14 February, 2022
Chair’s Report from Dame Janet Paraskeva
This is the first time I have written a report on a CLC Council meeting. I hope that it will give those we regulate and other stakeholders a different insight into how we go about our work. We have formal quarterly meetings to review performance and to consider policy issues and regular, informal workshop sessions to have initial steering discussions with the executive team on a wide range of challenging or innovative questions. There are weekly written updates to Council too on the full breadth of the CLC’s work and other updates as needed. The agendas and papers for the formal Council meetings are published here.
The Council brings together lawyers and non-lawyers with a broad mix of experience that is relevant to the work of the regulator. You can find out more about the members of the Council here. The Council is supported by the Audit and Risk Committee, which meets quarterly and in advance of Council, making reports and recommendations to it. There is also a Remuneration Committee and Appointments Committee that each meet periodically through the year.
The first Council meeting of any year is always a busy one as we sign off on the budget and business plan for the year as well as reviewing performance the end of year outturn for the past year. Those decisions are informed by our quarterly reviews of progress against the business plan and management of the budget, scrutiny by the Audit and Risk Committee throughout the year and a rigorous programme of independent internal audits.
It is a great accolade for the organization that, for the fifth year running, the internal auditors have assessed the CLC’s achievement with the highest level of assurance possible, judging that the CLC has an ‘adequate and effective framework for risk management, governance and internal control’.
The performance of the CLC will be set out in detail in our Annual Report and Annual Financial Statements that will be published in early April. It was good to confirm at this meeting that the CLC continued to meet its objectives in relation to consumer protection through standard-setting, monitoring and enforcement as well as making major innovations such as the changes to meeting the costs of the Legal Ombudsman that we introduced last year. Work on the review of Professional Indemnity Insurance ran throughout last year and the Council will consider the results of the current consultation in March.
Other major achievements in 2021 included the ongoing provision of advice and support to practices in relation to the impact of the pandemic, improvements to the disciplinary process leading to referral to the Adjudication Panel, the realization of cost savings that were agreed in late 2020, and a significant programme of scrutiny of Anti-Money Laundering measures that practices have in place, including the publication of our first AML-specific report.
The team make very prudent use of resources with the aim of keeping the financial burden of regulation to a proportionate level and have also been managing down excess reserves that had built up over time.
Planning for 2022
The Council approved the Business Plan for 2022. Details of the budget that supports the delivery of that plan will also be published on our website soon.
Outside the ongoing core work of regulation, this year will see an additional focus on complaints handling. We will be asking practices for much more information about the complaints they receive and how they deal with them. That will help us to provide support to reduce the numbers of referrals to the Legal Ombudsman (LeO) overall and we will especially be targeting firms with levels of referrals that are disproportionate to the numbers of transactions they handle each year. This is an important part of the changed approach to meeting LEO’s costs, which, over time, will see firms with high complaint referral levels bearing more of the financial burden of the handling of those complaints by LeO.
Key Performance scrutiny
As you would imagine, a central part of the Council’s work is to review the CLC’s performance on its core regulatory work and to that end we always review the CLC’s watchlist, which tracks the progress of serious disciplinary matters as well as claims on the Compensation Fund, the CLC’s own Principal Risk Register and a set of Key Performance Indicators that run across the organization. This provides scrutiny and challenge for the executive team and brings the varied expertise of the Council Members to bear on their work.
Playing our part in the Legal Sector
At this meeting, the Council also considered the findings of the Legal Services Board’s (LSB) Regulatory Performance Assessment of the front-line regulators that was issued in late 2021. This found that the CLC was meeting all of the outcomes that the oversight regulator sets for the front-line regulators but that there was more they felt the CLC should do to explain our policy- and decision-making process. This Council bulletin is part of our effort to address that, along with other additions to published content on our website and to our Annual Report and our other stakeholder activities through the year.
The CLC also reviewed a draft response to the LSB’s consultation on its draft business plan. The Council made some additions to that, and the response has now been submitted and published on the CLC website. This prompted discussion of performance at the Office for Legal Complaints (OLC) and about the outcome of OLC’s consultation on its own business plan. One of our Council Members, Teresa Perchard went straight from the Council meeting to a meeting of the OLC’s Challenge and Advisory group, where she represents the CLC and brings how own experience of consumer affairs to bear.
The Council also considered a draft Joint Regulator Statement on Disciplinary Sanctions in relation to findings of discrimination in the regulated sector. The LSB continues to develop this draft, so it would be wrong of me to say more other than that it currently sits comfortably with our own work in relation to diversity and inclusion and we are supportive of the principles.
The Council will meet again on 10th March for an informal workshop session on ongoing competence (CPD) and to review the findings of the consultation on PII arrangements. We will enter a formal session then also to finalise a submission to the Legal Services Board on any changes to our PII arrangements. On 24th March will meet solely to finalise the Annual Financial Statements for 2021. Our next full formal meeting will be on Thursday, 12 May and the papers for that meeting will be published here prior to the meeting.
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