Rank and file

The Law Society's Conveyancing Quality Scheme (CQS) has the potential to change the game and shift the balance in favour of our profession. It is a product specifically designed to aid and assist solicitors by offering lenders and insurers a much-needed incentive.

For some years many practices have seen conveyancing as an 'add on' to other services, even where it forms a substantial part of a firm's fee income. Day-to-day working is often undertaken by unqualified or inexperienced fee earners.

In some areas this has led to a downward spiral, where firms have tried to capture a greater market share by concentrating on price and cutting fixed overheads '“ such as qualified and experienced staff. This, in turn, has led to the quality of legal advice suffering the consequence of which has been an increase in complaints and incidents of negligence. Of course, in many cases the picture is more complicated.

Some manage their businesses more successfully than others, but, at its most crude, Lidl prices rarely mean Marks and Spencer's quality.

Why should that matter? Mortgage lenders are under increasing pressure from their regulators to stem losses. Those may occur in many ways but poor performance by conveyancers is seen as one that has been tackled. Some lenders have used a very blunt instrument when looking at panel management. Equally, qualifying insurers have found it hard to distinguish between those practices that offer quality conveyancing and those that simply offer conveyancing. Negligence actions is a crude measure as they may occur many years after the work was undertaken so volume of conveyancing (or percentage of turnover) is seen as a 'rough and ready' calculator.

A win-win situation

The spectre of fraud haunts us all, the incidence of it may be rare but the consequences of financial loss can be extreme. A very small number of our professional brethren act dishonestly. Perhaps a greater number are used by their clients as instruments of fraud. Financial pressure on hard-stretched practices has sometimes led practitioners to make unwise decisions under pressure from slick operators.

How does the CQS help? There is a two-pronged approach. The first is to look at the probity of the practice. Lenders and insurers want to know that the practice acting for them and those conveyancers within it has not only a sufficient robust model but also a track record of honesty. Identity and status checks for individuals and firms alike will go some way into establishing that.

The way firms are run can be a marker in reducing risks. Having proper management processes, whether a sole practitioner or a large firm, is central to reducing risk.

How do you increase the quality of work? Solicitors all have CPD requirements (although they do not have to be specific to their work area) but unqualified conveyancers do not, so, to increase quality, fee earners (qualified or not) will need to have CPD accreditation. This is likely to be in subjects designed to increase the knowledge base. I hope that modules focusing on such subjects as positive and restrictive covenants and the use of defective title indemnity insurance might assist in easing transactions by stopping them getting stuck down legal blind alleys.

Strength in numbers

Underpinning the drive to quality is a new generation of the protocol. The previous editions, although well tried and tested, dealt only with the relationship between solicitors and were something of a list of 'dos and don'ts'. The new protocol has a list of overriding obligations. There are still recommended actions, some of which hark back to the previous editions but have been brought up to date, with advice and reminders on Land Registry restrictions and 'early completion'. For those who currently seek to do the work well they may find little or no change. For those who do it less so, they will need to up their game.

That is all very well you may say. When the protocol was first introduced there was much enthusiasm, but over time lots of people said they used it but probably hadn't read it for years and anyway have only paid lip service to it. Some firms, over time, developed their own voluminous additional enquiries and additions to the contract which rather negated the benefit of having it in the first place.

With CQS, the Law Society is seeking to address these issues, not to limit the necessary freedom to act in the best interests of ones client, but to do so in a way which tackles the needs of each individual rather than a blanket approach for all. Too often conveyancers argue that what they are doing is in the best interests of their client, not realising this may unfairly disadvantage the person on the other side, buyer or seller, and thereby failing to see the bigger picture.

It is proposed that there will be quality assurance; monitoring enforcement will be undertaken with spot checks. If the firms in the scheme persistently break the rules their membership may be terminated.

Why is all this important? Lenders and insurers have shown enthusiasm for the scheme. It will assist lenders in panel management decisions and give insurers better data to manage their risk which may result in fairer premiums. Raising the quality of work gives our profession a chance to get ahead of the competition. Speculative capital that will be with us in an alternative business structure world will want quick profit. They will find it harder to compete against real quality where underpinned by financial probity.

Will it work? The profession has not always shown itself willing to embrace change. Some may not see the risks ahead or the writing on the wall. If your indemnity renewal round has not been too painful and you are still on all the panels, you may assume that will continue. You will do so at your peril.

The Law Society is putting considerable resource as a commitment to making this work; I hope the profession understands the reason it needs to sit up, take note and get on board.