Switching to CLC regulation

The CLC’s regulation of specialist conveyancing and probate lawyers delivers high standards of consumer protection and supports innovation in the delivery of legal services. We ask firms to discuss their plans with us and the CLC participating insurers at an early stage. This is just as important for established firms looking to move to a new regulator, as for start-ups just entering the market.

 

Frequently asked questions

Is every switch the same?

No. Each business is unique and will have different drivers for seeking to change its legal regulator. The outcome may also be different. Many firms look to incorporate corporate, finance and governance changes. However, two standard business models have emerged:

  1.  The ‘switch’ model (from SRA to CLC regulation) where a SRA firm delivering conveyancing and/or probate services moves its entire business to CLC regulation. The firm agrees a ‘switch day’ with each regulator. Firms seek to ‘switch’ their lender accounts on the date of switch.
  2. The Hive-off model – a SRA practice sets up a CLC practice to deliver conveyancing and/or probate services, the SRA practice continues to deliver other legal services such as family law, litigation and company commercial services. The SRA firm may either (i) run down its conveyancing services over a transition period; or (ii) continue to deliver some (or all) its current conveyancing services. Firms seek to hold both a SRA and CLC account with Lenders either for a ‘transitional’ period to manage the operational transfer.

 

Why is the hive off model popular?

The hive off model has been adopted:

  1. as part of a wider succession or reward programme to expand the group structure;
  2. to accommodate new investment, ownership and/or governance structures;
  3. to provide a business/delivery/reward model that is complementary but different to that offered by the SRA firm; and
  4. to house the conveyancing and probate functions in a separate entity under specialist regulation with the CLC – whilst retaining a group structure by association of name/branding.

 

Can I retain Lender and panel membership if I switch regulators?

This is not a problem for most practices. It is very important that you speak to Lenders and panel managers to let them know that your practice is switching regulators or intending to hive off its conveyancing services into a new CLC regulated practice, and keep them informed of progress. Each Lender has their own panel requirements and you will still need to comply with those requirements to retain any existing memberships.

 

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

All CLC practices must obtain PII from an insurer which has entered a Participating Insurers Agreement (PIA) with the CLC. Those insurers are listed on the CLC website.

 

Can I continue to source PII through my current insurers?

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

 

Will I have to pay for run off cover?

This will depend on the nature of the past legal services that the firm has provided and the extent to which a CLC Participating Insurer is willing to provide cover. Your past claims history together with the types of work that your practice has provided will also be relevant. Early discussions with a CLC PII Broker will help you to understand the PII cover options available to your firm.

 

Who will be dealing with my application?

Claire Richardson leads the CLC’s Licensing Team on licensing@clc-uk.org or 0203 859 0904.

 

What legal services does the CLC regulate?

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

 

I am a Solicitor or FCILEx.  Can I be approved as a manager of a CLC practice?

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

 

How quickly can you process the application?

You can start talking to us about switching or hiving off immediately. Once you have registered your interest Claire Richardson will talk you.

The first step, which is at no cost to you, is for you to tell us about your practice. We will ask you to provide some standard information about the business for us to review. We will agree with you the overall approach to changing regulator and the timescale for the application to help you manage the changes you are aiming to achieve.

 

Are the application forms available on the website?

No. It will help you and us to have a conversation with you about your practice before you complete any forms. We also suggest that you take up our offer for us to meet you and your colleagues at your offices. This provides an invaluable opportunity for the key decision makers in the firm to be involved early on in the process.

 

Can I speed up this process?

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

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

 

What type of assurances is the CLC looking for?

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

 

What are the application fees?

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

 

What are the CLC’s regulatory fees?

From 1 November 2019 the practice fee rates are being reduced by 30%. This follows a 20% cut made in 2016 and 10% in 2018.  The Compensation Fund contribution rates are being reduced by 60%.  The CLC Fees Framework is on the CLC website. .

 

Contact us

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

Email the Licensing Team on licensing@clc-uk.org or call on 0203 859 0904.

 

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