How the lenders made CQS 'the only game in town'

With the burden of compliance increasing and fees under threat, the last thing most law firms want to do is spend precious time on another accreditation scheme.

Yet, with almost 3,000 firms joining the Law Society's conveyancing quality scheme (CQS), it has become harder and harder to avoid.

Decisions by two major lenders have been crucial. HSBC threatened a mass cull of its panel firms last year, until, following negotiations with the Law Society, the bank agreed that those with CQS could join.

More recently Santander made CQS compulsory for solicitors, which is understood to have resulted in up to 500 more firms joining the scheme.

Howard Salter, partner at Statham Gill Davies Solicitors, said the Law Society made a "big mistake" in allowing the lenders to cut their panels in this way.

"In encouraging the growth of CQS, it encouraged the mortgage lenders to take firms off their panels.

"What has the Law Society done to protect those people without it? The answer is nothing.

"If we go through qualification and ongoing training, we should be competent to act for our clients. If not, perhaps it's the fault of our education and training system."

It is a view only partly shared by Clive Sutton, honourary secretary of the Sole Practitioners Group (SPG). He said CQS had helped sole practitioners qualify to be on lenders' panels and "broken the log jam" in many cases.

"Everyone who majors on conveyancing has to join," he said. "In my view people should not need to be qualified to be on lenders' panels - either they're solicitors or not.

"In a way it's jobs for the boys, but that's the way life is at the moment. The lenders got their fingers burnt by some members of our community.

"CQS will separate some sheep from some goats, one would hope. It won't say if you're a good conveyancer or not, but it will confirm whether or not you're a crook."

Jonathan Smithers, chairman of the Law Society's conveyancing and land law committee, said: "We never said to lenders 'just use CQS' but open panel management is a thing of the past.

"Any firm which is doing this work, should be in it. To anyone who says they are being forced to join it, I would say that we can't turn the clock back to where things were was 20 to 30 years ago.

"We've had a recession. Lenders are dealing with their money in quite a different way. If we did not have CQS, we would have had nothing to offer them."

Smithers added that he believed the number of CQS firms was "close to what we're going to get", bearing in mind the impact of mergers.

Eddie Goldsmith is chairman of the Conveyancing Association, which has 53 members, including many of the biggest firms. He said CQS had filled a vacuum.

"It's the only game in town," he said. "If you want to be a conveyancer in the future, and be on lenders' panels as well as acting for clients, unless you're in CQS, you are doomed.

"Do lay people know about it? I doubt that very much. The perception in the public's mind is probably zero at the moment. There has been no national advertising by the Law Society owing to financial constraints, which I understand."

Goldsmith said he believed the total number of law firms doing conveyancing would fall from about 4-5,000 now to about 3,000, before dropping to 2,000 over the next three to five years.

Things are different for licensed conveyancers. They developed what was billed as a 'rival to CQS' at the end of 2011. Unlike CQS, the Society of Licensed Conveyancers Quality Assured (SLCQA) scheme never got off the ground.

Mike Ockenden, head of the secretariat at the Society of Licensed Conveyancers (SLC), said: "Our regulation should be good enough for lenders to include licensed conveyancers on their panels."

Ockenden said that if the time came when lenders asked for more the society could rely on the SLCQA scheme.

He said that since 2011 ?this had been further developed by the SLC and the TM Group, a specialist search and software company.

"It is functional, but we have not rolled it out because lenders took the position that licensed conveyancers were good for their panels. So we did not need to proceed in the way we originally planned. If the lenders say they want more, we have ?the solution."

At the moment, it seems ?there is one law for solicitors ?and another for licensed conveyancers. 

 

‘CQS is about devaluing professional standards’ Michael Loveridge, a sole practitioner in Clitheroe, Lancashire, said sole practitioners were taken off lenders’ panels whether or not they had CQS.  “My impression is that CQS is essentially about devaluing professional standards,” he said. “If you are a qualified solicitor, the public is entitled to expect that you will be doing conveyancing properly without being part of a conveyancing sub-set. “CQS seems to be designed for volume conveyancers to set up a system of check lists of the kind normally required for those who don’t know what they’re doing and need to follow a flow chart.  “Volume conveyancers can’t afford to employ qualified people because they exist on referral fees. They could have a good system in place but still turn out rubbish.” On licensed conveyancers, Loveridge said: “They are specialists to the extent that all they do is conveyancing. How well they do it is another matter. I wouldn’t say they were better or worse than the average conveyancing solicitor. “If licensed conveyancers are deemed suitable without an additional audit why on earth should we need it with our more rigorous training? If Santander insists on CQS for us, why doesn’t it insist on a similar system for licensed conveyancers?” Loveridge said he was selective about the kind of conveyancing work he did.  “We don’t quote for work where there will also be a panel lawyer. It’s not worth it. These days there aren’t a lot of people ringing for quotes anyway. People are steered towards conveyancers by estate agents. Our work tends to be referrals from existing clients.”