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one of the modules that concerned the tribunal was still provided – the Financial Crime module – and that has now been withdrawn.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.”
We are conducting a survey of your accreditation and quality standards and would be delighted if you can enter the Compliance Survey
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.