Law Society ruling by ASA for CQS advertising

Subject: ASA ruling on CQS


This Ruling replaces that published on 14 June 2017. The decision has been reversed, making the complaint upheld.

Ad description

A web page on the Law Society website, seen in November 2016, describing the Conveyancing Quality Scheme (CQS) accreditation, stated “All Law Society Conveyancing Quality Scheme firms go through rigorous examination and testing to demonstrate that they have a high level of knowledge, skills, experience and practice”.


The complainant, a solicitor, who understood that the requirements to join the scheme did not involve any assessment of applicants’ expertise or quality of service, challenged whether the claim was misleading and could be substantiated.


The Law Society of England and Wales (The Law Society) said that the purpose of the CQS was to provide a trusted community of solicitors within the residential conveyancing market that helped to deter fraud and improve “best practice” standards across the sector. The CQS accreditation mark acted as a recognised quality standard for residential conveyancing practices.

The Law Society stated that all practices applying for CQS accreditation were assessed by their Technical Assessment Team to ensure that they met the requirements. They provided a copy of the application form and details of the information that firms were required to submit about their staff, structure and operations, as well as how the Law Society assessed that information. They said that all accredited practices were re-assessed on an annual basis to ensure that they continued to meet the requirements. Accredited practices were also subject to further checks outside of the normal assessment timetable in instances where there was reason to believe that a firm was not compliant with the scheme rules or CQS protocol. All relevant staff within the practice were also required to carry out mandatory training modules covering key issues relevant to conveyancing solicitors. Each module was accompanied by an assessment that they were required to pass. In addition, CQS accredited firms were required to conduct conveyancing work in line with the CQS Conveyancing Protocol, and manage their practice in line with the Core Practice Management Standards and Client Services Charter.

The Law Society believed that the requirements for joining and maintaining membership of the CQS ensured that all accredited firms had a high level of knowledge, skills, expertise and practice, and that the ad was therefore not misleading.



The ad stated “All Law Society Conveyancing Quality Scheme firms go through rigorous examination and testing to demonstrate that they have a high level of knowledge, skills, experience and practice”. The ASA considered that consumers would understand that to mean that The Law Society had conducted an in-depth assessment of each firm that applied for the scheme, and verified that, as a whole, the firm had a high level of knowledge, skills and experience related to residential conveyancing, and that their conduct was of a high standard. We considered that consumers would understand that any conveyancing firm should meet basic minimum requirements in terms of the qualifications and licensing of its staff, and its compliance record. Therefore, given the reference to “rigorous examination and testing” and a “high level of knowledge, skills, experience and practice”, we considered that they would understand members of the CQS had met a standard above and beyond basic requirements.

We noted that applicants were required to provide detailed information relating to a comprehensive range of aspects of their operations. Some of this information was cross-checked with data held by third parties, including the Solicitors Regulation Authority, the Chartered Institute of Legal Executives, and the Council for Licensed Conveyancers, the Land Registry, credit agencies, the Legal Ombudsman, and banks; or verified through the submission of original documents, or public domain searches. Information independently verified in this manner included the professional qualifications of the Head of Conveyancing, Senior Responsible Officer, Managers and Qualified Conveyancers; whether the same had held a fitness to practice certificate at all times; details of any training undertaken with the Law Society; the history of complaints against a firm and any action taken in light of these; purchase and sale transaction volumes; merger history; and professional indemnity cover. In addition, the Law Society carried out criminal records and identity checks on all relevant members of staff, and a credit check on the firm. We considered that these checks were sufficient to demonstrate that listed staff members held the appropriate qualifications to undertake their work, and to identify any causes for concern in relation to the conduct and ethics of the firm or its staff. We noted that qualifications were independently verified, and this would form part the consumer understanding of “knowledge”, however we considered that consumers would assume that any conveyancing solicitor held the appropriate qualifications to allow them to carry out residential conveyancing, and so a “high level of knowledge” was likely to be understood as implying a level of knowledge that went beyond this basic requirement. The assessment team also independently verified records of training courses that had been administered by The Law Society, though we noted that this would not cover all training an individual might have undertaken.

The form also included questions about the experience and management ability of the Head of Conveyancing to run a residential conveyancing department; adherence of the practice to Core Practice Management Requirements; and the supervision of conveyancing staff. We considered that consumers would likely understand that a firm with a “high level of knowledge, skills [and] experience” would have independently proven to the assessment team that it reached a high standard in these areas.

