CMA report on Accreditation

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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. 

HMRC confirm dates for VAT on CON29 searches

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HMRC have confirmed dates for VAT being applicable on CON29 searches.

An HMRC spokesperson has said:

“We are creating a level playing field for all conveyancers. Solicitors will be able to claim back the VAT payable in the normal way.

“We are in ongoing discussions with stakeholders and will address any questions they may have.”

It has been confirmed that the change is to be implemented by local authorities from 1st January 2017. However, should any local authorities foresee delays in implementation, they are to inform the HMRC – with the final deadline being no later than 31st March 2017.

VAT on local authority searches

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The Law Society has issued new guidance for conveyancers amid continuing uncertainty over the imposition of VAT on local authority searches.

Though HMRC has still to provide any formal confirmation, Chancery Lane understands that although the change did take effect on 1 January, there will be a ‘long stop’ date of 31 March this year for councils who are not ready.

It remains unclear whether councils that do not begin charging VAT from 1 January will now wait until 31 March. It could mean there will be a ‘trickle’ of councils who begin charging on different dates in between.

Such ‘piecemeal implementation’ would be far from ideal, said the Society, which has urged solicitors to look at the local land charges sections of council websites to establish when their authority is proposing to implement the changes.

Society president Robert Bourns said: ‘It is extraordinary that we have not received substantive and direct responses to our letters to HMRC about this issue, as we could have provided better information to our members and this may have assisted in a smooth transition to a new regime.

‘We will be providing more information to solicitors as it becomes available.’

Council searches provide information for buyers and lenders about matters including planning decisions, building regulation consents, highway information, road schemes and public footpaths.

They are carried out on the Law Society’s CON29 and CON29O forms, providing standardised questions to make conveyancing searches quicker and more efficient for both councils and property buyers.

Catherine Dixon resigns from CEO at The Law Society

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Law Society chief executive Catherine Dixon said: “It is my firm belief that the Law Society will not be perceived by its members and other key stakeholders to have changed and to be representative of solicitors and the diverse solicitor profession, without changing the way it is governed.

“The Law Society’s governance is costly (over £2m per annum not taking into account my time or my executive’s and staff time in reporting), bureaucratic and does not reflect how successful modern organisations, including membership organisations, operate.”

She said she found it “impossible” to navigate the complex and often overlapping boards and committees in a way which best served the organisation and its members.

“It had taken council nearly a year to get to a point where a decision could have been made to start making changes to governance.

“As any implementation of a main board will not now start until further work has been undertaken on council seats, as optimistic as I am, I fail to see how this work can be completed in a timely way – particularly taking into account the external pressures on the Law Society to demonstrate effective and modern governance arrangements, which should not be underestimated.

“I truly believe that the longer-term future of the organisation rests with it having in place an effective governance structure. It is competing against hostile organisations which already have agile and effective governance structures in place.

“If the external environment was not so hostile, the Law Society could take its time to review its governance and make any changes at its own pace. However, the organisation does not have this luxury.

“I want to be part of an organisation with a board and council which works effectively and collaboratively with its executive. I want to take responsibility as CEO and be accountable. For me this means being part of a board which has the expertise, experience and skill sets to oversee a complex multi-million pound organisation.

“I believe that boards should make collective decisions which their senior executive are party to and which the board stands behind and is accountable for. I don’t see the role of a CEO as merely attending and reporting to a board. If this is how council sees the role of the Law Society CEO, (which the agreed main board structure suggests it does), then unfortunately this is not me.

“It is for this reason and because of the failure to agree to progress with the creation of a main board that I have decided to leave the Law Society. I cannot in good conscience continue to act as the CEO of an organisation when I do not support the decision by council not to rigorously pursue governance reform in what I believe is in the best interests of the profession and the organisation.

“Therefore, just like any accountable board member who does not support a critical decision of that board, I feel that I am left with no option but to resign.”

Law Society president Robert Bourns said: “We are extremely grateful to Catherine for her tireless and effective work for the Law Society as chief executive. Her achievements in the last two years are numerous and include delivering a new strategy and three year plan, building our influence and thought leadership and promoting member focus at the heart of our work.

“I note Catherine’s comments on the pace of the governance review. It is important that we press on with changes in order to take the organisation and the profession forward. I aim to use the rest of my presidency to help drive the next stage of the review and propose further changes.

“We will be announcing plans for the recruitment of a new CEO in due course and in the meantime will focus with Catherine on the substantial work in progress.”

SPG hits back at Hazelwood’s figures

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The Sole Practitioners Group said the SRA data did not provide a breakdown between sole practitioners who are incorporated and those who are not. Over the five year period, according to SRA data, the number of incorporated law firms has actually gone up from 2,583 (24% of the total) to 4,225 (41%) – a rise of 63%.

SPG chair Kemi Mosaku reported that the organisation has had an increase lawyers wanting to set up their own sole practices, and work with the SRA has successfully minimised the red tape involved.

She added: ‘For a lawyer who is an entrepreneur setting up in sole practice has never been easier and is more attractive than switching from employment in a law firm to being a consultant in a so called virtual law firm where they cannot build their own brand and are not in charge of their own destiny.’

Tony Roe (pictured), a member of the Law Society’s Family Section and Small Firms’ Division committee, said Hazlewoods’ figures were ‘entirely out of context’.

‘I am not sure how useful it is to be presented with this sort of press release, particularly one which does not set out all its sources or data upon which it might rely,’ said Roe. ‘Many SPs are converting to limited companies or setting up as them in the first place – often on the advice of accountants.’

Land Registry unveils expansion plans

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The chairman of the Conveyancing Association has called on the government to create a new portal to help fill the void left by the collapse of Veyo.

