The Legal Services Consultative Panel (the Panel) was established by the Access to Justice Act 1999 in January 2000.
The Panel has considered a reference made to it by the Lord Chancellor under section 18A(3)(b) of the Courts and Legal Services Act 1990 (as amended by section 35 of the Access to Justice Act 1999) which sought the Panel's advice on rule changes concerning the Council for Licensed Conveyancers. The LSCP's advice was given in May 2002.
The advice is published on behalf of the Panel by the Lord Chancellor's Department.
Paper copies of the Panel's advice are available from the Panel Secretariat (tel: Jan Farenden on 020-7210 8816 or e-mail her: Jan Farenden ).
The panel comprises:
| Lord Justice Potter (Chairman) | Mr Ian McNeil | Mr Simon Sapper |
| Professor John Bell | Mr Richard Moorhead | Mr Alan Street |
| Professor Hugh Brayne | Ms Barbara Mensah | Ms Peta Sweet |
| Lady Elizabeth Finsberg | Mr Charles Plant | Dr Matthew Weait |
| Miss Karen Mackay | Mr John Randall QC | Mr Richard Wise |
• Introduction
The Council for Licensed Conveyancers (CLC) was established by the Administration of Justice Act 1985 ('the Act'). The CLC makes rules under section 38 of the Act with the concurrence of the Lord Chancellor. In accordance with the provisions of section 38 the CLC has sought the concurrence of the Lord Chancellor to its revised Accounts Rules, Fees Rules and Indemnity Rules. The Lord Chancellor referred the Rules to the Panel for advice on 15 March 2002.
• Principles
In considering and putting forward its advice on the referral, the Panel has had regard to the principle established by the Courts and Legal Services Act 1990 and the Access to Justice Act 1999, of developing legal services in England and Wales (in particular advocacy, litigation, conveyancing and probate services) by making provision for new or better ways of providing such services and a wider choice of persons providing them, while maintaining the proper and efficient administration of justice.
• Basis of referral
The Office of Fair Trading Report Competition in Professions highlighted that some professional rules might be anti competitive and as such not be consistent with national or European competition considerations. The Lord Chancellor is therefore keen to ensure that he takes full account of all possible factors when exercising his duties in deciding whether to approve any rules of the various legal professional bodies.
• Rule Changes
The CLC has sought the concurrence of the Lord Chancellor to its revised Accounts Rules, Licensed Conveyancers Fees Rules and Indemnity Rules. The Accounts rules are being amended to provided a more cohesive and consolidated structure. The changes will also tighten up some of the procedures for handling money in client's accounts.
The Licensed Conveyancers Fees Rules are renewable annually. The level of fees payable by conveyancers for a licence to provide conveyancing services are unchanged. The Indemnity Rules are also renewable annually. The premium costs which are contained in the Master Policy remain unchanged.
• Conclusions
The Panel is satisfied that all the rules currently under consideration provide adequate protection to consumers of the services of licensed conveyancers. The Panel also draws the attention of the Lord Chancellor to the view of the Panel that licensed conveyancers should provide their clients with a letter of engagement which inter alia sets out the procedure for seeking redress where the client is dissatisfied with the services or conduct of the licensed conveyancer.
The Administration of Justice Act 1985 ('the Act') gives the Council for Licensed Conveyancers (CLC) the power to make rules but they must ask the Lord Chancellor to concur in the making of the rules. The CLC was established by the Act to provide conveyancing services. Prior to the setting up of the body in 1987, conveyancing had been the sole preserve of solicitors. The Act places a duty on the CLC to:
"ensure that the standards of competence and professional conduct among persons who practise as licensed conveyancers are sufficient to secure adequate protection for consumers, and that the conveyancing services provided by such persons are provided both economically and efficiently."
The Lord Chancellor referred the Accounts Rules, Licensed Conveyancers Fees Rules and Indemnity Rules to the Panel for advice under section 18A(3)(b) of the Courts and Legal Services Act 1990 (as amended by section 35 of the Access to Justice Act 1999). The Panel discussed the referral at its meetings on 25 March, 29 April and 27 May. The working group, formed to consider the referral, also met with representatives of the CLC on 25 April. The CLC had also provided the working group with detailed information about the CLC under cover of their letter of 16 April.
Section 22 (1) and (2) of the Administration of Justice Act 1985 states:
"(1) The Council shall make rules requiring licensed conveyancers to keep such accounts in relation to their practices as may be prescribed by the rules.
(2) The Council shall also make rules requiring licensed conveyancers
There is also a requirement for the rules to make specific provision for the keeping of clients' money and any interest which may accrue in the account (section 23 of the Act). However, this would not affect any arrangement made between a conveyancer and his/her client on the way the money is held or the payment of interest on it.
