SRA attacks The Law Society as technical regulator

Responding to the interim report from the Competition and Markets Authority legal services study, the Solicitors Regulation Authority (SRA) said: “Those who represent a party cannot also regulate it. Measures that regulators could take to open up the market to competition are resisted by their representative arms, who naturally seek to protect the interests of their members.”

The comments are thinly veiled criticisms of the current structure, which retains the Law Society as the technical regulator of the profession, albeit delegating its authority to the SRA.

The society and the SRA are battling over the future shape of regulation. In its comments yesterday, the authority said that the current situation “leads to public confidence and trust in regulated providers being undermined”.

It went on to claim that complete separation for the SRA “would free up the professional bodies to become the voice of their members, without the restrictions of also acting as the regulator. It would also allow more flexibility for law firms and solicitors to decide how specific industry bodies, such as the Association of Personal Injury Lawyers or the City of London Law Society, can work alongside professional bodies to best meet their needs”.

The SRA maintained that “public polling shows that independent regulation would boost trust in solicitors”.

Conveyancing sees 24% rise in Q2

Conveyancing transactions rose by a healthy 24 per cent in the second quarter of this year, according to a report from Search Acumen, which monitors the sector. Researchers attributed the rise to reforms to stamp duty and land tax. From the beginning of April, the government levied a stamp duty surcharge on second homes, a move that appears to have triggered a rush to buy before the deadline.

Whatever is causing the boom, conveyancing law firms are benefiting, say the researchers. Firms at the top of the market completed more than 3,500 transactions during the quarter. That was a rise of 17 per cent over the first quarter of this year. More impressively, the most recent transaction rate was more than 40 per cent above last year’s second-quarter rate.

The report pointed to a slight rise over the last year in the number of solicitors’ practices offering residential conveyancing services – up from 4,177 to 4,281

Buy to Let investors to pay income tax rather than CGT

Ministers’ ‘back door’ amendments penalise buy-to-let investors 

Ministers have sneaked amendments to proposed legislation on buy-to-let properties through the back door, lawyers’ leaders complained yesterday.

They claim that the move will create uncertainty as investors will be forced to pay income tax rather than a capital gains tax on investment properties.

Law Society chiefs said that significant amendments to the Finance Bill were “slipped in at committee stage” and that doing so “set a disturbing precedent of avoiding proper consultation and scrutiny”. Catherine Dixon, the society’s chief executive, complained: “By introducing a significant change in this way, the government is denying the public the chance to consider and comment on these proposals.

“The way these changes were introduced, in particular without consultation on the draft legislation before it was added to the bill at such a late stage, starts to feel like legislation by stealth.”

In comments to the government on the Finance Bill’s land transactions clauses the society said: “The average buy-to-let investor will have assumed that it will be taxed at capital gains tax rates on ultimate disposal of the property.

“If the government’s intention were to change this, then the society’s view is that this should have been subject to proper consultation on the principle, policy and the draft legislation. If the government’s intention is not to change this, then the society considers that the terms of the legislation should be amended to reflect that.”

SRA fines ABS £7,500 plus costs for emails made up from client

Currently, the SRA has the power to fine firms and individuals up to a maximum of £2,000, with any regulatory breach that requires a higher penalty sent to the Solicitors Disciplinary Tribunal.

The limit on fines for ABSs is currently £50m for individuals and £250m for firms.

A decision published on the SRA’s website states that Borley worked in the property department at Morecrofts, Liverpool, between June 2009 and November 2014 when the firm reported him to the SRA.

During his employment, Borley was found to have created two emails which were purportedly from a client.

‘These emails had the potential to cause loss to this client as they purported to give instructions to the firm to use part of the funds held for this client to settle sums due on other matters that were unconnected with this client,’ the decision states.

‘It was found that Mr Borley took steps to conceal his actions and that his conduct misled the firm’s finance partner.’

’It was found that Mr Borley’s conduct was dishonest and that his actions also breached principles 2 and 6 of the SRA principles. Borley was given a written rebuke and ordered to pay a financial penalty of £7,500. He was also ordered to pay the SRA’s costs of £1,350 in investigating the matter. The decision states that Borley’s current practising details are unknown.

The SRA made a section 43 order (control of non-qualified staff), saying it would be undesirable for Borley to be involved in a legal practice in any of the ways described in its decision, except in accordance with the regulator’s permission.

