Council for Licensed Conveyancers

The Council for Licensed Conveyancers’ (CLC’s) objectives are closely aligned with the Solicitors Regulation Authority (SRA). They are an approved regulator and a licencing body. They operate an outcomes-focused and evidence and risk-based approach to their work. Their regulatory aims are to ensure their members deliver high standards, ensure high standards of conduct, and ensure an effective and proportionate regulatory framework.

The way in which they go about their work must be accountable, consistent, proportionate, targeted, and transparent. Their aim is to ensure that allegations are placed in their proper context, fully explored and compared with the CLC’s regulatory philosophy so that only properly substantiated complaints proceed through the process.

Informal resolution is desirable to the regulated community, its clients and the CLC. They will usually take this route before considering regulatory or disciplinary action. They should only exercise their disciplinary powers if the act or omission of a regulated body or individual was a serious breach; assessed to the civil standard of proof.

A CLC-regulated entity can expect a visit within 12 months of inception and every three or four years thereafter. These visits do not normally warrant our involvement, unless the firm (or an individual within the firm) is concerned about whether particular issues should be self-reported as part of the visit.

If the CLC identify some serious concerns in advance of the visit or as part of their investigations, early legal advice will help protect the firm and regulated persons within the firm. Contact our professional regulation team on 0345 872 6666 for an initial discussion on how we can help, or fill in our online enquiry form to request a call back.

How JMW Can Help

When it comes to corporate compliance, the team at JMW guides companies and staff through the relevant compliance requirements to ensure a business is kept on track and does fall into trouble with regulatory bodies such as the CLC.

Our expertise in regulatory and disciplinary proceedings will ensure that your position is protected and advanced to the fullest extent.

The First Contact

The Regulation Supervision Manager (RSM) is the first point of contact for practitioners. The main functions of the RSM are to deal with compliance, disciplinary issues and complaints. Issues will come to the CLC’s attention through periodic inspections, self-reports, complaints and intelligence gathering.

The CLC generally conduct inspections on a three-to-four-year rolling basis, which distinguishes the CLC from the SRA in their approach. They can prioritise practices within the process, depending upon the perceived risk. With new practices, the CLC usually meet them face to face within the first 12 months of coming into CLC regulation.

Typical Areas of Concern

According to the CLC, typical areas of focus are:

Are there any risks or shortages in the financial information?

Is the training up to date?

Are the suspicious activity reports in one place?

Do the policies and protocols refer to up-to-date legislation?

Is the client fully appraised of the service and charges they should expect?

Will the relevant staff be available to assist in the event of a visit?

Is the case management system readily available?

Can the financial reports and other documents be provided in a timely manner and in a searchable format?

Did the firm self-report an issue or was it discovered following a complaint or routine visit?

There are many other topics to consider, but the primary objective is to identify risk, particularly where it relates to the client account and the reputation of the profession.

What to Expect from a Visit from the CLC

For a regular review, a notice of inspection will arrive around three weeks before the inspection date. The CLC should be clear about their objective and the information or documents they want to see. They will often send a questionnaire for completion.

The RSM will arrive around 9am and will often be there all day. They try to avoid Fridays, but this is not always possible.

They will want to see the Head of Legal Practice (HLoP)/ Head of Finance and Administration (HoFA), owner of the practice and key individuals. They expect staff to know about the inspection. The visit usually starts with an opening meeting. Assuming there has already been a desk-based review, the CLC will give feedback on what they have seen so far and will ask whether the firm wishes to self-report any existing concerns.

In visits to larger practices, they may speak to individuals in the practice about what they do, how they are supported, or their understanding of rules and regulations. Questions may be tailored to their particular role. In smaller practices, the CLC focus on the owners and HOLP/HOFA, but can also spend time with accounts staff.

After the accounts review, the RSM will look at individual files. A variety of files are considered with a risk-based focus. This can include purchase files, sale files, grants of probate and wills. They don’t expect people to be available all day but normally want to speak to fee earners about the files.

The RSM will hold a closing meeting where they will give feedback to practices on what they have seen through files, accounts, interviews, supervision, etc. They will give a brief summary on inspection outcomes, although they won’t normally confirm compliance or non-compliance. This is set out in a written report. The RSM will be open to questions, but they will often reserve their position on certain matters. They might leave the firm with a series of disclosure requests, but they will try to leave the firm having gathered all the information they need to produce the report.

What Happens After a CLC Visit?

After the visit, the inspection report is published and rated against the benchmarks within the CLC code: compliant, generally compliant, or non-compliant. If there is a finding of non-compliance in all sections, it’s likely the entire report will be found to be non-compliant. The CLC should act proportionately and should not be punitive, but multiple serious examples of non-compliance will be pursued.

Assuming the CLC find some areas of non-compliance, the firm will be directed to undertake defined actions. Some are at the discretion of the practice and might not constitute a breach of the code. Others might be more serious any may require more comprehensive rectification to avoid enforcement action. The CLC will want to see a clear response to the actions, showing what the firm has done and what the approach will be going forward.

If a firm needs more time to complete actions, the CLC should be reasonable in granting extensions, but it will depend upon the impact of additional delay. Once actions have been satisfactorily completed, the report can be signed off and the CLC might not be in touch for another three or four years.

Types of CLC Sanctions

Refer to the appropriate regulator

They are likely to refer the conduct of a manager or employee to the appropriate regulator where they have reason to believe that the individual’s behaviour is in breach of their regulatory responsibilities.

