriding Principle 5)
  3. You only accept instructions and act in relation to matters which are within your professional competence. (CoC P3a)
  4. You only provide Regulated Services whilst you have CLC-approved professional indemnity insurance in force. (CoC P3i)
  5. You ensure there are adequate indemnity arrangements in respect of claims made against you for work carried out by you before you ceased to practice by taking out professional indemnity insurance for a minimum period of 6 years from the expiry of the period of professional indemnity insurance stated in your evidence of insurance or policy document. (CoC P3o)
  6. If you seek to exclude or limit liability, you do so only to the extent that such exclusion or limitation is above the minimum level of cover afforded by CLC-approved professional indemnity insurance; you must obtain the written informed consent of the Client for such exclusion or limitation to be effective. (CoC P3p)

You must also comply with the following specific requirements:

  1. When providing services which are not regulated by the CLC, you advise your Client of this and inform them in writing that the activity is not covered by CLC-approved professional indemnity insurance or the CLC-administered Compensation Fund. (CoC P3q)
  2. You promptly notify insurers in writing of any facts or matters which may give rise to a claim under CLC-approved professional indemnity insurance. (CoC P5k)

Professional Indemnity Insurance

  1. When providing CLC–regulated services you must have professional indemnity insurance in place at all times, which complies with the minimum requirements of Article 10(4) IDD and the CLC’s PII Policy Wording.
  2. You must:
    10.1 Pay the applicable annual premium for professional indemnity insurance;
    10.2 Comply with the professional indemnity insurance terms as apply to you;
    10.3 Comply with the Self Insured Excess policy (set out at 13) and such other policies as the CLC may issue;
    10.4 Produce a current Evidence of Insurance when requested by the CLC;
    10.5 Permit the Participating Insurers or the Brokers to notify the CLC should any circumstances arise whereby the Participating Insurers or the Brokers consider that the body has failed to comply with their responsibilities as a CLC body or when any Evidence of Insurance is avoided.

European Union (EU) Bodies – if you are a European Lawyer

  1. If on application:
    11.1 you satisfy the CLC that the EU body (of which you are a Manager) has EU Professional Cover which complies with the CLC’s PII Policy Wording in all its conditions and cover then the EU body will be exempted from obligation to comply with requirement 10.1 whilst the EU Professional Cover (and any agreement with the cover provider) remains in force and is complied with;
    11.2 you satisfy the CLC that the EU body (of which you are a Manager) has Partial EU Professional Cover then the EU body and its Managers shall be exempted from the obligation to comply with regulation 10.1 whilst the Partial EU Professional Cover (and any agreement with the cover provider) and a Supplemental Policy remain in force and is complied with.

Claims

  1. In the event of a professional indemnity insurance claim you produce any information the CLC deems appropriate within five working days of the CLC’s information request.

Self Insured Excess

13.

  1. 1     Should your self-insured Excess exceed:
    1. £3,500 or
    2. the sum of the following:
      1. 5% Fees (as defined in the CLC’s PII Policy Wording) where the Fees are no more than £200,000; plus
      2. 3% Fees on Fees between £200,001 and £500,000; plus
      3. 2% Fees on Fees between £500,001 and £1,000,000;

    you report this to the CLC. The CLC will need to be satisfied that the body will avoid additional exposure of the CLC’s Compensation Fund to unpaid excesses.

  2. 2 If you are satisfied that the body you manage has the ability to meet additional liability over and above this you may make a specific application to the CLC to increase the self-insured Excess where Fees are greater than £1,000,000.
  3. 3 Your application outlines how the body intends to meet the obligation to avoid additional exposure of the CLC’s Compensation Fund to unpaid excesses.

——————————-

Professional Indemnity Insurance Guidance

  1. A Licence will not be issued to a Manager unless the applicable Evidence of Insurance for your Body has been produced to the CLC.
  2. As a guide to the provisions under requirement 13 a body should be able to demonstrate it can fund the self insured excess for no less than two claims per year.Examples of Limits on Self Insured Excess:
    • Fees £250,000 Maximum Excess = £200,000 X 5% + £50,000 X 3% = £11,500
    • Fees £600,000 Maximum Excess = £200,000 X 5% + £300,000 X 3% + £100,000 X 2% = £21,000
    • Fees £900,000 Maximum Excess = £200,000 X 5% + £300,000 X 3% + £400,000 X 2% = £27,000
  3. We would remind you of your responsibility under the Provision Of Services Regulations 2009 to make the following ‘available’: contact details for the Professional Indemnity Insurance provider, and the geographic coverage of that PII. It is at your discretion as to how make this available e.g. given in writing to the client at the outset, hard copy at the firm’s offices, on website, or in documents provided to the client during a transaction etc.’

Transaction Files Code

This Code will be revised with effect from 1st January 2025. See the new version of this Code.

To view the printable PDF version, please click here.

In this Code ‘you’ refers to individuals and bodies regulated by the CLC; all individuals and bodies regulated by the CLC must comply with this Code. You must not permit anyone else to act or fail to act in such a way as to amount to a breach of this Code.

Outcomes-Focused
The Code of Conduct requires you to deliver the following Outcomes:

Appropriate standards of document provision help you deliver these Outcomes and require you to act in a principled way:

  1.     Act in the best interests of your Clients. (Overriding Principle 3)
  2.     You disclose client information only as the Client has instructed (or as required by the CLC’s regulatory arrangements or by law), keeping effective records of any disclosure you make. (CoC OP3e)

You must also comply with the following specific requirements:

File

  1.     When a request for a transaction file, or part of it, is made on behalf of a Client, lender or third party you must determine the ownership of the various papers in the file and provide the person making the request only with the documents they own or are entitled to, or entitled to only with the Client’s permission.
  2.     Where the Client’s permission is required you must not provide the papers to the person making the request until you have obtained the Client’s consent or been served with a court order in appropriate terms.

Joint retainers – joint Clients

  1.     Originals are handed to one Client only with the consent of the other Client.
  2.     You provide each Client with a copy without charge.
  3.     You release copies to third parties only with the consent of all Clients.

Joint retainers –Client and lender

  1.     You may charge a lender for a copy of a document if you require the borrower Client’s consent to provide the lender with a copy.

Retention of file contents

  1.     You retain the contents of files relating to all matters for a minimum of six years, except those relating to:
  2.     Consideration should be given on a case by case basis as to the appropriate date of destructions for the contents of files relating to:
    •     deeds of gift
    •     gifts of land
    •     transfers at an undervalue
    •     right to buy where funds came from someone other than the purchasing tenant(s)
    •     lifetime gifts.

Should you require information on how to meet your responsibilities under this Code, please see the CLC’s Transactions File Guidance.

Undertakings Code

This Code will be revised with effect from 1st January 2025. See the new version of this Code.

To view the printable PDF version, please click here.

In this Code ‘you’ refers to individuals and bodies regulated by the CLC; all individuals and bodies regulated by the CLC must comply with this Code. You must not permit anyone else to act or fail to act in such a way as to amount to a breach of this Code.

Outcomes-Focused 
The Code of Conduct requires you to deliver the following Outcome:

Transparency and probity in undertakings helps you deliver these Outcomes and requires you to act in a principled way:

  1.  Maintain high standards of work. (Overriding Principle 2)
  2.  You comply fully with any undertaking given by you. (CoC P2e)
  3. You only accept instructions and act in relation to matters which are within your professional competence. (CoC P3a)
  4. You keep the interests of the Client paramount (except as required by the law or the CLC’s regulatory arrangements). (CoC P3b)

You must also comply with the following specific requirements:

  1.  You deliver services in accordance with timetables reasonably agreed with the Client. (CoC P2k)
  2.  You consult Clients on key decisions in a timely way. (CoC P3l)
  3.  You promptly advise Clients of any significant changes to projected costs, timelines and strategies. (CoC P3m)
  4.  All Managers are equally responsible for the performance of undertakings given in a body’s name and remain responsible for their performance even after they have left the body or it has been dissolved.
  5.  You do not breach an undertaking. Only the person entitled to the benefit of the undertaking or the Court may release you/the body from an undertaking.
  6.  You do not avoid liability on an undertaking by asserting that to comply with it would be a breach of duty owed to the Client.
  7.  Where you have given an undertaking to redeem a mortgage or charge you   redeem it immediately following completion of the transaction occasioning the redemption.
  8.  In an undertaking to pay money out of the proceeds of sale of a property it is not implied that the undertaking is intended to take effect only if you receive the proceeds of sale.

