CLC lays out plans for changes to charges and practice fees

The Council for Licensed Conveyancers (CLC) has laid out its plans for changes to the charges and practice fees.

The CLC has launched a consultation on proposals to change how its contribution towards the Legal Ombudsman is paid, so that those firms that generate complaints pay 50% of the cost, rather than 30% as now.

The CLC is also consulting on increasing the fee practices pay for regulation by 9%.

The annual consultation on the CLC’s fees and charges for the year from 1 November records how the regulator has released excess reserves back to the profession and operated a deficit budget in recent years – as a result, practice fees fell by 60% between 2017 and 2022.

However, reserve levels are now at a level the CLC needs to maintain, and so full operating expenditure needs to be charged back to the those it regulates

Over the same period, the CLC has faced both rising costs and falling practice turnovers as a consequence of the pandemic and subsequent economic downturn – aggregate practice turnovers fell by 4% in 2023 and a further 1% in 2024. As practice fees are based on turnover, this has meant lower income for the CLC.

The CLC is also being required to undertake more activity, such as enhanced anti-money laundering supervision and responding to more prescriptive regulatory requirements from the Legal Services Board and other stakeholders.

This all means that the fees collected by the CLC are no longer sufficient to cover the cost of delivering consumer protection. This leads the CLC to propose a 9% rise in 2024, equivalent to 6p per £1,000 of turnover.

The CLC’s budget will be £2.78m as a result, with the extra money used on resources, including staff to support:
    • Policy development, with a focus on consumer-focused regulation, post completion, handbook and regulatory framework updates picking up on matters in CLC’s recently launched risk agenda;
    • Enquiry and complaint handling; and
    • Additional capacity in monitoring and licensing to improve data collection, analysis and interpretation, as well as specialist investigation capability.
The OLC levy:

At the moment, 70% of the levy to pay for the Legal Ombudsman is met by all firms – recognising the collective benefit of the service – with 30% allocated to practices as a usage charge based on the number of cases accepted for investigation by the ombudsman.  However, 57% of practices currently have had no cases accepted for investigation in the last three years.

The consultation proposes moving this to 50/50 so as to provide a stronger incentive for the small number of firms that generate disproportionate levels of referrals to the Legal Ombudsman to reduce those consumer complaints.

As a result, 63 of the 85 practices with cases at the Legal Ombudsman will pay slightly less than they currently do – the reduction in the profession-wide charge will offset the increase in usage charge – while the other 22 practices will pay more. Practices with no cases will pay less.

Other fees:

The CLC is not proposing to change any other fees, meaning that individual licence fees will remain at £400 (for either conveyancing or probate) or £475 (for both), the level they have been at since 2010. Compensation Fund contributions were last amended in 2020, when they were reduced by 60%.

CLC Chief Executive Sheila Kumar says:

“The CLC has worked hard over several years to absorb rising costs, recognising that times have been tough for conveyancers.

“The Executive team has worked closely with the CLC Council to balance the need to maintain its regulatory approach and accommodate changing levels of expectations of regulators.

“However, we believe that now is the time to invest to ensure that our high standards of consumer protection and promotion of the public interest endure while continuing to provide the regulatory system that specialists appreciate.

“We first split the cost of the Legal Ombudsman levy in 2022, so that those generating more complaints bore more of the burden, and this year marks the first step of our stated goal of increasing the share that is met by practices originating disproportionate levels of complaints.

“We believe this is equitable and should also act as a strong incentive for firms to ensure they deal with complaints quickly and fairly.”

 

The consultation runs for eight weeks and closes on 6 September.

 

Kindly shared by The Council for Licensed Conveyancers (CLC)