The sum total of information provided in the form was assessed by the Technical Assessment team and individual elements were assimilated onto a scorecard to determine the suitability of the practice and the individuals within it to obtain CQS accreditation. We noted that between 2014 and 2016, 291 out of 293 applications had been approved.

We also noted that relevant members of staff were required to undertake training and pass multiple-choice assessments, demonstrating their knowledge of key areas of conveyancing practice, within six months of accreditation being granted. This meant that firms could be accepted into the scheme before any relevant members of staff had been trained and assessed. We noted that the training contributed toward demonstrating that staff had knowledge of a range of subjects relevant to residential conveyancing, however we considered that readers of the ad would expect that all criteria would have been met prior to accreditation being granted.

The continuing suitability of accredited firms to retain membership was re-assessed on an annual basis using the same process described above. We understood that the Law Society had the capacity to undertake more detailed investigations into complaints it received about CQS-accredited firms, including on-site visits. These would consist of physical file reviews, interviews with staff, and observation of day to day processes and procedures. In the event they considered that a firm no longer met the required criteria, they could and did revoke membership. However, we understood that independent observation of these factors was only carried out, if considered necessary, following receipt of information calling into question a firm’s adherence to CQS rules and protocols; or where concerns were identified by the assessment team at re-accreditation stage. We understood that on-site visits were not conducted prior to initial accreditation. According to figures provided by The Law Society, no more than twelve firms had been visited, and two firms had had their membership revoked, between 2012 and 2016. In the majority of years, no on-site visits had been undertaken.

While we acknowledged that firms were granted CQS accreditation on the basis of independently-verified information attesting that they met an adequate standard in terms of their competency, conduct and ability to carry out conveyancing transactions, we considered that this amounted to the minimum level of “knowledge, skills, experience and practice” that consumers would expect from a firm that was licensed to undertake a major legal transaction on their behalf. In that context, and in the absence of any routine, independent checks to assess the relative degree of “knowledge, skills [and] experience” that the firm possessed prior to membership being granted, we considered that the ad exaggerated the level of knowledge, skills and experience possessed by a CQS-accredited firm and its staff, and the extent of the checks that a firm had to undergo to receive its accreditation. We concluded that the claim “All Law Society Conveyancing Quality Scheme firms go through rigorous examination and testing to demonstrate that they have a high level of knowledge, skills, experience and practice”, as consumers were likely to understand it, had not been substantiated and was therefore misleading.

The ad breached CAP Code (Edition 12) rules 3.1 (Misleading advertising) and 3.7 (Substantiation).


The ad must not appear again in the form complained about. We told the Law Society to ensure that their advertising did not describe CQS-accredited firms in a manner that misleadingly exaggerated the membership requirements of the CQS.

CAP Code (Edition 12)

3.1 3.7


Law Firm Growth and Compliance Seminar

PIE and PSG to merge

Property Information Exchange Ltd (PIE), creator of the market-leading brands poweredbypie and Brighter Law, has merged with PSG Connect Ltd (PSG) to create the number one provider of legal services for the residential conveyancing industry.

David Brown, CEO of PIE commented on the merger, “PSG are a great fit for our business; they share our ethos, passion and dedication to empower law firms and help them grow within the marketplace.  We have always looked at PSG as the market leader in terms of quality search delivery, customer support, local knowledge and presence.  We are really looking forward to the many opportunities and benefits this merger will bring to all of our clients.  It’s very exciting.”

Richard Dawson, PSG Managing Director added, “It was incredibly important to find the best fit for PSG, a company that shares our ethos and one that would support our future plans.  In David and the team at PIE we have found a like-minded partner with which to grow. PIE is a market leading provider of technology solutions for the conveyancing sector. The collaboration of the two businesses will result in a significant benefit to all our clients in terms of customer service, delivery and innovative technology”.

The combined companies will build on their shared values of customer support and excellent products to provide an unrivalled service to their clients. Bringing together the best people, the latest technology and over 30 years of experience in the industry, the merged businesses look set to lead the way in the legal services marketplace.