Should you require information on how to meet your responsibilities under this Code, please see the CLC’s Undertakings Guidance.

Handbook – Regulatory Arrangements Specific

Overview

The CLC’s regulatory regime is underpinned by the Handbook which sets out the regulatory responsibilities of all individuals and firms regulated by us.

Acting as Ancillary Insurance Intermediaries Code

This Code will be revised with effect from 1st January 2025. See the new version of this Code.

To view the printable PDF version, please click here.

Introduction

The CLC is a Designated Professional Body under Part XX of FSMA and as such it must make arrangements to regulate CLC Bodies in the provision of Regulated Activities in relation to which the General Prohibition does not apply as a result of section 327 FSMA.
Acting as Insurance Intermediaries Code
In this Code ‘you’ refers to bodies regulated by the CLC; all bodies regulated by the CLC which act as insurance intermediaries must comply with this Code. You must not permit anyone else to act or fail to act in such a way as to amount to a breach of this Code. These requirements do not apply to a person authorised by the Financial Conduct Authority in accordance with s.31 FSMA.

Outcomes-Focused
The Code of Conduct requires you to deliver the following Outcomes:

Demonstrating integrity and providing appropriate standards of work when acting as an Insurance Intermediary helps you deliver these Outcomes and requires you to act in a principled way:

  1.  Act with independence and integrity. (Overriding Principle 1)
  2. Maintain high standards of work. (Overriding Principle 2)
  3. Act in the best interests of your Clients. (Overriding Principle 3)
  4. Promote equality of access and service. (Overriding Principle 6)
  5.  You act honestly, professionally and decently. (CoC P1b)
  6.  You do not give false or misleading information relating to the provision of Regulated Services. (CoC P1e)
  7.  You keep the interests of the Client paramount (except as required by the law or by the CLC’s Regulatory Arrangements). (CoC P3b)
  8.  You only recommend a particular person, business or product when it is in the best interests of the Client. (CoC P3f)
  9.  You provide the Client with information which is accurate, useful and appropriate to the particular Client. (CoC 3h)
  10.  You provide the Client with all relevant information relating to any fee arrangements or fee changes. (CoC P3j)
  11.  You advise Clients of the name and status of the person dealing with their matter and the name of the person responsible for overall supervision. (CoC P3k)
  12.  When providing services which are not regulated by the CLC, you advise your Client of this and inform them in writing that the activity is not covered by CLC-approved professional indemnity insurance or the CLC-administered Compensation Fund. (CoC P3q)
  13.  You co-operate with other regulators and ombudsmen. (CoC P5h)

You must also comply with the following specific requirements:

  1. The following activities shall not be considered to constitute insurance distribution or reinsurance distribution:

    14.1 the provision of information on an incidental basis in the context of another professional activity where:

    14.1.1 the provider does not take any additional steps to assist in concluding or performing an insurance contract;
    14.1.2 the purpose of that activity is not to assist the customer in concluding or performing a reinsurance contract;

    14.2 the management of claims of an insurance undertaking or of a reinsurance undertaking on a professional basis, and loss adjusting and expert appraisal of claims;
    14.3 the mere provision of data and information on potential policyholders to insurance intermediaries, reinsurance intermediaries, insurance undertakings or reinsurance undertakings where the provider does not take any additional steps to assist in the conclusion of an insurance or reinsurance contract;
    14.4 the mere provision of information about insurance or reinsurance products, an insurance intermediary, a reinsurance intermediary, an insurance undertaking or a reinsurance undertaking to potential policyholders where the provider does not take any additional steps to assist in the conclusion of an insurance or reinsurance contract.

  2.  Subject to Requirement 18 and provided it complies with this Code you are only permitted to act as an Ancillary Insurance Intermediary providing Regulated Activities as specified by the CLC by resolution and which are complementary to Regulated Services provided to a Client.
  3. You are not permitted:
    16.1 to manufacture contracts of insurance,
    16.2 to take up or pursue the activity of Reinsurance Distribution,
    16.3 to distribute Insurance-based Investment Products,
    16.4 to carry out distribution activities in relation to Large Risks Insurance,
    16.5 to offer an ancillary product or service which is not insurance (with the exception of the substantive Regulated Services), as part of a package or the same agreement, when you offer an insurance product.
  4. To effectively oversee Regulated Activities you appoint a Manager as the person who:-
    17.1 is responsible for ensuring the body has procedures and practices to enable it to comply with this Code;
    17.2 will supply to the CLC or its agents information as required by the CLC; and
    17.3 will notify the CLC immediately and in any event no later than seven days after each such appointment is made.
  5. Any Manager or employee providing Regulated Activities must be of good repute, and
    18.1 must as a minimum have a clean criminal record (see further article 10(3) IDD), and
    18.2 must not have previously been declared bankrupt, unless they have been rehabilitated in accordance with national law.
  6.  You advise the CLC if there is an order or direction of the Financial Conduct Authority under sections 328 or 329 FSMA in force in respect of the body. Where such order is in force the CLC may withdraw permission without notice.
  7.  The manner of the provision of any service in the course of Carrying on a Regulated Activity is incidental to the provision by you of Professional Services.
  8.  The Regulated Activities you carry on are not of a description, or relate to an investment of a description, specified in an order made by HM Treasury under section 327(6) FSMA.
  9.  The Regulated Activities are the only Regulated Activities carried on by the body (other than Regulated Activities in relation to which it is an FSMA Exempt Person).
  10.  You do not carry on, nor hold the body out as Carrying on, a Regulated Service other than one which is permitted by this Code or one in relation to which it is a FSMA Exempt Person.
  11.  You do not carry on any Insurance Distribution Activity unless the body is included in the Insurance Intermediaries Register.
  12.  The body and all of its Managers at all times comply with FSMA, secondary legislation made under FSMA and the IMD, so far as they apply to them.
  13.  The body and all of its Managers comply with the terms and provisions of the CLC’s Acting as an Insurance Intermediary Code.

Acting as Ancillary Insurance Intermediaries
Insurance Intermediaries Register

  1.  You only act as an ancillary insurance intermediary if you are registered on the Financial Conduct Authority’s (FCA) Insurance Intermediaries Register. The CLC is responsible for supplying details of bodies to the FCA.
  2.  Unless trading as a Sole Practitioner, you nominate one of your Managers to be listed on the Register as the main contact, with all correspondence relating to Insurance Distribution Activities is addressed to that individual.
  3.  You check that the body is listed on the Insurance Intermediaries Register before conducting any activity covered by paragraph 4 of the Guidance.
  4. You inform us within 5 working days of any changes being made to your entry in the FCA’s register.

Notifications provided to clients

  1.  You provide two types of notification as permitted at Requirements 34, 35, 36 and 37:
    1. at the outset of instructions (and in any event before the contract of insurance is concluded);
    2. before a contract of insurance is concluded
      Notes:

      1.  Some of the provisions are unlikely to vary from one matter to another and can be provided in standard terms.
      2.  A clear statement of the basis on which a particular product has been chosen must be made.
      3.  The CLC understands there are relatively few providers of Title Indemnity Policies. It is unlikely therefore that any advice on products can be given on the basis of a fair analysis. It is much more likely they will be made from a limited number of insurance undertakings or a single insurance undertaking.
    3. In the case of telephone selling, the information you give to the Client prior to the conclusion of the contract, including the insurance product information document (see Requirement 39.6.5), shall be provided in accordance with the Distance Marketing Regulations. Even if the Client has chosen to obtain prior information on a Durable Medium other than paper in accordance with Requirement 35, you provide information to the Client in accordance with Requirement 33, 34 or 35 immediately after the conclusion of the insurance contract.

Passporting

  1.  If you wish to establish an IDD Branch or provide Insurance Distribution Activities in another EEA State you complete the FSMA passporting process (FSMA, paragraph 21, part III, schedule 3).
  2.  You do not provide Insurance Distribution Activities in another EEA state unless you have given the FCA the necessary notice of the body’s intention to do so.