Eddie Goldsmith said conveyancing consumers suffered from a “lack of knowledge” about the process and he would like to see a “government initiative” to create an information portal.

Speaking to Legal Futures at last week’s Conveyancing Conference, he said the portal could include “signposting to the best way to sell property” and “education on the all methods of home moving”.

Stressing that the Conveyancing Association did not yet have detailed plans for a portal but was interested in all the options, Mr Goldsmith said the government portal could direct consumers to a further portal, designed by the conveyancing industry.

“We need to create a trusted e-community for conveyancing, which would sit on top of all existing case management systems and integrate with them,” he said.

He said that, unlike Veyo, the new portal would rely on “buy-in” from all the stakeholders involved in conveyancing, including estate lenders, lenders, brokers and the Land Registry.

The Law Society and Indian technology giant Mastek pulled the plug on Veyo this time last year, costing the society £7m. Veyo attempted to combine a case management system with ‘chain view’, which would allow all the parties involved in a conveyancing transaction to see the progress of a chain

“I’m still not sure what Veyo was intended to be,” Mr Goldsmith said. “It seemed to be another case management system for conveyancing – one that was neither needed nor asked for.”

However, he said there was still a need for a portal which offered “greater transparency” on the progress of a chain.

Later at a panel session, Graham Farrant, chief executive of the Land Registry said that following the government’s decision in the Autumn Statement not to proceed with privatisation, there had been a recognition that the service “might actually be quite important”.

Mr Farrant went on: “If you want to build a million new homes, we might be able to help identify some new sites. Actually, the best way to do that is having a complete land register.”

He said the government had asked the Land Registry to try and register the remaining 17% of unregistered land by 2020, and asked it to look at ways of improving the conveyancing process.

Mr Farrant said the intention was that the Land Registry would work with other government bodies, such as the Ministry of Justice, and the industry on ways to make conveyancing, faster, cheaper and simpler.

“Leasehold is the number one issue. You all know that if there’s leasehold in a chain, it can probably add five weeks to it.”

Mr Farrant said some form of register of leasehold interests might help, along with limiting the use of restrictions between landlord and tenant. In the meantime, he said the Land Registry was forging ahead with its plans for a central portal for local land charges.

Mr Farrant said work with the first local authorities on the project would begin next spring, heralding the start of what would probably be a “five-year roll-out”. He described centralising land charges as a “big job”, involving 326 local authorities and 30 million records.

The chief executive added that his ultimate goal was a fully digital register, including mortgages and local authority information.

“What a difference that would make to local authorities, estate agents and conveyancers. Your practices are heavily digitised, but our interface is not digital enough, although we’ve been making some big strides. The world is changing, the profession is changing and I think we’re nearly ready.”

Office for Legal Complaints seek new head

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A new head of the body that handles complaints about lawyers will be in place by the end of March next year, the profession’s umbrella watchdog said on Friday.

The Legal Services Board kicked off a recruitment process to replace Steve Green, who finishes his five-year term as chairman of the Office for Legal Complaints on March 31 next year.

The office oversees the chief legal ombudsman, a post that has been racked by controversy. A year ago Adam Sampson was embroiled in a row with the Ministry of Justice over the circumstances of his departure. Sampson forced the Office for Legal Complaints to retract a statement that he had been sacked over irregularities over his expenses, and said that he had in fact resigned and served his notice period

National Cyber Security Strategy

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Chancellor Philip Hammond released plans for a £1.9 billion cyber security Government strategy.

Key areas that all firms should be aware of include:

  • Vulnerabilities
  • Roles and responsibilities of businesses and organisations
  • The National Cyber Security Centre (NCSC)
  • Defend – plans to defend UK organisations
  • Deter – plans to enhance deterrence
  • Develop – plans to strengthen skills, training and technology

It is the responsibility as a business within a particularly vulnerable sector to keep abreast of developments and to be aware of the strategy, as well as ways you can implement any changes effectively.

To read the full National Cyber Security Strategy document, please click here.

SQE consultation opens round 2 from SRA

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Paul Philip, SRA Chief Executive, said: “We think there is a strong case for the SQE and this consultation spells it out in more detail. We have taken on board a wide range of views and gathered more evidence, and I would like to thank the many organisations that have helped us to refine and develop our proposals.

“Ultimately, we want to make sure that the solicitors of the future have the high standards and skills needed to compete both domestically and in a global market. And we know that, internationally, an entrance examination is common practice in other major jurisdictions, from New York to New Zealand. We believe the SQE will enable us to be sure that all solicitors have the competences required to do the job.

“I would encourage everyone to let us have their views about the proposals set out in the consultation and to take the opportunity to influence the future qualification requirements for solicitors.”

At the same time as publishing its latest consultation on the SQE, the SRA is publishing a summary and analysis of responses from the first consultation, together with copies of the individual responses it received.

The consultation runs until 9 January 2017 and can be found online at: www.sra.org.uk/consultations

Bar Standards Board let equality and diversity data slip

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Bar regulators have allowed equality and diversity initiatives to slip and have been told to act immediately to restore them, the watchdog’s independent observer has said.

Isobel Leaviss, who has the role of providing independent oversight of the Bar Standards Board, said that she was “surprised” not to have found publicly available equality and diversity data for various professional conduct elements at the regulator.

Up to date recording and monitoring of equality and diversity data for the committee and board members at the BSB responsible for professional conduct “was not in place,” said Leaviss in a reportreleased on Friday.

She went on to say that “equality and diversity induction training for new members appeared to have lapsed”. Leaviss called on the regulator to remedy both shortfalls.

The BSB said that it had accepted the observer’s recommendations. Vanessa Davies, the board’s director, welcomed the report’s findings, saying that Leaviss’s “contributions ensure our complaints-handling process continues to be refined and improved, particularly in the context of being a risk-based regulator”.