Paul Wilkinson joins as MD

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Paul Wilkinson has joined Audit Compliance Limited as Managing Director and has over 20 years experience assisting Legal practices to manage their business and to maintain quality standards and compliance with the Solicitors Regulation Authority’s (SRA) Code of Conduct 2011 , Outcome Focussed Regulation (OFR) and the SRA Accounts Rules (SAR).

Paul is Managing Director of Audit Compliance Ltd       acl-logo

Audit Compliance prepare firms for Quality and Compliance Audits for the Law Society’s Lexcel Accreditation,  Conveyancing Quality Scheme [CQS] and Wills and Inheritance Quality Scheme [WIQS] and the Legal Aid Agency’s [LAA] Specialist Quality Mark [SQM].

Audit Compliance have a complete Office Procedures Manual with law firm’s policies and procedures and forms which has been successfully adopted and audited by firms accredited with the Law Society’s Lexcel 6.0, CQS and WIQS including the Core Practice Management Standard, LawNet Quality Standard, ISO 9001:2015 Quality Management System and SQM. the SRA Risk Index, the EU Consumer ADR Directive and the Legal Ombudsman’s Complaints Handling requirements [LeO].

adrg-logoPaul is an ADRg Accredited mediator in Civil and Commercial Mediation


Lecturer on Mediation at University of West London LLM International Investment and Arbitration Law.


Trainer and Lecturer in Anti Money Laundering, Complaints Handling, Compliance, Costs, Practice Management and Regulatory Affairs and provider of ‘in house’ training for Continuing Competence.

Provider of Compliance Officer Legal Practice [COLP] and Compliance Officer Finance Administration  [COFA] compliance training for both start-up and existing law firms and for the Middlesex Law Society.

Specialist Training and guidance in preparing for certification to ISO 9001:2015 Quality Management System and the new BS 76000 Human resource-Valuing people-Management system.

Contact :

Consulting : Paul Wilkinson Consulting



HM Land Registry ‘Private and Confidential’ changes

As of 30th August 2016, Land Registry will be changing the way they manage post labelled “Private & Confidential”.

Postal correspondence relating to applications that feature the labels “Private”, “Confidential” or “Private & confidential” will either be returned to the sender or be put through an inspection process. This may therefore greatly affect the priority of any application and it will not be deemed as received under rule 15 of the Land Registry Registration Rules 2003.

The policies of Land Registry relating to “Private & confidential” post state that:

  • under sections 66 and 67 of the Land Registration Act 2002, any person may inspect and make copies of, or apply for an official copy of, any document referred to in the register or otherwise kept by the registrar which relates to an application to him
  • other correspondence not relating to applications may be subject to access requests under the Freedom of Information Act 2000
  • in the interest of natural justice, and pursuant to section 73(5) of the Land Registration Act 2002, Land Registry is obliged to share documents, including correspondence, when there is a dispute.

The amended Direction under section 100(4) of the Land Registry Act 2002 features details of these new procedures and will come into effect on 30th August. This will replace a previous version from 12th April 2016.

SDT should not have proceeded against conveyancing solicitors

The present SDT rejected the SRA’s core contention that there were individual and cumulative signs of potential fraud which should have been obvious to a conveyancer of Ms Egoh’s experience.

“At first sight there was a considerable array of unusual features in this matter and the [SRA] relied on their cumulative effect…

“However having examined the factors based on all the evidence which was now before it… the tribunal did not find it proved on the evidence to the required standard that [Ms Egoh] had facilitated or acquiesced in a conveyancing transaction that bore the hallmarks of fraud and accordingly the associated allegation that she failed to act with integrity and/or acted in a way likely to undermine the public trust fell away.

“By way of example, the text of the undertaking given by [Ms Egoh] looked less than candid: but on inspection it was simply the document that she was asked to sign.

“The actions of Mr M, the solicitor who had sent the mortgage money without any of the actions a conveyancing solicitor would expect of the solicitor to a mortgage lender in such a matter, and who then on request simply removed the search supposed to protect those mortgage advances (and that it was the wrong search anyway), were so utterly extraordinary that no solicitor could be expected to contemplate the possibility that the moneys were actually mortgage advances.”

The tribunal said it “entirely understood” the SRA’s initial suspicions about the two solicitors, but continued: “However, it considered the actions of Mr M were so extraordinary that it was entirely understandable that the [Ms Egoh] would not realise that there was a problem.

“She was a transactional lawyer trying to get through a transaction. The tribunal considered that once Mr M’s case was determined, it was clear what he had done: there was then no reason [for the SRA] to proceed with the other allegations.”