Terms & Information Provision
Providing Regulated Activities (including acting as an Insurance Intermediary)

  1. All information under Requirements 38 and 39:
    34.1 must be clear and accessible, on paper and provided free of charge
    34.2 must be provided in a way which is fair, clear and not misleading, no less prominent than any other information provided to the Client at the same time and in English or in any other language agreed by the you and the Client
    34.3 insurance distribution marketing communications must be clearly identifiable as such.
  2. Information may be provided by Durable Medium other than paper (such as by email):
    35.1 where it is appropriate in the context of the business conducted between you and the Client, and
    35.2 the Client has been given the choice between information on paper and on a Durable Medium, and has chosen information on a Durable Medium.
  3. Information may be provided by means of a website if it is addressed personally to the customer or if the following conditions are met:
    36.1 the provision of that information by means of a website is appropriate in the context of the business conducted between the insurance distributor and the customer;
    36.2 the customer has consented to the provision of that information by means of a website;
    36.3 the customer has been notified electronically of the address of the website, and the place on the website where that information can be accessed;
    36.4 it is ensured that that information remains accessible on the website for such period of time as the customer may reasonably need to consult it.
  4. For the purposes of Requirements 35 and 36, the provision of information using a Durable Medium other than paper or by means of a website shall be regarded as appropriate in the context of the business conducted between you and the Client if there is evidence that the Client has regular access to the internet. The provision by the Client of an e-mail address for the purposes of that business shall be regarded as such evidence.
  5. In good time before providing Regulated Activities, you provide the following information as permitted at Requirements 34, 35, 36 and 37 to the Client:-
    38.1 your name, address, telephone, other contact details and that you are an ancillary insurance intermediary;
    38.2  if not included in Requirement 38.1, the names of the Managers;
    38.3   the name of the individual having day-to-day conduct of the matter and where applicable the name of the individual responsible for its overall supervision;
    38.4  if the matter is to be conducted by a team, the identity of that team and the name of its leader(s);
    38.5 the name of the individual to whom any complaint should be made;
    38.6   an explanation of the procedure to be adopted where the Client is dissatisfied with the services received or conduct delivered; this must include the name and address of the CLC and the Legal Ombudsman (see further information provided in the CLC’s complaints Code and Guidance).
    38.7  the following wording:-
    ‘’If you make a valid claim against us for a loss arising out of work for which we are legally responsible, and we are unable to meet our liability in full, you may be entitled to claim from the Compensation Fund administered by the Council for Licensed Conveyancers (from whom details can be obtained”).
    38.8 the following wording:-
    “[this firm is/we are] not authorised by the Financial Conduct Authority.
    However, we are included in the register maintained by the Financial Conduct
    Authority so that we can carry on Insurance Distribution Activities, which is broadly advising on, selling and administration of insurance contracts. This part of our business is regulated by the Council for Licensed Conveyancers, and arrangements for complaint or redress if something goes wrong are subject to the jurisdiction of the Legal Ombudsman (www.legallombudsman.org.uk),. The register can be accessed via the Financial Conduct Authority website at https://register.fca.org.uk”.
  6. Where you are proposing or advising on a contract of insurance then in good time before concluding any contract of insurance, or the renewal or the amendment of a contract of insurance, you must be satisfied that the Client has been provided with at least the following information, if such information has not already been provided, as permitted at Requirements 34, 5, 36 and 37:
    39.1 whether the Body is an ancillary insurance intermediary, an insurance intermediary or an insurance undertaking
    39.2 whether the Body is representing the Client or is acting for and on behalf of the insurer
    39.3whether you are providing a personal recommendation about the insurance products offered
    39.4 that the Client may buy the contract of insurance separately
    39.5 where an insurance product is ancillary to a good or a service which is not insurance, as part of a package or the same agreement, you will offer the Client the possibility of buying the good or service separately
    39.6 based on the information obtained from the Client,

    39.6.1 the demands and needs of the Client in relation to the insurance products that form part of the overall package or the same agreement
    39.6.2 objective information about the insurance product, and
    39.6.3 a personalised recommendation explaining why a particular product would best meet the Client’s demands and needs, in each case modulated according to the complexity of the contract of insurance proposed and the type of Client and be in a comprehensible form to allow the Client to make an informed decision;
    39.6.4 the reasons for giving Advice on the contract where such Advice is given to the Client;
    39.6.5 the insurance product information document meeting the requirements of Article 20(5) to Article 20(8) of the IDD and Commission Implementing Regulation (EU) 2017/1469.
  7. Where information referred to in Requirements 38 and/or 39 is provided using a Durable Medium other than paper or by means off a website, a paper copy shall be provided to the Client upon request and free of charge.
  8. Any contract proposed must be consistent with the Client’s demands and needs.

Accounting to the Client

  1. In good time before the conclusion of the initial contract of insurance and if necessary on its amendment or renewal you must notify the Client as permitted at Requirement 34 of any Remuneration you anticipate arising out of providing Insurance Distribution Activities for that Client.
  2. You account to the Client for any Remuneration received by you from a person other than your Client arising out of you providing Insurance Distribution Activities (s.327(3) FSMA).
  3. You must not be remunerated, and you must not remunerate or assess the performance of your employees, in a way that conflicts with their duty to act in accordance with the best interests of your Client. In particular, you shall not make any arrangement by way of remuneration, sales targets or otherwise that could provide an incentive to you or to your employees to recommend a particular insurance product to your Client when you could offer a different insurance product which would better meet the Client’s needs.

Specific Knowledge Requirements

  1. All staff providing Insurance Distribution Activities must possess appropriate knowledge and ability to perform their duties.

Other

  1.  Where appropriate you refer and, if appropriate, take legal advice on the effect of IDD, FSMA, secondary legislation, and the Guidance.
  2. This Code does not prevent the distribution of insurance products which provide coverage for various types of risks (multi-risk insurance policies).
  3. Where you advise on, or propose, insurance products which you do not manufacture, you shall have in place adequate arrangements:
    48.1 to obtain all appropriate information on the insurance product and the product approval process, including the identified target market of the insurance product, and
    48.2 to understand the characteristics and identified target market of each insurance product.

Acting for Lenders and Prevention and Detection of Mortgage Fraud Code

This Code will be revised with effect from 1st January 2025. See the new version of this Code.

To view the printable PDF version, please click here.

In this Code ‘you’ refers to individuals and bodies regulated by the CLC; all individuals and bodies providing conveyancing services regulated by the CLC must comply with this Code. You must not permit anyone else to act or fail to act in such a way as to amount to a breach of this Code.

Outcomes-Focused

The Code of Conduct requires you to deliver the following Outcomes:

Prevention and detection of mortgage fraud and acting properly in the interests of lenders helps you deliver these Outcomes and requires you to act in a principled way:

  1. Act with Independence and Integrity. (Overriding Principle 1)
  2. Maintain High Standards of Work. (Overriding Principle 2)
  3. Act in the best interests of your Clients. (Overriding Principle 3)
  4. You systematically identify and mitigate risks to the business and to Clients. (CoC P2f)
  5. You promote ethical practice and compliance with regulatory requirements. (CoC P2g)
  6. You enable staff to raise concerns which are acted on appropriately. (CoC P2h)
  7. You maintain proper governance, management, supervision, financial and risk management arrangements and controls. (CoC P2i)
  8. You keep the interests of the Client paramount (except as required by the law or the CLC’s regulatory arrangements). (CoC P3b)
  9. You disclose client information only as you have been instructed (or as required by the CLC’s regulatory arrangementsor by law), keeping effective records of any disclosures you make. (CoC P3e)

You must also comply with the following specific requirements:

Part A – Acting for Lenders

  1. When acting for a Lender, you take all necessary steps to ensure that the conveyancing services provided by it do not fall below the reasonably competent standard which should be expected.
  2. You take all relevant steps to comply with the general and particular mortgage instructions contained in the current edition of Parts 1 & 2 of the Lenders’ Handbook for England & Wales issued by the Council of Mortgage Lenders (“the CML Handbook”).
  3. If you suspect a client of not being completely honest or transparent about any element of a proposed mortgage transaction, you must consider whether you should continue to act for the Lender and/or the Client.
  4. You do not disclose confidential information to the Lender after you have ceased to act for a Client.