Reprimand

They are likely to issue a reprimand when an act or omission needs particular attention drawn to it, with the intention that the behaviour of the individual/body is changed.

Licence conditions

They are likely to require the entity to take a specific action(s) where an act, omission or arrangement needs to be rectified. Where this requires expenditure, the CLC should take into account the operational costs of that body. They should make every effort to ensure the condition/direction is understood by the body.

Financial penalties

They are likely to direct the payment of a fine (by the body and/or an individual concerned with it, i.e. an employee or owner) exceeding £50,000 only in serious circumstances. This will be used to penalise inappropriate behaviour demonstrated by a specific act or omission, and to deter future non-compliance (by both the individual/body and others).

A fine must be proportionate, while also at a level likely to give clients and the public confidence that issues that cause them detriment are dealt with appropriately.

If a number of breaches are separately investigated, they may determine it appropriate for a separate penalty to be imposed in each case.

Material interest conditions/objections/divestiture

Where there are concerns that a material interest holder in a licensed body may be demonstrating improper influence (i.e. an owner is influencing, or attempting to influence the decisions of the licensed body or the conduct of authorised persons in a way that would constitute a breach of their regulatory duties - the CLC will take action.

Where there are mild concerns, this is likely to take the form of conditions. Where the concerns are more serious, they are likely to object to the interest and this may ultimately result in divestiture.

Withdrawal of approval

They are likely to withdraw their approval of a licensed body’s HoLP or HoFA where the individual has become demonstrably inappropriate for the role, e.g. an event has occurred that impacts upon their fit and proper status, or they repeatedly fail to meet their regulatory responsibilities.

Disqualification

They are likely to disqualify an individual from a role within a licensed body or a licensed conveyancer from holding a licence only in exceptional circumstances and where the seriousness of the act or omission means that no other enforcement action is judged adequate to address it.

Licence suspension or revocation

They will only use this measure where, due to the seriousness and/or persistence of the act or omission - or the body had changed its structure/provision arrangements, so it is no longer licensable - no other enforcement action is judged adequate to address the identified issues.

The CLC need to be satisfied that clients’ interests are protected. This may include the transfer of a case or all cases to another firm. Suspension is likely to lead to the enforced closed of the CLC body unless the reason for the suspension is cured very quickly, in which case intervention and its case management processes will take place.

Licence suspension does not automatically mean licence revocation. A licence may be suspended because a significant threat to clients has been identified. Where this is found not to be the case or where the CLC (or the First Tier Tribunal (FTT)) are satisfied that risk is no longer presented the licence is unlikely to be revoked. Where this is the case, the body may be subject to a more intensive regulatory relationship.

FAQs About the CLC

What if the CLC identify serious risk as a result of a visit, specific complaints or intelligence gathered from other sources?

The following are examples of allegations of breaches that may lead to enforcement proceedings. The list is not exhaustive and is not ranked:

Persons no longer ‘fit and proper’

Failure in governance arrangements

Fraud and dishonesty

Improper influence

Failure to comply with the CLC’s regulatory arrangements

Ineffective complaints-handling procedures

Failure to provide the CLC with information, or provision of false, incomplete or misleading information

Failure to pay any CLC annual fees or contributions

The way in which these allegations are handled needs to be the subject of specific advice, but the list discloses the broad range of topics that the CLC consider when assessing a firm or individual against its licence criteria.

Can a review/appeal be applied?

The respondent may ask for any decision to be reviewed by the Adjudication Panel. The respondent will also be entitled to appeal. Depending on the nature of the decision made, the appeal may be heard by the High Court, the First Tier Tribunal or the Upper Chamber.

In the case of informal, regulatory or disciplinary action taken by CLC staff, the matter will be referred to their line manager or another director (with no prior involvement in the matter) for review.

Appeals to the High Court must be lodged within 28 days of the determination. All appeals to the FTT must be lodged within 28 days of the determination, unless otherwise directed by the FTT.

Can enforcement stay pending review or appeal?

The Adjudication Panel may provide that the order or direction is not to have effect pending the hearing and determination of a review or an appeal, taking into account the CLC’s statutory duty to act in a way that is compatible with the regulatory objectives. These relate in particular to the consumer interest and the public interest.

They must also have regard to the principles under which regulatory activities should be transparent, accountable, proportionate, consistent, and targeted only at cases in which action is needed.

What don’t the CLC investigate?

Save for exceptional circumstances, the CLC does not investigate the following issues:

Conduct that does not relate to the provision of legal services regulated by the CLC

Disputes between an employer and an employee

Partnership disputes, unless the interests of clients are adversely affected or there is a finding of a court or tribunal

Non-payment of fees incurred in the course of providing services regulated by the CLC, unless there is a judgment against the regulated person for non-payment relating to their legal practice

Allegations from lending institutions of a failure to hand over deeds or papers to which the lender is entitled, unless the lender has already made a successful application to the court

An isolated report of misconduct from a regulated person about a licensed conveyancer or CLC body, unless there is an allegation of serious misconduct, or it is made on the instructions of a client or is made to protect the interests of an identifiable client who has an interest in the outcome

Allegations of misconduct made more than 12 months after the alleged misconduct could reasonable have come to light

Where there is a clear alternative legal remedy available that has not yet been pursued

Allegations of discrimination or dishonesty are not excluded

Talk to Us

To speak to a solicitor if serious concerns have been raised before or during a CLC investigation, contact JMW Solicitors today by calling 0345 872 6666 for an initial discussion on how we can help. Alternatively, fill in our online enquiry form to request a call back.