Law Society to pay Socrates up to £230,000 in costs

Competition Appeal Tribunal ordered the Law Society to pay Socrates Training’s costs up to a maximum of the approved budget of £230,000.

Last month, the tribunal ruled that the Law Society abused its dominant position by requiring over 3,000 law firms to buy its own fraud training in order to maintain their Conveyancing Quality Scheme (CQS) accreditation.

The consequential order said that the Law Society “shall not oblige CQS accredited firms to purchase exclusively from the Law Society mandatory training in mortgage fraud, anti-money laundering and financial crime required for CQS accreditation”.

The society has withdrawn the financial crime module, the only one still live, as a result.

The proceedings have been stayed for two months to allow the parties to seek agreement on quantum. If this fails, Socrates has until 1 September to serve points of claim on quantum and the society then 28 days to respond.

Socrates quantified damages in the claim form at £112,500, on the basis that the society’s conduct lost it the custom of 75 law firm firms that would spend some £600 each for two and a half years.

On costs, the tribunal ordered Chancery Lane to pay Socrates’ costs of mediation, to be assessed if not agreed, up to £4,000 plus the company’s share of the mediator’s fees, and also its costs of the proceedings up to a maximum of £230,000, to be assessed on the standard basis if not agreed.

The society’s budget had been capped at £402,500, though it had originally sought £637,000.


Socrates v The Law Society at Competition Tribunal Ruling

Conveyancing training revisited after competition tribunal ruling

26 May 2017

The Law Society of England and Wales today announced it will look again at the training elements of its Conveyancing Quality Scheme (CQS) in response to a ruling by the Competition Appeal Tribunal.

The tribunal found that for a short period  – from April 2015 – the Law Society should have permitted third party trainers to offer some of the modules for the scheme. CQS has been running since 2010.

Only one of the modules that concerned the tribunal was still provided  – the Financial Crime module – and that has now been withdrawn.

Law Society president Robert Bourns said: “For the vast bulk of the time CQS training has been available it has been compliant with competition rules. I am certain that in setting CQS up, the Law Society acted in good faith and in the public interest.

“The purpose of CQS – and its effect – was to ensure greater consumer choice in terms of practitioners available to undertake this important work.

“We note the decision and have and will take steps to avoid similar issues in the future.

“Purchasing a house is the biggest investment most people make, and they need to feel confidence in the process, as do lenders. That was always our motivation – CQS has never been about profit.

“We are grateful to the tribunal for their guidance on changes to CQS that they make in their ruling and we will be looking at their comments as a matter of priority in the coming days.”

Socrates v The Law Society Judgment

Compliance Survey

We are conducting a survey of your accreditation and quality standards and would be delighted if you can enter the Compliance Survey

Dreamvar (UK) Ltd v Mishcon de Reya

I think that it is fair to say that many conveyancers have been shocked by the decision in Dreamvar (UK) Ltd v Mishcon de Reya (see Today’s Conveyancer January 30th 2017). But it is consistent with previous court decisions and follows basic principles. The buyer’s solicitors were held liable to a buyer client for breach of trust in paying the purchase price over to solicitors acting for a seller who was not the owner of the property but a fraudster.

But it is not new law to hold that a buyer’s conveyancer holds the purchase money on trust; it is not the conveyancer’s money after all. It is not new law to say that the terms of that trust are that it can only be used for the purchase of the property; why else was it given to the conveyancers other than to fund the purchase? It is not new law to hold that if a trustee uses trust funds for an unauthorised purpose, that trustee is liable for the loss irrespective of fault.

But there is protection; the Trustee Act 1925, section 61, states: If it appears to the court that a trustee, … is or may be personally liable for any breach of trust, … but has acted honestly and reasonably, and ought fairly to be excused for the breach of trust …, then the court may relieve him either wholly or partly from personal liability for the same.

Note the three conditions for relief. Yes, the trustee must have acted honestly and reasonably, but that is not enough; it is also necessary to show that he/she ‘ought fairly to be excused.’ That was the issue in this case.

To quote the Judge:

… it is common ground that it is insured for events such as this, and that its insurance cover is sufficient to cover in full the loss suffered, should it not be excused from liability. In terms of balancing the relative effects or consequences of the breach of trust, it is apparent that MdR (with or without insurance) is far better able to meet or absorb it than Dreamvar. While, as I have held, it was not unreasonable for MdR not to have advised Dreamvar about the risk of fraud, or to have sought greater protection for Dreamvar against that risk (such as further undertakings), it is also not irrelevant that MdR was necessarily far better placed to consider, and as far as possible achieve (a matter not in the event tested), greater protection for Dreamvar against the risk which in fact occurred….. 