Identity of the Client

  1. You establish and obtain proof of the identity of Clients in line with the requirements of the CML Handbook and the Anti-Money Laundering Legislation and Combating the Financing of Terrorism Legislation. You must advise the Lender if a Borrower Client is unable, reluctant or unwilling to provide this verification.
  2. Any system or product you use must be sufficiently robust to provide the necessary degree of certainty and include data from a range of sources, across time and incorporate qualitative checks that assess the strength of the information supplied. Your evidence base and level of verification must be composite and comprehensive.

Identity of the Property

  1. You are certain you have correctly identified the property which is to be mortgaged and that the documents of title with which you have been presented accurately relate to and reflect that property, particularly where its name or its boundaries or other significant features have been changed.

Transactions

  1. In registered title property transactions, you obtain Official Copies of the title and a copy of the Official Plan produced by the Land Registry.
  2. You do not complete a mortgage transaction without first obtaining the results of Land Registry, Land Charges or Company Searches, as appropriate.
  3. You carry out a Bankruptcy Search (which must be current at completion) in the registered names of and any other names used by a Borrower or by which he is otherwise known.
    19.1        Where an entry is revealed against the name of the Borrower (or the mortgagor or guarantor) you must certify that the entry does not relate to the Borrower (or the mortgagor or guarantor) if you are able to do so from your own knowledge or enquiries; or if, after obtaining office copy entries or making other enquiries of the Official Receiver, you are unable to certify that the entry does not relate to the borrower (or the mortgagor or guarantor) you make a report to the Lender.
    19.2        You obtain clear bankruptcy searches against all parties to any deed of gift or transaction at an apparent undervalue (paragraph 5.15.4 CML Handbook).
  4. You complete a mortgage for a registered title and the application for registration at the Land Registry lodged before the end of the priority period provided by the Land Registry Search. Any search application to create a fresh priority must be made in sufficient time before the expiry of the existing priority period to enable a substantive application to be lodged within the appropriate period if another “hostile” application is revealed.
  5. You complete a mortgage over an unregistered title within the priority period provided by the Land Charges Searches. You register your application with the Land Registry within 2 months of the date of completion.
  6. Where the Borrower is a Company you register the charge at Companies House within 21 days (a period which may only be extended by order of the Court).
  7. When acting for a Seller or Buyer, Official Copies and Official Plan you must check no additional charges have been registered.
  8. When acting for a Seller, you check the Title Entries on receipt from the Land Registry (and before issue to the Buyer’s conveyancer) to ensure that any additional charges are noted and addressed at the outset. This will avoid causing problems in discharging undertakings.

Mortgage Redemption

  1. To ensure compliance with the CLC’s Undertakings Code and with Clause 17 of Part 1 of the CML Handbook, you:-
    25.1        ask a client at the outset of any sale or remortgage transaction whether there are any mortgages secured against the property and, if so, obtain details (including relevant mortgage account numbers);
    25.2        specifically ask those clients whether, in addition to the principal mortgage account, they have any other loans with different account numbers with the same Lender (which may be secured against the property) or any other mortgages with any other Lenders and, if so, obtain details (including relevant mortgage account numbers);
    25.3        request an illustrative redemption statement from the Lender at the outset of the transaction giving details of mortgage account numbers, and verify the outstanding amount(s) shown on those statements with your clients;
    25.4        when obtaining either an illustrative or a final redemption figure from a Lender, request a statement of the total amount required to redeem all loans and monies secured by the Lender’s charge over the property. Failure to ask for details of all loans and monies secured by the Lender may mean that the redemption figure will only relate to those accounts where details have been provided;
    25.5 ensure any discharge undertaking given specifies both the identity of the lender and the date of each charge it is intended to discharge in reply to any requisitions on title or otherwise.

Mortgage Instructions

  1. You:-
    26.1        check the Lender’s mortgage offer and instructions carefully and ensure that that they match the details of the transaction exactly or otherwise report any discrepancies to the Lender, having first obtained instructions from his Borrower client so to do or, if the client refuses to consent, to cease acting for the Lender;
    26.2        question and clarify any unusual or uncertain instructions before proceeding;
    26.3        cease to act for the Lender if his interests or the interests of anyone working within your body or the interests of the Borrower come into conflict with those of the Lender; and
    26.4        comply with Part B – the Mortgage Fraud Code.

Part B – Mortgage Fraud

  1. You immediately cease to act for a client in any circumstances where you are aware or suspect that the client is attempting to perpetrate fraud. If you decide to terminate the retainer, you must observe Principle 3 g) of the Code of Conduct unless to do so would constitute a “tipping off” offence under the Proceeds of Crime Act 2002 or the Terrorism Act 2000.
  2. You maintain your duty of confidentiality to your client after ceasing to act for that client except where:
  3. In acting in the best interests of the Lender you may be required to pass on or report information to the Lender. Where the Borrower client declines consent to its disclosure, a Conflict of interest will arise between the duty of confidentiality to the Borrower client and the duty to act in the best interests of the Lender. You must therefore cease to act for the Lender (and consider carefully whether you can continue to act for the Buyer).

Identity of the Client and Client‘s Circumstances

  1. You:-
    30.1        establish the client’s identity in line with the CLC’s Anti-Money Laundering Code and the current Money Laundering Regulations,  obtaining proof of that identity to establish that a client is who he says he is and that he lives at the address given;
    30.2        advise the Lender if, in any case, a client is unable, reluctant or unwilling to provide this verification;
    30.3        identify all the other owners of the property and other persons who might have an interest in or rights over the property (if any) and ensure that the client‘s current co-owner/partner is, where applicable, the co-owner/partner referred to on the title of the property;
    30.4        obtain confirmation of instructions direct from the client (and from all other interested parties) wherever possible, particularly where he or they communicate through an intermediary and

    1. obtain detailed instructions;
    2. satisfy itself that the client is not subject to duress or undue influence and
    3. satisfy itself that the client is entering into the transaction knowingly

    30.5        be satisfied that the client‘s economic position, wealth and lifestyle correspond with the mortgage that he is proposing to enter into and there are no facts which suggest the potential for mortgage fraud (e.g. that he has not overstated his income in the mortgage application or that he does not have substantial arrears on an existing mortgage account); and

    30.6        check all signatures to reduce any risk of forgery of the signatures of other interested parties (e.g. a husband who forges his wife’s signature).

Linked Transactions

  1. Having obtained the client’s instructions to do so, you notify the Lender of any sub-sale or back-to-back element in any transaction and ensure you have the Lender’s written consent before proceeding. If the client refuses to consent to that disclosure, you cease acting for the client and the Lender.

Identity of the other lawyers

  1. You check the identity of the  CLC Lawyer(s) or Solicitors acting for the other party by reference to the CLC or the Records Department of the Law Society of England & Wales respectively.

Proceeds of Sale

  1. You pay particular attention to instructions given for the distribution of the net proceeds of a sale or remortgage:
    33.1        If the property or the mortgage is held in joint names, the net proceeds of sale must be sent to an account in the joint names of all clients or a cheque must be written to all parties jointly
    33.2        The net proceeds are sent to all the parties except as otherwise instructed by all the parties in writing.

Variations in Price, Incentives and other Material Considerations

  1. When acting for a Buyer and a Lender, you, with the client‘s consent, notify a Lender immediately where:-
    34.1        there is an alteration to the purchase price or the details are different from the details set out in the mortgage offer (other than as permitted by the Lender).
    34.2        you become aware of any other information which you would reasonably expect the Lender to consider important in deciding whether, or on what terms, it would make the mortgage advance available to the Buyer.
  2. You do not complete the mortgage until the Lender has confirmed that it is happy to proceed and, if applicable, the terms upon which it is willing so to do.
  3. You establish and maintain proper systems, procedures, processes and internal controls for approval of Certificates of Title prior to submission to the Lender.
  4. You remain mindful of your duty to act in the best interests of the Lender as your client.

General

  1. You do not witness any signature unless the person signing does so in your presence. You ensure that any signed document which has been witnessed other than by a conveyancer has been properly signed in the presence of a witness.
  2. You verify the signatures of clients (and any other interested parties) on all documents connected with a transaction.