The SDT also rejected the allegation that Ms Egoh had not co-operated with the SRA.

The pair were, however, found guilty of a “technical breach” of the accounts rules because the payments were improper as they were from monies which as a matter of fact did not belong to the firm’s clients, and they admitted that they allowed their client account to be used as a banking facility.

Sanctioning them, the SDT said Ms Egoh had undertaken numerous transactions “without difficulty or complaint or sanction”, while Mr Khalique had “an unblemished record and was not alleged to be personally responsible for the actions in question”.

Law Society welcomes LSB review of risks of switching regulator

Law Society welcomes LSB review of risks of switching regulator

5 August 2016

The Legal Services Board (LSB) has announced that it will be conducting research to assess the risks for clients if firms switch regulator, and whether there are unintended consequences of this practice.

This announcement follows warnings from the Law Society and other stakeholders of the risks to client protections inherent in proposals put forward by the Solicitors Regulation Authority (SRA) on removing barriers to solicitors’ firms switching regulator.

Law Society chief executive Catherine Dixon commented:

‘The Law Society’s response to the SRA’s consultation on switching regulators highlighted the disparity in client protections required by the different legal services regulators, and therefore the risk to vital client protections. We therefore welcome the LSB’s research to examine these issues in depth.

‘The LSB will also be looking into a number of other concerns that we raised about the mechanics of switching regulators, such as the extent to which new regulators scrutinise an individual’s or firm’s regulatory history. We will be watching the progress of this review with great interest.’

Reasons Land Registry reject applications

“Land Registry only rejects applications that have no prospect of being completed as they stand and also in cases where identity confirmation is required and has not been given or is incomplete and where a previously cancelled application has been re-lodged without the reasons for cancellation having been addressed.

“Very few applications are rejected out of the overall intake of registration applications received. About 0.85% of applications are rejected currently. That works out to approximately 165 applications every working day.

“From 1st July 2015 to 30th June 2016, Land Registry rejected a total of 41,850 applications. The following table shows a breakdown of the reasons for rejection based on the rejection letter templates used.”

Defective application, 23,090
Identity information not supplied for all parties by conveyancer, 10,087
Defective application fees retained can be credited when resubmitted, 4,841
eDRS – multi title application – incorrect or missing title, 802
Defective application – Prescribed Clauses Lease, 498
UN1 or AN1 lodged but interest can only be protected by a restriction, 426
Fee not paid after telephone request, 413
Identity information not supplied for all parties by layperson, 408
No evidence of identity lodged by layperson, 390
RX4 (withdrawal) lodged instead of RX3 (cancellation), 198
Rejected application – notification to applicant, 94
Identity information on application form not completed by layperson, 90
Transfer Poor Or No Plan, 88
Rejected application – notification to registered proprietor 81
Section B of identity form not completed by conveyancer or citizen, 78
No evidence of identity lodged by conveyancer, 56
Defective application – Prescribed clauses lease, variation/incorporated document, 55
Forms – old version used after 9 Feb 2009, 23
New forms – wrong forms used, 20
Rejection letter – commonhold, 20
Caution application lodged after 13 October 2003, 19
Application or enquiry received on or after 13/10/2003, 15
EX1 application rejected – unsatisfactory grounds for exemption, 15
Plan based on OS map preferred, 11
Forms – old version of AP1, FR1 or DS2 used after 9 November 2008, 10
Rejected application – notification to charge, 10
Rejected application –– to person entitled to be notified, 4
Rejected application – notification to superior lessor, 3
Identity information on application form not completed by conveyancer, 2
Telecommunication agreement not being registered or noted as a lease, 2
Forms – Bulk application – old version of AP1, FR1 or DS2 used after 9 Nov 2008, 1



SRA responds to ABS consultation

Paul Philip, SRA Chief Executive, said: “We welcome the Ministry of Justice’s proposals to remove unnecessary restrictions for ABS wanting to enter the legal services market. All the evidence suggests ABS are good for competition and improving choice, while posing no greater regulatory risk. Research shows that they are more innovative than traditional firms, being up to 15 per cent more likely to introduce a new legal service.

“With the backdrop of the uncertainty of Brexit, these type of reforms are vital to make sure our legal services market is as open and competitive as possible. Stripping back unnecessary bureaucracy will not only help our economy grow and attract international investment, but also benefit the public through making legal services more accessible and affordable.

“By moving away from an onerous one-size-fits-all approach to approving ABS, we can be much more targeted. This will help us encourage innovation, while still making sure the public is protected.”