CLC sets out plan to cut cost of practising
The Council for Licensed Conveyancers (CLC) is consulting on significant reductions to its regulatory fees, reflecting the effectiveness of CLC’s specialist regulation in maintaining high standards of compliance. The move is also in response to the strong business performance its regulated community has maintained in recent years and CLC’s own budget management.
The CLC has made a public, strategic commitment to reducing the financial burden of regulation and has already reduced Annual Practice Fee rates by more than a quarter since 2015.
The base Compensation Fund contribution has been stable at 0.4% of turnover since 2011.
Now the CLC is considering reducing annual licence fee rates paid by CLC-regulated firms further, by up to 20%, and contributions to the Compensation Fund by up to 60%.
The individual licence fee charged to CLC lawyers providing conveyancing and/or probate services will remain unchanged at £400.
The Council of the CLC has also agreed to stop charging Conveyancing and Probate Technicians a £75 registration fee. This is not subject to consultation and takes immediate effect.
The Council found that it could safely consider reducing the cost of practising further while maintaining high standards of consumer protection for three main reasons:
- The CLC’s proactive approach to securing compliance minimises the number of failures that result in harm to clients and expensive corrective work.
- As a result of this cost management and the sale of properties owned in the past by the CLC, reserves are now at a level that should be reduced closer to the minimum level set by the Council.
- Despite uncertainty in the housing market, CLC-regulated firms have been performing well in business terms, so the CLC does not need the current levels of reserves in hand to deal with the potential impact of wider economic instability on the firms it regulates. The CLC is able to run a deficit budget for a period to reduce those reserves.
The CLC is required by the LSB to consult on fee rate changes and a consultation paper has been published today on the new framework ahead of it taking effect – subject to approval by the Legal Services Board – from the new licensing year, which starts on 1 November 2019.
CLC Chief Executive Sheila Kumar says: “Good regulation does not have to come with an onerous price tag. Our focus is on prevention, rather than what can often be a very expensive cure, and the community we regulate has responded positively, saying that they value this approach.
“The latest proposed reduction in practising fees continues our long-term commitment to delivering effective regulation while reducing costs to individual firms and is in line with our ambition to be the regulator of choice in our specialist areas.
“It is a testament to the effectiveness of our specialist and proactive regulatory approach that we are able to make a bigger step than in previous years towards this goal, despite the challenges in the housing and thus also in the conveyancing market. We will only make reductions that we are confident are sustainable over the long term as a lack of consistency in fee rates would itself be damaging to the market.”
There are six key factors the Council will have to consider in determining at what level the fee rates should finally be set. These are:
- a) Total turnover of practices under CLC regulation as well as the growth in turnover since the prior year
- b) The CLC’s projected expenditure for 2020
- c) Land Registry data which provides current data about the conveyancing market
- d) The current state of the wider economy
- e) Projected pipeline of practices coming into CLC regulation
- f) For the Compensation Fund, analysis of the current levels of claims
The consultation closes at 5 pm on Friday, 21 June 2019.
Kindly Shared by CLC The Specialist Property Law Regulator