Warning Signs

  1. You question the probity of unusual instructions and are particularly circumspect if any one or more of the circumstances set out in the “Summary of Warning Signs” Guidelines apply to a transaction where you are acting

Acting for Lenders Guidance

Checking Identity by Documentary Means

  1. The identity of a Borrower can be verified by checking their identity against appropriate original documents provided to you which appear to be authentic, are current and, where applicable, have been signed in the relevant place. A document or a series of documents meeting the expectations contained in Clause 3.1.6 of Part 1 of the CML Handbook is likely to satisfy the Lender’s requirements.
  2. Care must always be taken to ensure that the extent of the evidence seen will also meet responsibilities for client identity verification under the Regulations and the expectations contained in the CLC’s Anti-Money Laundering and Combating Terrorist Financing Code.
  3. Clause 3.2 of Part 1 of the CML Handbook prescribes requirements for safeguards and identity checks.

Checking Identity by Electronic Means

  1. You must obtain “satisfactory evidence of identity”, which must be reasonably capable of establishing (and does in fact establish to the satisfaction of the person who obtains it) that the potential client is the person he claims to be. The CLC considers verification of identity by appropriate electronic means to be acceptable, though urges caution. Electronic evidence obtained should provide you with a strong level of certainty that any individual is the person they claim to be and that a person of that name lives at the address given using the client‘s full name, address and date of birth as its basis.
  2. Any system or product used must be sufficiently robust to provide the necessary degree of certainty. Data accessed from a single source (e.g. the Electoral Roll) will not normally be sufficient on its own. Some databases will offer a higher degree of confidence than others.
  3. Before using a commercial agency for electronic verification, you must be satisfied that:-
    6.1          the information supplied by the data provider is considered to be sufficiently extensive, reliable and accurate; and
    6.2          the agency has processes which allow its users to capture and store the information that they have used to verify an identity.
  4. The process should be cumulative and you may consider it appropriate to seek additional evidence (e.g. a copy of a document bearing a signature and a date of birth) in all cases or, at least, where any client poses a higher risk of identity fraud, money laundering or terrorist financing, or where the result of any electronic verification check gives rise to concern or uncertainty over the client’s identity.
  5. You may wish to consider whether the provider meets each of the following criteria, namely that it:-
    8.1          is recognised to store personal data through registration with the Information Commissioner’s Office;
    8.2          uses a range of positive information sources that can be called upon to link an applicant to both current and previous circumstances;
    8.3          accesses negative information sources such as databases relating to identity fraud and deceased persons;
    8.4          accesses a wide range of alert data sources; and
    8.5          has transparent processes that enable you to know what checks were carried out, what the results of these checks were and what they mean in terms of how much certainty they give as to the identity of the subject of the identity enquiry.
  6. Data from more robust sources where inclusion is based on proof of identity (such as government departments) ought to be included (under paragraph 8.2). Negative information checks (under paragraph 8.3) minimise the risk of impersonation fraud.
  7. It is also important for:-

    10.1        the process of electronic verification to meet a standard level of confirmation before it can be relied on. In circumstances which do not give rise to concern or uncertainty, the standard level would be expected to be:

    1. one match on an individual’s full name and current address and
    2. a second match on an individual’s full name and either his current address or his date of birth.If the result of a standard verification check gives rise to concern or uncertainty over the client‘s identity, the number of matches required to provide reasonable satisfaction as to his identity should increase.
    3. You should ensure you understand the basis of the system you use in order to be satisfied that the sources of the underlying data reflect the CLC’s requirements and cumulatively meet the standard level of confirmation set out above as commercial agencies use various methods of displaying results (e.g. by the number of documents checked or through scoring mechanisms, etc).

Transactional Considerations

    1. 1     For a registered title, the date from which the Land Registry search should be made is the date of issue of the Official Copies supplied or obtained at the outset of the transaction and the search should be made in the registered name of the Lender (and not its trading name) to avoid any conflict of priorities.
    2. 2     For unregistered land, searches must be made against all names and any variations on those names on the title documentation and, where an address has changed, a search should be made against any former address and/or counties.
    3. 3     For unregistered land, an Index Map Search must always be undertaken to ensure that the extent of the land to be conveyed is consistent with the title documentation and the Borrower’s understanding.
  1. In unregistered title property transactions, it is good practice both when acting for a Seller or a Buyer to make a Land Charges Search at the outset of the transaction to ascertain any entries details of which have not been supplied by the clients or are not revealed in the Abstract or Epitome of Title.

Mortgage Fraud Guidance

  1. Mortgage fraud may be perpetrated by one or more participants in a mortgage loan transaction, including the Borrower, or by multiple parties (a mortgage fraud ring) working dishonestly together (and often in a professional capacity).
  2. Mortgage fraud is a criminal offence which can often result in imprisonment on conviction. Some conveyancers have been caught up unwittingly in a mortgage fraud, not because of any wilfully fraudulent acts on their part but because they have failed to act in accordance with this Code, neglecting to check all details of the transaction and failing where appropriate to report to the Lender for whom they are also acting. They have not appreciated that the circumstances of the transaction might lead to or give rise to fraud.
  3. Proceeds of mortgage fraud are criminal property. A conveyancer who assists in such a fraud will facilitate the acquisition, retention, use or control of criminal property contrary to s.328 of the Proceeds of Crime Act 2002. He may also aid and abet a fraud or be complicit in a conspiracy to defraud.
  4. Mortgage fraud is likely to require a report to be made to the National Crime Agency.
  5. Any attempt to deceive a Lender may expose you to civil action (e.g. breach of contract, breach of trust or negligence) and/or to disciplinary proceedings.

Linked Parties

  1. You should always exercise caution if:-
    6.1          there appear to be links between a Buyer and Seller; or
    6.2          you are acting for both parties; or
    6.3          the Seller is a private company or the Seller has recently purchased from a private company and the names and addresses of the officers and shareholders of the company appear to be connected with the transaction, the Seller or Buyer.

Concerns of variations

  1. It is in your interests to check whether:-
    7.1          the contract papers have incomplete or missing dates, incorrect descriptions or any sections (particularly the price) which have been left blank;
    7.2          the price shown in the Contract and Transfer documentation differs from the amount actually being paid for the property;
    7.3          any fixtures and fittings included in the purchase price materially reduce the value of the property;
    7.4          the Seller is offering the Buyer any incentive(s) to buy the property unless these clearly fall within a Part 2 CML Handbook dispensation given by the Lender concerned;
    7.5          any allowances are made or any other sum is being set-off against the money payable by the Buyer to the Seller (e.g. for repairs to the property):
    7.6          the Buyer proposes to pay or has apparently paid a deposit direct to the Seller (except for a nominal reservation fee); or
    7.7          there is anything else that affects the price of the property or the amount actually being paid for the property, however small.
  2. It is not advisable for you to determine whether any change is material. With your client’s consent, you should make a report to the Lender. It is good practice to advise clients at an early stage that
    1. it would be regarded as fraud to misrepresent the purchase price or the existence of any incentives and inducements; and
    2. you have a duty to inform a Lender of the true or underlying price actually being paid for a property.
  3. It is good practice to include a term in the Terms of Engagement permitting the disclosure to Lenders of material facts relating to the property and the Borrower client.

Acting in the best interests of the Lender client

  1. In the event of the circumstances detailed in paragraph 7 your safest course of action may be to cease to act for both the Lender and the Borrower client.
  2. Where you cease to act for the Lender in such circumstances, you should return the mortgage instructions to the Lender merely stating that they are returned because of a Conflict of interests (without giving any further explanation).

Valuations

  1. It is good practice to check any valuation supplied by the Lender to check it is not:
    12.1        higher than the actual price being paid for the property or higher than might be expected for a property of that type in the location in which it is situated; or
    12.2        considerably higher than the price paid for the property on any earlier sale or disposal within the last 12 months, taking into account any subsequent inflation or deflation in property prices since the date of that sale or disposal.
  2. You are not a valuation expert and cannot be expected to advise on the accuracy of a valuation. Nevertheless, a valuation which is patently out of line with the apparent value of a property may be a ground for a suspicion of fraud, particularly where there is a possibility or risk of complicity between prospective Borrowers and Valuers.

