Grand scheme

Six months in and all is going according to plan. The Law Society announced the launch of its scheme at its Property Section Conference in October 2010. The first applications were accepted in January 2011.

The application form has required practitioners to give detailed information about their firms, their management structure, the individuals within the practice, professional indemnity insurance matters, complaints handling and so on.

Even for the well organised, completion of the form has been a time-consuming experience, indeed as it was designed to be. To have credibility the scheme must be robust. This is not meant to be a ‘five-minute job’. The information on the form is cross checked against other databases to ensure it is correct. As many hundreds, and it is hoped thousands, of practices are to be accredited it is essential to capture and verify this information, not least to demonstrate to other stakeholders, particularly lenders and insurers, that the society knows with whom it is dealing, not just in terms of the firms or business units, but also the individuals within them.

The society too has been learning and amending in this initial phase, so the application forms have been streamlined a little, notes updated and FAQ’s provided. In addition, helplines have been set up with new staff recruited and trained to deal with the many varied and frequent questions raised by practitioners during the process.

At the time of writing there have been well over 850 applications. Numbers are growing steadily. The target for accreditation is a maximum of six weeks after a completed application is made. Some firms, in their haste and enthusiasm to apply, have not provided all the necessary forms and details which has meant a delay in some cases. The society has been contacting the applicants both by email and telephone to ensure that they know what to do.

First contact

The Law Society has also embarked on a substantial campaign to inform both practitioners and the public. I, and others, have been speaking at CPD events around the country. Almost without exception all the practitioners to whom I have spoken are aware of the scheme and the reasons for it. Almost all are enthusiastic that the Law Society is leading the profession and providing a solution. Occasionally one encounters some who are less positive. The argument usually runs that the badge of solicitor should be enough. If only it were. A quick look at the disciplinary proceedings page at the SRA website will regrettably tell you otherwise.

The society has had close contact with lenders and insurers throughout the scheme design and is continuing to do so. CML has been particularly strong in its support and I understand is delighted to see the way in which practitioners are picking this up and applying. It adds yet more weight to the argument that lenders can and should use the CQS as one method of selection for panel membership. It is unlikely that lenders would ever delegate such authority to the Law Society – indeed their obligation to their own regulator would not necessarily allow them to do so – so membership of the scheme can never necessarily guarantee panel membership.

Again, some will see this as controversial, but it is not a position driven by the Law Society. Poor practice, negligence and fraud, even when committed by a relatively small number, coupled with pressure from the Financial Services Authority, has driven lenders to a position where they need to look at the base which supplies them with services, in this instance panel membership.

New protocol and code

The documentation supporting the CQS and the day-to-day practice of solicitors has now been issued. The protocol first launched last October and, with some minor refinements, is now fully ‘live’ from 1 April. It auto-matically supersedes the previous one, so if your ‘standard’ letters say you are using the protocol, it is now the latest edition!

The Law Society’s ‘Code for Completion by Post’ was also launched on 1 April. This document updated the previous successful and ‘industry standard’ code, now to take account of changes particularly in Land Registry practice following the introduction of dematerialisation, identification proced-ures, early completion and electronic discharge.

As with the protocol, the new code supersedes the previous edition. The first of the TransAction (TA) forms has been updated, with a minor change in form TA13: the completion information and requisitions has now been renamed ‘completion information and undertakings’. There has also been a reordering of the form and its questions, so if you are using standard form replies you need to make sure these are updated. The new protocol and the code both require that replies are given in a standard form by the seller’s solicitor to the buyer’s solicitor.

Updated standard conditions

One of the major pieces of work for the Law Society was to update the standard conditions of sale to produce a fifth edition. The protocol requires that the conditions are used without amendment other than special conditions bespoke to the transaction. The CQS accredited firms are bound to use the protocol, so providing a document fit for purpose was a priority. The new conditions were launched on 1 April following collaboration between the joint copyright holders, OyezStraker and the Law Society.

The new edition has incorporated a number of commonly used amendments and rebalanced the obligations to ensure fairness between the parties.

Amendment by special conditions to the previous edition had been growing to the extent where in some instances there was little left of a ‘standard contract’. The balance had shifted largely in favour of the seller and time in the conveyancing process was being spent (and wasted) in negotiating what should otherwise be a ‘standard contract’.

Targeted education

Another limb of the CQS is to raise standards by targeted education. This is to encompass not just those who are already covered by the regulatory CPD net but other unqualified fee earners. Although this part is still in an early stage, three modules have been developed. The first is training for the senior responsible officer (SRO) within each individual practice, the second on practice management standards for those firms that are not Lexcel accredited and the third is specific training on the protocol for all the fee earners.

Each of the modules are available as desk-based training available through the Law Society CPD centre.

Coming up

Where to next? The Law Society is working hard, encouraging practices to submit the applications and processing them as quickly as possible. The learning curve for those practices being accredited needs to be a quick one. Embedding of the new protocol, perhaps refreshing the memory of those who have not looked at it for some years, coupled with using the new standard conditions should go some way to improving things quickly.

In the next six months it is likely that some lenders, either directly or through the CML, will be making more direct statements and enquiries about membership of the scheme. By the end of the year a review of the current property information form (TA6) should be underway. The society is committed to making sure that the documentation to support this scheme and practitioners is made available.

Practitioners should be under no illusion. This is not about paying lip service to improving standards or pulling the wool over the lender’s and insurer’s eyes. This is about our profession showing that they value this work, they care about it not just for themselves, but for their clients, and are committed to improving the process.