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Much has been said about the Law Society’s Conveyancing Quality Scheme (CQS) on the comment forums across the great plains of the Internet.
Many would argue that the CQS “does not make me a good lawyer” and that “It won’t have any effect on reducing my PII premium.”
The first comment demonstrates a one dimensional view as to what a quality standard is intended to achieve. Whilst it is of paramount importance to be a good lawyer, robust risk management and compliance is also essential, and working to the CQS core practice management standard will mean a big step in the right direction.
The second comment is now very much up for debate.
A point which is rarely mentioned is arguably the main cornerstone of quality schemes such as the CQS and Lexcel – robust Risk Management.
Is this not something that the PI Insurers are looking to focus on when assessing the risk profile of a practice for their annual Professional Indemnity Insurance quote?
From my own experience I know that there has been a large influx of practices wanting to obtain CQS membership in order to stay on lender panels. The news last week that as of 29th August all CQS member practices will be automatically put on to HSBC’s conveyancing panel highlights this point. As HSBC holds around 10% of the new-sales mortgage market this is understandable and I suspect that other lender panels will move in the same direction. With changes like this on the horizon it would be fair to argue that those practices that have already applied for CQS membership or are in the process of doing so are ahead of the game.
Yet we must not think of the CQS as solely helping practices on to lender panels or maintaining membership on them. Practices which work within the scheme’s guidelines, subsequently realise that by having structured financial and supervisory policies and procedures in place, that they have a useful tool in both practice and risk management. How many Partners, Directors or Managers with a busy schedule, can genuinely hold their hands up and say that they know exactly what all of their staff, and in particular fee earners are doing with their time and how well their time is being used? Simple tasks such as a structured file review procedure is just one thing that helps the Managers of a practice to build a bigger picture of where risk can develop. Procedures such as this can help quash any risks before complaints, negligence actions and inevitably, claims, arise.
At the end of the day it is these risk management processes and procedures that insurers require practices to have so that they can offer insurance at favourable rates.
Recently, AON has been signed up by the Law Society to offer insurance to CQS members and Lexcel accredited practices.
Additionally, the introduction of Axis Speciality plc is good news for sole practitioners and 2-3 Partner firms who have predominantly struggled in recent years obtaining PII. Prime Professions who are the broker for Axis have already commented that robust risk management controls will work in their favour when the insurer provides a quote for a PII premium.
It would be fair to argue that more change is coming for practices providing conveyancing services and also for practices more generally when taking Lexcel into account. It seems that the insurers are looking at ways to make sure that they insure practices who present the least overall risk. Lender panels like HSBC are also making sure the firms on their panel can be shown to have risk management controls in place, again to try and negate any claims or losses. It is fair to say that achieving CQS membership does not make you a good lawyer, however it is also true to say that by being a member of the CQS you have proven that you have these risk management procedures in place.
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The Law Society has issued a practice note about the risks to solicitors posed by this new legislation, which came into force on 30 September.
The SRA has urged all practices to check HM Treasury’s consolidated list of asset freeze targets, which lists designated persons subject to financial sanction under EU or UK legislation.
The practising certificate renewal period opened on Monday 2 October.
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