Verifications of Signatures

  1. This can be done by examination and comparison with signatures on any other available documentation.

Fraud schemes

    1. 1     Mortgage Fraud can take the form of fraud for property or profit (or both). It can be opportunistic e.g. parties misrepresenting their income or not declaring other debt obligations; or perpetrated by mortgage fraud rings e.g. organised crime syndicates overvaluing properties, ‘professionals’ not acting professionally, provision of fake IDs, fake firms, flipping, inflated, or low, property valuations, illegitimate source of funds etc. Criminal methodologies are continually evolving but fraud activities have previously included:
      1. criminals posing as the buyer’s new lawyer obtain the mortgage advance instead of the real buyer
      2.   usage of at least one ‘professional’ party to appear to verify the transaction’s legitimacy and reassure other professionals within it
      3.   fraud rings acquiring machinery which produces fake – yet undetectable as such – driving licences for ID purposes, creating fictitious nominated purchasers
      4.   fictitious property or vacant land or non-developed property (particularly targeting property clubs)
      5.   selling property, at inflated values, between related private companies
      6.    back-to-back sales where the first mortgage is not registered against the property (and not redeemed upon second sale completion)
      7.   Equity Release Schemes where the client sells the property to a fictitious person or mortgage mule, who takes out an inflated value mortgage and on which it makes no payments (or where the person is vulnerable and does not understand the scheme’s conditions and implications)
      8.    purchasing via auction a repossessed property and (usually within a year) seeking external funding against the property, or posing as a property developer seeking bridging loans
      9.     identifying deceased estates through local papers’ notices sections, establishing identity as either the deceased person or a long-lost heir and seeking a mortgage over the existing equity; and
      10.    applying for a County Court Judgement against the owner of a repossessed/ unoccupied property concerning a non-existent debt.

    Examples of linked parties and sub-sales schemes:

    1. 2      Sale at an inflated price to an individual by a company or other entity controlled or owned by her/him may be a device designed to raise additional finance for the company or other entity and be linked to larger-scale frauds involving tax, improvement grants, etc. Sale by a Borrower to an associate at an inflated price (known as roll-over fraud) can then enable the associate to obtain a higher mortgage. No repayments are made under the mortgage and before the Lender is able to repossess the property, it is sold to another associate for a higher price, and so on.
    2. 3      A Buyer at one price instructs his conveyancer that he will be selling on to a third party at a higher price where the Sub-Buyer is either one and the same person as the Buyer or an associated person where the Seller may or may not also be a party to the fraud. The Sub-Buyer third party obtains a mortgage based on the sub-sale price and secures an immediate profit. The balance between the original sale price and the higher sub-sale price is never paid or is said to be paid by the Buyer to the Sub-buyer or is allegedly set-off by the Buyer against money owed to him by the Sub-Buyer. These transactions often feature a simultaneous exchange of contracts followed by a quick completion, leaving the Lender left with a property worth the original sale-price as security for a much higher loan. A derivative of this fraud occurs where a Seller grants a lease to a Buyer at a ground rent and the Buyer then assigns the lease to a Sub-Buyer at a premium to provide the Sub-Buyer with a legal interest over which he can then obtain a mortgage.

Summary of Possible Warning Signs

  1. The following are factors to be taken into consideration within conveyancing transactions. Where any of these factors are found the transaction should be approached with caution. That is not to say that in all circumstances listed below that mortgage fraud is likely, or is happening, but there may be increased risk to the Code of Conduct’s Outcomes.
    16.1 Mortgage/property type
    1. Buy-to-let schemes (large-scale fraud can take the form of large-scale renovation projects, new-build apartment complexes, and on occasion commercial properties)
    2. Sub-prime, self-certified, or 100% mortgages
    3. Where a Stamp Duty Mitigation Scheme is being used
    4. Seller or developer have provided incentives, allowances or discounts (especially if these were previously undisclosed)
    5. A lender which is not a mainstream bank, building society or similar institution
    6. Unencumbered property
    7. The property and mortgage do not seem consistent with your knowledge of the client’s financial position and income sources
    8. Cases referred from investment clubs or sale and rent-back companies
    9. The property has a history of being re-sold, or mortgages settled, quickly

16.2 Transaction type

  1. The property has a County Court Judgement against it
  2. Acting for both the borrower and the seller especially if involving corporate structures
  3. You are asked to complete the transaction and transfer the title in accordance with already exchanged contracts
  4. Finance is sought after the property has been registered in the buyer’s name
  5. You are offered continued work at a higher margin to encourage less diligent checks*
  6. Following a court order, the land is transferred but no application for a mortgage is made until some time later
  7. There has been a recent transfer of land but no money has changed hands
  8. Variance in signatures
  9. Instructions to purchase in or transfer a property into the name or names of nominees
  10. Instructions from a Seller to remit the net proceeds of a transaction to someone other than the Seller
  11. Any instructions from a Buyer or Seller which do not correspond with the normal type of instructions you would expect to receive during the course of a standard residential or commercial conveyancing transaction
  12. Any transaction which is unusual insofar as it does not follow the normal course or pattern of a standard residential or commercial property transaction
  13. A deposit or the difference between the mortgage advance and the price is paid direct or said to have been be paid direct, to the Seller
  14. Contract documents are not fully completed by the Seller’s representative, i.e. dates missing or the identity of the parties are not fully described or financial details are not fully stated

16.3 Client type

  1. Borrower does not reside at the property
  2. ‘Ideal’ occupations and salaries e.g. earning £100,000 or working in a preferred occupation
  3. The seller is a private company, or has recently purchased the property from a private company
  4. Deposit paid by someone other than the purchaser
  5. First-time property investment of this scale
  6. Current owner has owned the property for less than six months; this may indicate flipping  i.e. re-selling a property very quickly for a substantially increased price, usually involves back-to-back sales
  7. An existing Client asks you to rely on former identify checks i.e. ‘reliance’ exemptions
  8. The buyer is a corporate purchaser and it is unclear whether the transaction is at arms length i.e. the identity of the beneficial owner is not disclosed (or the names and addresses of office holders and shareholders at the company do not reflect those connected with the transaction)
  9. The client’s credit history is not aligned to their age (it may be longer or shorter than might be expected)
  10. The ‘owner’ does not appear to be of the age to have held the property registered to them for the length of time stated

16.4 Remote Client

  1. Where a client is introduced by a third party (e.g. a mortgage broker or an estate agent) who is not well known to the Authorised Person(s)/Parties or the firm
  2. Where a potential client wishing to instruct the body for the first time does not live locally to it and has not been introduced by someone known to it and there is no obvious reason why they should place their instructions with it
  3. Where a client will be using the services of the body for the first time and persuades it to accept instructions from the other party, or the other party instructs the body

16.5 Secretive Client

  1.  Client declines to be met or come to the office and/or uses an intermediary to communicate with the body and/or asks the body to contact him at his business or another address rather than at his home address
  2.  Client shares an address with one or more other parties to the transaction
  3. You suspect that a client is not being completely honest or transparent about any element of a proposed mortgage transaction

16.6 Other parties

  1. Where another Authorised Person(s)/Parties has previously been acting
  2. Person acting on the other side of the transaction is not a lawyer (see Dealing with Non-Authorised Persons(third parties) Code & Guidance)
  3. Impatient parties putting pressure on you to complete the transaction quickly where the reason for urgency is not immediately apparent
  4. The deposit is paid by the buyer directly to the seller or developer
  5. Power of Attorney involved
  6. The details/final destination of documents do not match the contact details for the individual/firm provided in the directory of their regulatory/professional body
  7. A person claiming to be an Authorised Person(s)/Parties is not registered with the relevant Approved Regulator

16.7 Diligence

  1. Deed not signed in front of you (enhanced due diligence is required where you do not meet the client)
  2. Reliance on the diligence of another party

16.8 Valuations

  1. You are requested to alter the value on the Certificate of Title*
  2. You are asked to enter a price on the title that is greater than you know was paid for the property
  3. Discrepancies in value recorded in documents (including the contract, transfer documents, mortgage instructions, certificate of title to lender, Land Registry forms)
  4. Adjustments to the purchase price, particularly in high percentage mortgage cases, or allowances off the purchase price, for example, for alleged works to be carried out
  5. The actual and true cash price to be paid is not the stated consideration in the contract and transfer and/or the price shown in the mortgage instructions and in the Certificate of Title submitted to the Lender

*if the value is altered without the agreement of the lender this is likely to be in breach of the Overriding Principles 1 ‘Act with Independence and Integrity’ and 2 ‘Maintain High Standards of Work’.

