The Law Society of England and Wales announced the launch in January of a conveyancing quality scheme (CQS) that will accredit individual firms.
The aim is to demonstrate high-quality standards among conveyancers, and improve the confidence of lenders and consumers in the integrity of services provided by the profession.
Firms qualifying for the scheme will need to comply with higher standards covering the competence and probity of staff, the financial standing of the firm, supervision of staff, and administrative processes.
Lenders will continue to control membership of the individual panels.
In its latest issue of News & Views, the CML says if the new scheme is seen as robust by lenders, many are likely to require CQS accreditation as a minimum condition for panel membership.
Also underway is a review by the Solicitors Regulation Authority (SRA) on professional indemnity insurance.
The SRA is reviewing arrangements for professional indemnity insurance and compensation should a solicitor stop practicing as a result of negligence or fraud.
Although the review is still in its early stages, there have been indications that the regulatory minimum standards may be changed and potentially will not include cover for lenders as commercial clients.
That would leave solicitors free to choose whether or not to take out separate PII covering potential losses by lenders.
The CML says: “In reality, we would expect lenders to require effective professional indemnity insurance if they are to keep a conveyancing firm on their panel.
“Lenders will therefore demand greater transparency about firms’ insurance arrangements and will be more active in supervising and monitoring their activity to ensure professional indemnity insurance will be sufficient to cover lenders’ risks.”
The SRA is planning to publish a paper in December, with a three-month consultation exercise. This has the potential to restructure conveyancing arrangements in England and Wales.
The trade body says the responsibilities of solicitors for holding, releasing and transferring funds leaves lenders exposed to the risk of fraud by unscrupulous practitioners who collect the mortgage monies but do not pass them on.
