Council for Licensed Conveyancers (CLC) moves to cut cost of practising
The Council for Licensed Conveyancers (CLC) plans to implement an even greater reduction in its regulatory fee rates than first proposed during a consultation earlier this year.
The reduction supports the CLC’s strategic goal to reduce the regulatory cost burden on CLC practices.
Its consultation on the 2020 practice fee rates, issued in May, originally suggested a 20% reduction this coming year. Now, the regulator of specialist property lawyers has applied to the Legal Services Board for approval to reduce practice fee rates by 30%. This is in addition to a 20% cut made in 2016 and 10% in 2018. At the same time the CLC has proposed a 60% cut in Compensation Fund contribution rates.
The move reflects the effectiveness of CLC’s specialist regulation in maintaining high standards of compliance, as well as its careful budget management. It will also help the CLC deliver its longer-term plan to manage a reduction in the level of reserves in the practice fund – the money which covers the cost of regulation.
The base Compensation Fund contribution has been stable at 0.4% of turnover since 2011 but will change to 0.16% if approved by the Legal Services Board.
The new licensing year starts on 1 November 2019.
The individual licence fee charged to CLC lawyers providing conveyancing and/or probate services will remain unchanged at £400.
The Council of the CLC 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 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 of £1m 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 Council will review the regulatory fee rates next year to consider whether a further reduction is achievable taking account in particular of market conditions at that time. Any changes will only be proposed if the Council is confident they are sustainable over the long term as a lack of consistency in fee rates would itself be damaging to the market.
Sheila Kumar, CEO of the Council for Licensed Conveyancers, says:
“There are real benefits for all, particularly consumers, when our approach as a risk-based independent regulator, working with our regulated community, enables us to pass on regulatory savings in the form of lower fees.
“Our focused approach means we are in close touch with those we regulate, with regulatory supervision managers who understand not only the regulatory but also the business risks the regulated community faces.
“This means we take the action that is needed to ensure licensed conveyancers deliver a high-quality service, while not burdening them with unduly costly and onerous regulation. It is especially pleasing that we are able to go further than initially indicated, in line with our ambition to be the regulator of choice in our specialist areas.”
Kindly shared by Council for Licensed Conveyancers