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Streamlining and strengthening the practice approval process

15 May, 2017

We’ve been licensing Alternative Business Structures (ABS) since October 2011. In that time, we’ve gained a great deal of experience in the different regimes for ABS firms and Recognised Bodies (RB) – often called traditional firms.

It has become clear that, contrary to fears expressed by some at the time the Legal Services Act introduced ABS, the new type of firm poses no greater risks to the public and consumer interest than the traditional model. Experience shows, though, that there are aspects of the ABS regime that it would be sensible to extend to Recognised Bodies.

The CLC is now consulting on proposals to streamline and strengthen the policies and processes for licensing entities to carry out conveyancing or probate work. We are seeking views on our intention to:

  • Require all firms (not just ABS) to appoint a Head of Legal Practice and Head of Finance and Administration.
  • Issue entity licences for RBs for an indefinite period (as is already the case for ABS firms)
  • End differential application fees for new RB and ABS entities
  • Make improvements to the authorisation process, simplifying the information to be submitted and revising the ‘fit and proper’ test for managers, owners, HoLP, HoFA and CLC Lawyers to ensure it is proportionate and targeted

The first proposal will bring greater clarity to accountability for compliance in Recognised Bodies without significantly increasing the regulatory burden. Our other proposals will reduce the regulatory burden and lower barriers to entry to the market with no reduction in our high levels of consumer protection.

Our consultation closes on Friday, 30th June.

Read the consultation paper ‘Review of the CLC’s Authorisation Requirements for Entities’