Introduction
Despite the fact that it potentially affects so many solicitors’ firms, there has not been a great deal of comment, either on the Law Society’s website or in the legal or other press, about the changes made by the Law Society earlier this year to the Conveyancing Quality Scheme’s (CQS) Core Practice Management Standards (CPMS). Published in February of this year, the changes come into effect on 1 May and will affect all firms that are signed up to the CQS scheme. However, firms will struggle to know what those changes are since it would not appear that they have been detailed in any way by the Law Society who have simply published the revised CPMS without explanation and simply referred firms on their website to the out of date CQS Toolkit which was published back in June 2019.
Background to CQS
The Law Society introduced the CQS, in conjunction with the property lenders, in 2010. It was intended to be a means of addressing not only the increasingly widespread practice of illegal property fraud that was, and continues to be, prevalent but also as a means of enabling solicitors to demonstrate best practice in an increasingly competitive marketplace. Whether it has achieved either is open to conjecture.
The CQS is described by the Law Society as “a recognised quality standard for residential conveyancing practices” with the potential to “minimise your practice’s risks of claims and protect your brand’s reputation”. It states that there are three core values that members espouse, namely to:
- proactively and effectively manage risk and demonstrate behaviours that support and promote the integrity of CQS and the community,
- demonstrate best practice and excellence in client care through robust practice management of residential conveyancing, and
- demonstrate thorough knowledge and skill in handling conveyancing transactions
There can be no doubt that, if the requirements of the CPMS are implemented and followed that there will inevitably be an increase in the quality of the work undertaken by firms. Unfortunately, the lack of any vigorous assessment of the CPMS means that for many firms, compliance is very much a question of paying lip service and hoping that they will not be one of the firms subject to what even the Law Society describes as “a small number of on-site visits each year”. One of the clear weaknesses of the scheme has been the fact that firms can secure registration by claiming to be “working towards” its various indicators in the Practice Management section G of the Application Form.
The result is that many are unconvinced as to the real-world effectiveness of the Scheme, with a common view being that the scheme is simply something of a “cash cow” for the Society. With application fees of at least £476 and reaccreditation fees of £285 per year for a sole practitioner this is perhaps understandable. The Chartered Institute of Legal Executives has likewise expressed doubts as to whether the scheme – available to solicitors’ firms only – can really be said to be a true reflection of the full range of quality or choice in the sector.
There are further concerns that the limited range of “authorised” CQS training providers (the Law Society and The Access Group), combined with the requirement for accredited training, means that yet further fees are garnered by the Society.
The Latest Changes
The changes to the CPMS were published in February this year and take effect next month. Despite this, at the time of writing and only days ahead of the new requirements coming into effect, the scheme rules and guidance notes on the Society’s website remain those put in place in October 2017/2018 with only the CPMS having been updated – and even then without any indication as to what those updates are. This is a problem further exacerbated by the fact that not only have the Society completely changed around the order in which items appear in the CPMS, they have also published the CPMS in a completely different style without indicating what is anew and what is carried forward from the previous version. Add to this the fact that they have not left the previous standards easily available, and it can be seen that making a comparison between the two versions is really very difficult.
So what are the changes to CQS?
So far as structure is concerned, there are now seven sections to the CPMS rather than the previous six. “Structure and Strategy” and “People Management” have been added to the list of sections whilst “Supervision and operational risk management” has been dropped. There is also a glossary of core terms preceding the seven numbered sections.
Those who are Infolegal members can access a destination table showing how all of the former and new provisions inter-relate and provisions and guidance dealing with the standards can be found in the Infolegal Office Procedures Manual.
Many of the changes are simply a renumbering or re-combining of existing provisions. There is a mistake in that there are two standards that are both numbered 5.8 which may cause problems going forward if firms incorporate existing numbering into manuals only to have that numbering changed at a later date. Since the second 5.8 and 5.9 used to be the same provision (3.5) possibly they can be recombined so as to cause as little disruption as possible.
There is a substantial simplification of what the Standard requires in terms of data protection compliance – but since this is only that which is in any event required by the law is probably not something that needs to be made a requirement of the CPMS. More importantly the previously anomalous requirement for a firm to appoint a Data Protection Officer (DPO) has been removed. Another requirement which has also been simplified is in relation to information management and security – although the reference to Cyber Essentials continues.
The new CPMS have incorporated from Lexcel the requirement to have a register of plans and policies and the requirement to have induction processes.
There are a number of new, or more onerous, requirements placed upon firms. These include a requirement at 5.12k for there to be a documented individual AML risk assessment on every file, a documented fraud risk assessment on every file and enhanced requirements where there is a high risk of fraud. There are also enhanced requirements in relation to SDLT (including providing the client with information about SDLT and a SDLT calculation at the outset of the matter), enhanced requirements in relation to the information provided in leasehold matters and enhanced requirements in relation to dealings with lenders.
In several other places, the new Standards are less onerous than the previous version. Among these is in relation to the information to be provided to clients at the outset of the matter. It has to be wondered whether some of the omissions are mistakes, given that in some cases, for example in relation to costs estimates and name and status of the person handling the matter, there is a duty elsewhere to provide updated information when those details change – despite there being no requirement to provide the information in the first place.
Going forward, the Law Society is going to need to make changes to some of its application forms, several of which were badly out of date before the recent changes, and which still make reference to the SRA Handbook and the 1998 Accounts Rules.
Conclusion
There is no escaping the fact that the latest version of the CPMS has the feel of a standard that has been drafted in a hurry, with insufficient checking and created by someone with an insufficient knowledge of the practicalities of a residential conveyancing practice. It is still, it has to be said, a standard for small practices and in particular those who do not operate client portals or have access to some of the more forward looking conveyancing management software. Clearly it must address the needs of all firms – including those that still operate what is largely a manual system. However, it could have included more forward thinking ideas and acted as a means for improvement.
At the end of the day, it is what it is. A standard that is not rigorously checked, applies only to solicitors, is an essential for many panel memberships and which is largely a mechanism for income for the Law Society rather than a genuine attempt to improve the level of service offered by firms. Or is that being cynical?
To find out more about how Infolegal can assist your firm with its CQS compliance, please email enquiries@infolegal.co.uk.