For these reasons, I conclude that MdR ought not fairly to be excused for the breach of trust 

This has been the most controversial aspect of the case – the conveyancer is insured, therefore they should carry the can.

But the question has to be asked, who should fairly bear the loss? How would YOU have decided that very difficult question? In most cases there are four innocent parties: the real owner of the property; the seller’s conveyancers; the buyer’s conveyancers; the buyer himself/herself (and sometimes the buyer’s lender as well). Which of these innocents should carry the loss?

Do we wish to accept the view that it should be the buyer personally who accepts the risk? If not the buyer, it either has to be the buyer’s or the seller’s conveyancers. But in the case, all claims against the seller’s solicitors failed.

Note that the judge held that it was not unreasonable for Mishcon’s not to ask for confirmation from the seller’s solicitors as to the identity of their client but should we all, when acting for a buyer, start asking for confirmation that the person purporting to sell a property really is the seller?

But if you were so asked, what would your reply be? If you do so certify then you will be the one that foots the bill if it all goes wrong. And of course, we all act for both buyers and sellers anyway.

Insurance against fraud is also available to buyers. One international title insurer has told me that they could sell an insurance policy to protect a buyer against fraud for about £100 plus tax. Not a lot for a client to pay for freedom from worry – but we all know clients are reluctant to buy any kind of policy. But we could we limit our retainer to disclaim liability for fraud to encourage use of the policy. But unless recommended by the Law Society and the Council for Licensed Conveyancers, it would be commercially difficult.

But unless we start using dedicated policies like this it seems likely that either seller or buyer’s conveyancers will continue to bear the risk of fraud.

As to which, I can do no better than set out the view of another judge. In Patel v Freddy’s Limited [2017] EWHC 73 (Ch ) Tribunal Judge Elizabeth Cooke, sitting as a Deputy High Court Judge set out her view of the position with regard to fraudsters. Her view was:

… it is the task of the vendor’s solicitor in a conveyancing transaction to check the identity of his or her client, establishing not only that the vendor’s name is what the vendor says it is but also that the vendor really is the owner of the property. So it was for Mr Cuthbert first to carry out the “Know Your Client” procedure required by the money-laundering legislation; hence the obtaining of the passport and a utility bill to ascertain that this client really was an Ashok Patel who lived in Barnet. But it was also for Mr Cuthbert to ascertain that this was the Ashok Patel who was the registered proprietor of Sai Villa. …The important point is that this is the vendor’s solicitor’s duty, because he is the one with access to the client and to his client’s documents… but it is not for the purchaser’s solicitor to duplicate the actual checking of the vendor’s identity, nor to check that the vendor’s solicitor has done so.

In the writer’s opinion, there is much force in such views. Note that both judges state that there is no obligation on a buyer’s conveyancer to check that the seller’s conveyancer has carried out such steps.

But we are badly in need of advice from the Law Society with regard to all of this. Time to stand up Law Society and say something.

Electronic signatures for LR forms

Solicitors could no longer be asked to witness signatures on Land Registry forms if proposals for electronic signatures are adopted.

In a long-awaited step towards electronic conveyancing, the registry has opened a consultation on amending rules to allow documents to be signed online by the government’s Gov.UK.Verify process. Law Society president Robert Bourns described the move as a ‘positive step’, saying the Society had backed the use of electronic signatures last year with the publication of a practice note for commercial transactions.

‘We are considering the proposals in the rules consultation, and awaiting further important details on exactly how the proposed system will work,’ he said. ‘Our focus will be to ensure that they are practical and effective, and most importantly provide appropriate identity and security measures.’

CQS and HSBC conveyancing threshold raised for SPs from £150k to £350k

Nearly five years after the Law Society successfully campaigned for HSBC to expand its conveyancing panel to include all firms accredited under Chancery Lane’s specialist kitemark, the High Street lender has raised the mortgage threshold for sole practitioners who can act for the bank and borrowers.