Section 14 of the Administration of Justice Act 1985 requires that an application to practise as a conveyancer must be made to the CLC and should be accompanied by a fee as prescribed in rules made by the CLC. Until April 2000 the fees were contained in the Licensing Rules (for individual licensed conveyancers) and the Recognised Body Rules (for recognised bodies ie corporate bodies). In order to simplify the procedure, amended Recognised Bodies Rules, which were approved in April 2000, made reference to the new Licensed Conveyancers Fees Rules which henceforth would specify the level of fees due for the current year.
Section 21(1) of the Act requires the CLC to make rules for indemnifying licensed conveyancers and former licensed conveyancers:
"against losses arising from claims in respect of any description of civil liabilities incurred by them, or by employees or associates or former employees or associates of theirs, in connection with their practices as licensed conveyancers."
The Master Policy and Evidence of Insurance form part of the Rules. This sets out the manner in which the indemnity scheme works and details of how to make a claim.
Section 21(2) requires the CLC to:
"make rules for the making of grants or other payments for the purpose of relieving or mitigating losses suffered by persons in consequence of -
Section 21(4) continues the powers pursuant to which the CLC can require its members to affect insurance under the Master Policy.
The rules of the Compensation Fund are unchanged and have not been referred to the Panel for advice.
The Panel has considered the rule changes so as to see whether they provide adequate protection for consumers whilst not imposing unnecessary burdens on licensed conveyancers and that the proposals for fees are fair as between the different classes of membership.
The Accounts' Rules which provide the framework for the handling of clients' money have been the subject of minor revisions, additions and clarifications. These represent improvements and are satisfactory. The rules provide for a report each year by an independent qualified accountant and there are also arrangements for monitoring visits on a two year cycle by the CLC. The Panel recommends that the revised rules be accepted.
The Licensed Conveyancers Fees Rules, approved by the CLC on 8 May 2002, prescribe the licence fees payable for the following year by practising licensed conveyancers, employed licensed conveyancers, students and "Recognised Bodies". The Accounts show that these fees, which are applied in meeting the responsibilities of the CLC, resulted in a small surplus in each of the last two years. The fee levels are unchanged for the forthcoming year and the Panel recommends their acceptance. The costs of indemnity insurance and levies for the compensation fund are met separately by those in practice and are not covered by the Fees Rules. The Accounts of the Compensation Fund are kept separate from the Accounts of the CLC.
The Indemnity Rules, approved by the CLC on 8 May, require all licensed conveyancers who hold a full licence to practice as a Principal to maintain professional indemnity insurance under a Master Policy taken out by the CLC. The minimum cover provided by the Policy is £1million on any one claim and higher levels of cover can be made available by the insurers if requested in individual cases. The premiums are based on a percentage of turnover with a base minimum. The claims experience suggests that the level of indemnity is adequate without being excessive and the existence of a single Master Policy enables compliance and claims to be monitored which is an important aspect of the CLC's function of regulation and consumer protection. The Panel is satisfied that the rules currently under consideration provide adequate protection to consumers of the services of licensed conveyancers in the event of a successful claim for negligence. The Panel recommends acceptance of these rules for the year commencing July 2002. It is understood that the cover and premium rates remain unchanged for that year.
It is relevant to note that in addition to the indemnity cover the CLC also operates a Compensation Fund which can also respond to unpaid claims from consumers which fall outside the scope or extent of cover offered by the indemnity policy. The rules of the Compensation Fund have not been referred to the Panel but the fund does provide additional protection particularly in cases of dishonesty. It is funded by a levy on turnover which also finances the cost of monitoring compliance with the Accounts Rules.
The Panel is uncertain how well the possibilities of redress are known to consumers in the event of breach of professional duty or default by licensed conveyancers. We were informed that there is no requirement for a letter of engagement between the licensed conveyancer and his/her client setting out the professional obligations and duties of the licensed conveyancer. The Panel takes the view that there should be such a letter, which in particular sets out the procedure for seeking redress where there is dissatisfaction with the service or conduct of the licensed conveyancer.
The Panel has not considered the Compensation Rules, and the adequacy of the Compensation Fund, on which its advice has not been sought. The Panel is satisfied that all the rules currently under consideration provide adequate protection to consumers of the services of licensed conveyancers. The Panel also draws the attention of the Lord Chancellor to the view of the Panel that licensed conveyancers should provide their clients with a letter of engagement which inter alia sets out the procedure for seeking redress where the client is dissatisfied with the services or conduct of the licensed conveyancer.