16.9.       In each case you should consider whether you authority to make a report to the
lender and/or whether you should cease acting for both the lender and the
borrower.

16.10      The National Fraud Authority’s indicator for UK mortgage fraud in 2012 was estimated at £1 billion. The way in which mortgage fraud is attempted is continually changing; the examples given at item 15 and the possible warning signs provided above, are not intended to list exhaustively all of the areas in which extra caution should be applied. You should remain alert to any transaction, or element within, or party to it, which is unusual or raises cause for concern.

Good Practice

  1. The following are examples of good practices which other firms have employed to help prevent, identify and mitigate fraudulent activities. You are not required to adopt these practices, they are provided for your consideration. It is acknowledged that a number the examples provided have been adopted by larger firms; you may wish to consider adopting/tailoring these practices to align with the size and client profile of your firm.

    17.1        Due Diligence

    1.  Ongoing management/review of relationships with third parties
    2. Open source internet searches against other firms and its staff, including adverse
      information published by any relevant regulatory bodies and credit-checking
    3. Scrutinising, clarifying and verifying the information received from parties connected
      to the transaction, considering risks presented by new mortgage products
    4. Systems for checking the identity of foreign clients
    5. Checking that deposit monies for a mortgage transaction appear to be from a legitimate source
    6. Considering whether property valuations appear to be reasonable
    7. If your client changes while you are acting on a transaction, contact both the old and the new client so you understand the reason for the change of client and are satisfied that it appears to be for a legitimate reason
    8. Electronic identification check with  each client as soon as instruction is received; use a service provider accessing a unique system which matches identity of client  using ID and verifying confidential information known only to client and provider

    17.2        Staff – Fit & Proper

    1. Pre-employment screening of employees
    2. Staff required to disclose conflicts of interest stemming from their relationships with
      third parties
    3. Enhanced vetting methods –  e.g. credit checks, criminal record checks, last 5 years
      employment  – applied to different roles

    17.3        Staff – Training

    1. Lawyer trained to review responses given on source of funding source e.g. does the
      information provided fit the age/ occupation/profile of the client?
    2. Appropriately trained and experienced staff handle the process; training including
      mortgage fraud risks, potential risk indicators and the firm’s approach to handling the issue
    3. Detailed mortgage fraud training for staff (may include scenarios and case studies)
    4. Mortgage Fraud Awareness Manual/Test, updated to reflect new mortgage fraud trends and types
    5. Mortgage Fraud ‘champions’ offer guidance or mentoring to staff and updates on
      new  fraudulent methods
    6. Measure, motivate and reward staff in and the steps they take to prevent fraud
    7. All staff receive training on information security procedures

    17.4        Systems/Controls – Risk Assessment Policies

    1. staff are encouraged to report fraud under a clear whistle-blowing policy
    2. Allocate each conveyancing file a fraud/risk monitoring level
    3. Systematically consider how management information can be improved and used more effectively to mitigate the risk of fraud; systems/procedures/training evolve according to market  intelligence/pressures (particularly concerning information security, fraud and risk information provided by lender  clients), with company AML, Fraud and Risk Policies regularly updated, communicated and training provided
    4. System alerts if lawyer on other end of transaction changes or their bank account details alter
    5. Reviewing negative databases, such as a list of known fraudsters and the deaths register
    6. Standard Terms and Conditions include a clause that stating the lender client will be advised of any relevant information arising; the client’s attention will be brought to the term and they have to sign their acceptance of this

    17.5        Systems/Controls – Authorisations

    1. Accounting functions and controls are separated from transactional client facing functions
    2. Money can only be taken from the client account when more than one person authorises the transaction

    17.6        Systems/Controls – Quality Assurance

    1. Internal audit and compliance teams regularly monitor the adequacy of underlying client take-on arrangements or third party relationships
    2. A formal quality and audit framework to ensure daily quality assurance of key tasks
      undertaken and full compliance audits carried out on a rotational basis

    17.7        Information Security

    1. Information security management systems certified by an accredited certificate organisation
    2. Information Security systems are compliant with the Department for Business Innovation & Skills Guidance
    3. The firm has a written information security policy which a senior member of staff oversees

    17.8        Information-gathering

    1. Engage in cross-industry efforts to exchange information about fraud risks
    2. Dedicated Land Registry team producing company-wide management information

    Should you require information on how to meet your responsibilities under this Code, please see the CLC’s Acting for Lenders and Mortgage Fraud Guidance.

Licensed Body (ABS) Code

This Code will be revised with effect from 1st January 2025. See the new version of this Code.

To view the printable PDF version, please click here.

Only those bodies able and willing to deliver the Code of Conduct’s Outcomes are licensed as CLC Licensed Bodies.

Delivering these Outcomes requires all Licensed Bodies and their stakeholders to act in a principled way in accordance with the 6 Overriding Principles:

  1.  Act with independence and integrity;
  2.  Maintain high standards of work;
  3.  Act in the best interests of your Clients;
  4. Comply with your duty to the court;
  5.  Deal with regulators and ombudsmen in an open and co-operative way;
  6.  Promote equality of access and service.

This Code is in place to help ensure Licensed Bodies meet these responsibilities.

Licensed Body Code
In this Code ‘you’ refers to Licensed Bodies regulated by the CLC, except where ‘you’ is provided under the heading of a designated role in which case the ‘you’ refers to that role. Any stakeholders in the Licensed Body must not act or fail to act, nor permit anyone else to act or fail to act in such a way as to amount to a breach of this Code.

Governance and operational arrangements
Principles

  1.  You ensure all persons with a material interest, managers and employees understand and comply with their regulatory responsibilities and do not compromise the body’s duty to the Court or Client.
  2.  You enable the Head of Legal Practice (HoLP) and Head of Finance and Administration (HoFA) to discharge their regulatory responsibilities.
  3.  You enable Authorised Person(s)/Parties to comply with their own regulatory responsibilities.
  4.  You ensure persons with a material interest are unable to exert improper influence on the body.
  5.  You systematically prevent, identify and address improper influence, allowing independence to be maintained and the rule of law to be upheld.
  6.  You provide a mechanism by which staff can identify regulatory concerns to the HoLP, and any finance-related concerns to the HoFA also.
  7. You operate complaints-handling procedures which consider complaints about both lawyers and non-lawyers.

Specific Requirements

  1.  You have a designated HoLP and HoFA and have applied for/obtained CLC approval of these individuals.
  2.  Your HoLP and HoFA have experience and qualifications appropriate to the body’s profile.
  3. Your HoLP and HoFA are members of the senior management team or Board, or report to the senior management team or Board.
  4.  You provide the HoLP and HoFA with access to the Licensed Body’s managers and staff and the CLC whenever necessary and their views are taken into account and the recommendations taken forward wherever possible.
  5.  You specifically authorise the HoLP and HoFA to dissent from collective responsibility when reporting to the CLC.
  6.  You ensure Non-Authorised Persons who propose to hold a material interest of 10% or more, or a material interest holder proposes to acquire an additional kind of interest, notify both the body and the CLC.
  7.  You ensure the HoLP is notified of any ‘fit and proper’ issue concerning the owner(s), the HoLP, HoFA, other Managers or Authorised Person(s)/Parties .

Specific Requirements –  Non-Authorised Persons with Material interest 

  1. You are a ‘fit and proper’ person and declare to the HoLP any factors affecting this.
  2.  You do not attempt to exert improper influence over the body or individuals within it.
  3.  If you intend to acquire an additional kind of material interest you inform both the Licensed Body and the CLC.

Business arrangements
Specific requirements

  1.  You have at least one Authorised Person(s)/Parties, authorised to provide each reserved legal activity the body delivers.
  2.  You do not employ any person disqualified from being employed by a Licensed Body or any person not fit and proper.
  3.  You do not share Client information with other parts of the business without the Client’s permission.

