Miller hosted its first annual Council of Licenced Conveyancers (CLC) risk and compliance conference on 25 January 2024, welcoming an array of expert speakers and CLC members.
Celebrating its long association with the CLC, opening the show was Stephen Ward, Director of Strategy and External Relations, who discussed the risks identified in the Risk Agenda 2023. These included anti-money laundering (AML), sanctions, accounts code, complaints handling, breaches of undertakings, cyber security, buyer-funded developments, transparency and informed choices.
Stephen reminded delegates that Safe Harbour Standard ID technology solutions afford some protections when used by firms, but also explained the importance of managing clients’ expectations so that they understand the necessity of the questions being asked related to AML compliance, particularly around proof of funds and source of wealth, and prepare themselves for enquiries.
The use of suspense accounts was discouraged by the CLC when considering the Accounts Code, and delegates were encouraged to investigate underlying causes if they are regularly accruing small balances on their files.
In respect of complaints, the CLC maintain a ‘polluter pays’ approach and statistics are reviewed annually. 40% of CLC firms generated no referrals to the Legal Ombudsman and Stephen reported that complaints tended to focus on delays in updates, returning calls and similar, rather than fundamental breaches. Complaints will remain a key area of focus due to the associated costs, which is circa £900,000 per annum to the CLC, and future training is being considered.
Stephen encouraged members to be careful when presented with opportunities outside of the ‘norm’, referring to cryptocurrency, buyer-funded developments and Building Safety Act. The overarching advice being that firms should carefully assess the risks associated with all work, but especially those where firms are asked to deviate from their standard offering. Ultimately, the advice was to be prepared to reject work if firms are in any doubt.
The CLC’s session concluded with the opportunities for the profession in relation to the requirements to provide Material Information and the future Informed Choice initiative. In respect of Informed Choice, the CLC felt that those firms using review technology, such as Trustpilot or Google, would be well prepared and encouraged members to contribute to the consultation around Informed Choice due to start in 2024, which may potentially include consulting on the publication of requisitions data.
AML was also the focus of a session led by Emma Williams, MLRO, Member of The Law Society’s Money Laundering Task Force and Director of European Risk & Compliance at Simpson, Thacher & Bartlett LLP. Emma focused on the consequences of getting AML wrong, namely personal criminal liability, regulatory sanctions and reputational damage, and encouraged practitioners to ensure that transactions make sense and are consistent with the information presented, rather than simply seeing checks as a tick box list of documents for a file. Emma’s concluding remark of: “it didn’t happen if it isn’t written down” leaving a lasting impressing on attendees. This mirrored the CLC reminder to ensure sources of wealth and source of funds are plausible and explainable, with both Emma and Stephen signposting firms to the resources on the CLC website, including the AML Risk Assessment Template & SOF and SOW Checklist and Guidance May 2023.
The risk of low frequency and high value claims was also underpinned by Sam Moore and John Eastlake of Caytons, who led a session focused on claims avoidance and topical areas of risk. Sam started by considering the positive intentions behind the Building Safety Act, before discussing risks associated with imposter fraud. John Eastlake then shared his experience of buyer-funded developments and their capacity to generate significant claims, with each speaker sharing measures that firms could take to mitigate their liabilities. John warned of reservation and marketing fees being charged, which could potentially be considered part of a larger deposit and therefore amount to a buyer-funded transaction.
Rob Hailstone of Bold Legal Group shared a similar view on the opportunities presented by the Material Information requirements in his entertaining, but thought-provoking session. He discussed the changing responsibilities of conveyancers throughout his 40-year plus career and highlighted how the Bold Legal Group forum, newsletter and other initiatives allow professionals in the sector to seek and share advice, alongside exploring potential new business opportunities. When linking this back to his views on the Material Information requirements, Rob shared examples of firms who used National Conveyancing week to enhance and forge new relationships with local estate agents, and ultimately drive revenue to their firms.
The closing session of the afternoon was a discussion on ‘what keeps firms awake at night’, led by panellists Sue Bence of Simply Property Lawyers, Stuart Forsdike of PCS Legal and Ed Pickard of Miller. This interactive conversation between panellists and delegates provided a positive conclusion to the conference, focussing on the opportunities that fast-moving changes across the conveyancing landscape, particularly with technology and AI, and the attention on upfront information presents for conveyancers and customers.
There continues to be a very valued role for conveyancers, and the knowledge and experience of people working within the profession, but understanding what the opportunities are, and where risks may emerge are key to ensuring the skills mix in any practice is fit for a sustainable future.