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Remaining on top of compliance and lawyer competency – Conveyancing Services
September 30, 2022

 1. Introduction

With the recent announcement of the permanent stamp duty land tax (SDLT) cuts, firms and conveyancing practitioners will undoubtedly be waiting to see how this will impact their business and the volume of workload.

 2. Monitoring risks with increased workloads

The previous Stamp Duty Holiday in 2020 led to an influx of conveyancing work few could have foreseen, with buyers scrambling to complete their property purchase before the deadline. Whilst this new permanent cut is unlikely to cause such a panicked increase in property transactions, another spike in demand for legal services could ensue (possibly tempered by growing economic pressures and rising interest rates). Firms must consider the risks presented, ensuring correct processes and procedures have been implemented. Without appropriate consideration, especially over high-risk factors such as anti-money laundering and SDLT obligations, overstretched lawyers could make mistakes as the pressure on firms’ resources increases.

Considerations for firms should include areas such as:

2.1. Case handling and complaints

The Legal Ombudsman previously highlighted concerns regarding an increase in client criticism, including complaints for the non or late payment of stamp duty land tax which can have significant consequences for homeowners and severe repercussions for law firms. Penalties for law firms have included The Legal Ombudsman ordering firms to pay the outstanding stamp duty plus penalties and interest as well as compensation for the distress and inconvenience caused. The Solicitors Regulation Authority (SRA) and Council for Licensed Conveyancers (CLC) have also intervened in several cases, with the most severe resulting in closing firms and their operations down.

For all law firms, receiving an allegation of negligence and/or a complaint is unpleasant but, also the reality of being a service provider. As much as firms will always try to get things right, mistakes can and will happen, but how can these risks be minimised and controlled? Read our previous article Top Tips for Avoiding Complaints which covers areas such as compliance,  supervision, experience, and file reviews.

2.2. Fulfilling AML Obligations

Conveyancing is high-risk for money laundering, and the SRA has warned that it will not be relaxing its monitoring of money laundering compliance. Instead, activity will likely be stepped up, with further audits being carried out over the rest of the year and into 2023. Some of the biggest concerns from the SRA include firms with insufficient Customer Due Diligence (CDD), plus gaps found between policies, procedures, and guidance from the money laundering compliance officer (MLCO) and what happens on a day-to-day basis in practice.

The regulator has made it abundantly clear that it expects firms, and those holding client responsibility, to be alert to their obligations in respect of preventing money laundering. Failing to uphold these obligations is becoming increasingly more severe, especially if suggested updates come into force. – SRA could be given unlimited fining powers for AML breaches.

2.3. Teams Working Remotely or Across Multiple Locations

Many firms contain teams or departments working across multiple offices and locations (including home working) under one supervising individual (based in one location). The supervision of these groups is more challenging as supervisor time is more strained. However, the firm should adopt strategies to ensure that an adequate level of supervision is achieved to manage the increased risk of a geographically dispersed team. – Read our previous article on Long Term Supervision of Remote Workers in Law Firms.

Recent guides: The Strategic Partner offers a wide range of information for members and subscribers to our newsletter. Read our previous articles, which cover several high-risk factors on property matters and regulatory obligations, which firms must consider as file loads potentially increase.

Advising on Leasehold Provisions Including Ground Rent Clauses

Avoiding Claims for Multiple Dwelling Relief (MDR)

Setting up Policies and Procedures

 3. How confident are you about compliance?

The Strategic Partner is a law firm knowledge hub. We work with both law firms and professional indemnity insurers, advising and guiding on risk management techniques to assist and reduce instances of claims or regulatory breaches.

If you believe your firm may be at risk or wish to confirm your firm is achieving the required standard, at The Strategic Partner, we offer a range of solutions.

  • Regulation 21 AML 2017 Independent Audit – A review of the firm’s approach to regulation and compliance to include AML procedures with the audit meeting the requirements of Regulation 21 of the AML 2017. The output of which provides the firm with a written gap analysis and solutions to remedy any issues that rise and ensure the firm is compliant, find out more
  • Training – Our typical AML Training includes:
    • AML Training for ALL staff to meet the firm’s obligation to provide annual training.
    • 1-2-1 training for the MLRO and MLCO on their obligations and requirements.
    • Practical training for those involved in client onboarding to ensure their ID and AML checks are correctly completed.
  • File Revies/Auditing– At TSP we engage with firms undertaking files reviews where we consider procedure, staff, systems and files to ensure the procedures are up to the required standard and being implemented at case level with a report of the outcome

Our packaged risk and compliance solutions provide guidance and support to firms on a range of topics and include: –

Our Risk, Regulation and Compliance Service (including AML), provides firms with the necessary Policies Control and Procedures (PCP’s) – that are in line with CQS requirements and the standard of the relevant quality mark –  alongside training, supervision structure, an annual independent assessment and reporting. This solution ensures firms, and their staff are compliant and remain there. It also clarifies what to do in the event of a mistake and/or a breach occurs.

Our extended service, Risk, Compliance, AML Guidance and Register Administration, provides an outsource solution for firms where The Strategic Partner not only manage and maintain the risk registers and provide guidance to all staff (inc Partners) we also produce monthly risk and compliance report.

The combination of these two solutions provides a law firm with a robust and cost-effective risk and compliance strategy that ensures staff have access to expert guidance as it is needed.

 4. Accreditation and Quality Marks – CQS

In much the same way as for Lexcel, WIQS and SQM, The Strategic Partner can work with firms to provide the needed resources and expertise to maintain and renew the CQS kitemark, including the management of any assessments, completion of applications and updates to applications.

We are fully aware of the requirements of each of these kitemarks and how firms should act to ensure they maintain them throughout the provision of legal services.

Our focus is to provide firms with the necessary resources and expertise to control and maintain all regulatory requirements and quality kitemark

Our services are all charged on either fixed fees or on a timely basis, all of which will be agreed upfront for the service required.

All services we provide will include:

  • Completion of any application, be that a new application or for renewal
  • Development and maintenance of policies and procedures that are in line with the firm’s requirements and the Standard of the relevant quality mark.
  • Preparation for audits and assessments on an annual basis
  • Provision of auditing solutions and reporting on such audits
  • Liaison with the body to oversee assessments
  • Reporting to the Partners/Directors on any issues as they arise
  • Provision of solutions to overcome the issues.

The solutions we provide are either a complete outsource and maintenance programme or project-based assistance, as required.

 5. Get in touch with our compliance team

We would be pleased to discuss your current approach to regulation and compliance and how our services will assist you in ensuring your firm is protected.

Contact our team today on 0203 911 9710, email us info@thestrategicpartner.co.uk or make an online enquiry here to request your transparency fee rules review.

 

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