HSBC has announced that it will increase the loan threshold imposed on sole practitioners registered under the Society’s Conveyancing Quality Scheme (CQS) from £150,000 to £350,000.

HSBC’s head of secured lending, Tracie Pearce, said the bank’s decision would provider ‘greater choice and flexibility’ for customers and cut homebuying costs.

The Society welcomed the change, which came into force today. Robert Bourns, president, said: ‘The CQS accreditation marks a solicitor’s commitment to maintaining the highest standard of skill and service, and the value solicitors bring to an often complex deal.

‘HSBC’s decision shows that those dealing with conveyancers know that when a solicitor is CQS-accredited they can be relied upon to be at the top of their game. It is a welcome change that will benefit both solicitors and their clients.’

In 2012 HSBC agreed to amend its conveyancing approach to enable all CQS-accredited solicitors to act for HSBC and its mortgage customers, following a four-month campaign by the Society. CQS-accredited sole practitioners were able to handle all cases with mortgage values up to £150,000.

Previously only firms on HSBC’s managed panel of conveyancers were able to act for the borrower and lender, with all other firms able to act for the borrower only.

Under HSBC’s conveyancing system, those applying for a HSBC mortgage have three options when seeking a solicitor or licensed conveyancer. They can choose:

  • A solicitor firm or licensed conveyancer on its managed panel;
  • A CQS-accredited solicitor firm or licensed conveyancer who can act for the homebuyer and the lender; or
  • A solicitor or licensed conveyancer who is able to act for the mortgagee but not HSBC, which would cost £295 including VAT in addition to the chosen firm’s fees.

The Sole Practitioners Group was ‘delighted’ with HSBC’s announcement. Chair Kemi Mosaku said: ‘Everyone should have access to independent legal advice from a solicitor of their choice and, of course, we welcome any initiative on the part of lenders which widens consumer choice.

‘Obtaining CQS accreditation requires solicitors to have stringent procedures in place and the public and indeed banks can thus rest assured that they are getting advice from experts.’

Mosaku urged other lenders to follow suit by increasing mortgage lending limits in the same way.

CMA report on Accreditation

Accreditation schemes 

Accreditation schemes or quality marks have been developed by providers as a way of demonstrating that specific quality standards have been met or that the provider has specialist expertise. The majority of quality marks focus on specific practice areas but they commonly aim to signal that providers who have the accreditation are operating at a higher standard than others. Providers who are members of these schemes have made an active decision to participate. 

The Law Society suggests that these accreditation schemes: ‘promote high standards in legal service provision and ensure that clients are able to easily identify legal practitioners and firms with proven competency in specific areas of law’.

However, the LSCP has previously reported that there is minimal awareness of quality marks and consumers make little use of them. Our qualitative research with consumers confirmed this, finding that: ‘Overall, consumers had little awareness and knowledge of formal quality indicators such as quality mark schemes. This is reflected in the fact that no such indicators were referenced by consumers’.

The latest consumer research by the LSB and the Law Society also showed that when choosing a main adviser, consumers only looked for services which had quality marks or other standards for 4% of issues.

Further, there are questions about whether such schemes really provide a signal of ‘better’ quality. The SRA notes that: ‘while these schemes cost providers money to join and an annual fee, we are not aware of any evidence that they improve the quality of service. There is also the risk that they can confuse consumers or provide unwarranted assurance’.

The CLC elaborates on this by explaining that: ‘Such kitemarks as exist attest to certain inputs by the firms in question in terms of business processes but do not measure or attest to quality of outputs’.

Despite the limited awareness from consumers, some quality marks may benefit consumers indirectly, as they are used by intermediaries who filter providers on their behalf. In principle, the use of quality marks by intermediaries can be beneficial because it can drive higher quality standards. However, there is the possibility that the use of an accreditation scheme as a requirement for access to a particular part of the sector can create an issue for competition, for example where the scheme is only open to one type of provider. The CLC raised this concern in relation to the Conveyancing Quality Scheme (CQS) which is managed by the Law Society for solicitors. However, in practice this has not been an issue. This is because, although solicitor firms are often required to hold CQS membership to access lender panels, CLC-regulated firms are not. 

The CLC also has concerns about the quasi-regulation that intermediaries can introduce through their requirements for quality and questioned whether the costs to providers are matched by the benefits, given their existing regulatory obligations.