Head of Legal Practice
Principles

  1.  You understand the regulatory responsibilities of the body.
  2.  You act upon regulatory responsibility concerns raised by staff.
  3.  You keep up- to-date with legislative and regulatory requirements through targeted Continuous Professional Development.
  4.  You ensure Authorised Person(s)/Parties employed by the body are fit and proper.
  5.  You report to the CLC any governance concerns including improper influence.

Specific Requirements – of the Individual

  1. You are an Authorised Person(s)/Parties in relation to one or more of the reserved legal activities.
  2.  You are a ‘fit and proper’ person and declare to the Licensed Body and the CLC any factors affecting this.

Specific Requirements – of responsibility

  1. You ensure the Licensed Body complies with CLC regulatory arrangements and any licence authorisations, permissions and conditions, promptly reporting any breach to the CLC.
  2.  You ensure Authorised Person(s)/Parties are able to comply with their regulatory responsibilities, promptly reporting to the CLC any breach of this.
  3.  You ensure all Non-Authorised Person employees, managers or material interest holders do not cause or substantially contribute to the Licensed Body or any of its employees, managers or Authorised Person(s)/Parties ,  breaching its/their regulatory responsibilities, promptly reporting to the CLC any failures to comply.
  4.  You ensure persons proposing to acquire a material interest in the body, or who have already done so are aware of their duty to notify.
  5.  You ensure you are informed promptly of any circumstance identified under the CLC Notification Code.

Head of Finance & Administration
Principles

  1.  You protect client money and assets at all times.
  2.  You understand the regulatory responsibilities of the body.

Litigation and Advocacy Code Supplementary

To view in a printable PDF version, please click here.

Note: this Code will only apply if the CLC’s application to extend its regulatory scope is successful.

In this Code ‘you’ refers to individuals and bodies regulated by the CLC; all individuals and bodies providing litigation and advocacy services regulated by the CLC must comply with this Code. You must not permit anyone else to act or fail to act in such a way as to amount to a breach of this Code.
All CLC Litigation Lawyer and Advocates are required to comply at all times with the Principles and Specific Requirements set out under the Code of Conduct’s Overriding Principle 4 of Comply with your duty to the Court when providing litigation and advocacy services. This Code provides you with responsibilities supplementary those identified in the Code of Conduct, which are aimed at helping you deliver the Outcomes identified below.

Outcomes-Focused 
The Code of Conduct requires you to deliver the follow Outcomes:

Providing clients with a high standard of litigation and advocacy helps you deliver these Outcomes and requires you to act in a principled way:

  1.  You avoid unnecessary expense or waste of the court’s time.
  2.  You do not offer or make payments to a witness. 1
  3.  You do not say something which is merely scandalous or which seeks only to insult, vilify or annoy a witness or other person.
  4.  Wherever possible you do not name in open court any person if by doing so their character is, or is likely to be, impugned.
  5.  You do not devise facts to assist in advancing the client’s case.
  6.  You advise the Client that your duties to the court override your responsibilities to them.
  7. You do not pressurise a witness; in particular you do not do anything which gives rise to a significant risk that a witness will give evidence which is not truthful.
  8.  You deal sensitively with the evidence of child witnesses and other vulnerable persons, and hold it securely.
  9.  You may refuse to act as an advocate under a conditional fee agreement or where you are offered a fee which you can reasonably be expected to consider inappropriate.
  10.  If 9 is applicable, you inform the client in advance why you are ceasing to act and ask the client to agree to you passing their instructions onto another advocate.
  11.  When appearing as an advocate you do not assert any person is guilty of a crime, fraud or misconduct, unless you consider the assertion is reasonably supported and is material to your client’s case.
  12.  If you become aware that you have inadvertently misled the court, you, with your client’s agreement, immediately inform the court; if the client does not agree to this, you stop acting for them.
  13.  You do not call into question the character of a witness unless you have given them the opportunity to answer the allegation under cross-examination.

1 Except reasonable expenses and reasonable compensation for loss of time attending court

Recognised Body Code

This Code will be revised with effect from 1st January 2025. See the new version of this Code.

To view the printable PDF version, please click here.

Recognised Body Code

Outcomes-focused

Only those bodies able and willing to deliver the Code of Conduct’s Outcomes are recognised as CLC Recognised Bodies.

Delivering these Outcomes requires all Recognised Bodies and their stakeholders to act in a principled way in accordance with the 6 Overriding Principles:

  1. Act with independence and integrity;
  2. Maintain high standards of work;
  3. Act in the best interests of your Clients;
  4. Comply with your duty to the court; 
  5. Deal with regulators and ombudsmen in an open and co-operative way;
  6. Promote equality of access and service.

This Code is in place to help ensure Recognised Bodies meet these responsibilities.
Recognised Body Code

In this Code ‘you’ refers to Recognised Bodies regulated by the CLC, except where ‘you’ is provided under the heading of a designated role in which case the ‘you’ refers to that role. Any stakeholder in the Recognised Body must not act or fail to act, nor permit anyone else to act or fail to act in such a way as to amount to a breach of this Code.
Governance and operational arrangements

Principles

  1. You ensure all managers and employees understand and comply with their regulatory responsibilities and do not compromise the body’s duty to the Court or Client.
  2. You enable the Managers to discharge their regulatory responsibilities.
  3. You enable Authorised Person(s)/Parties to comply with their own regulatory responsibilities.
  4. You systematically prevent, identify and address improper influence, allowing independence to be maintained and the rule of law to be upheld.
  5. You provide a mechanism by which staff can identify regulatory concerns, and any finance-related concerns to any Manager.
  6. You operate complaints-handling procedures which consider complaints about the Recognised Body and any of its Managers or employees.

Specific Requirements

  1. You have at least one Manager who is a  CLC Lawyer and have applied for/obtained CLC approval of any such individual.
  2. At least one Manager has experience and qualifications appropriate to the body’s profile.
  3. At least one Manager is a member of the senior management team.
  4. You provide at least one Manager with access to the Recognised Body’s managers and staff and the CLC whenever necessary and their views are taken into account and the recommendations taken forward wherever possible.
  5. You specifically authorise at least one Manager to dissent from collective responsibility when reporting to the CLC.
  6. You ensure the at least one Manager is notified of any ‘fit and proper’ issue concerning any owner, or Authorised Person(s)/Parties,

Business arrangements

Specific requirements

  1. You have at least one Authorised Person(s)/Parties, authorised to provide each reserved legal activity the Recognised Bodydelivers.
  2. You do not employ any person disqualified from being employed by a CLC Body or any person who is not fit and proper.

Manager

Principles

  1. You understand the regulatory responsibilities of the Recognised Body.
  2. You act upon regulatory responsibility concerns raised by staff.
  3. You keep up- to-date with legislative and regulatory requirements through targeted Continuous Professional Development.
  4. You ensure Authorised Person(s)/Parties employed by the body are fit and proper.
  5. You report to the CLC any governance concerns including improper influence.

Specific Requirements – of the Individual

  1. You are an Authorised Person(s)/Parties in relation to one or more reserved legal activity.
  2. You are a ‘fit and proper’ person and declare to the Recognised Body and the CLC any factors affecting this.

Specific Requirements – of responsibility

  1. You ensure the Recognised Body complies with CLC regulatory arrangements and any authorisations, permissions and conditions on its Certificate of Recognition, promptly reporting any breach to the CLC.
  2. You ensure Authorised Person(s)/Parties are able to comply with their regulatory responsibilities, promptly reporting to the CLC any breach of this.
  3. You ensure that no Non-Authorised Person employee causes or substantially contributes to the Recognised Body or any of its employees, breaching any regulatory responsibility, promptly reporting to the CLC any failures to comply.
  4. You ensure you are informed promptly of any circumstance identified under the CLC  Notification Code.
  5. You protect client money and assets at all times.
  6. You provide administrative arrangements to support the maintenance of high standard of work
  7. You ensure the Recognised Body complies with the CLC’s treatment of money requirements, promptly reporting any breach of these.
  8. You ensure that proper records are maintained to evidence the Recognised Body’s management and supervision arrangements and how they are applied
  9. You promptly report to the CLC when the body is in financial distress or is at significant risk of becoming financially distressed.

Handbook – Other

Overview

The new regulatory regime is underpinned by the Handbook which sets out the regulatory responsibilities of all individuals and firms regulated by us.

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