The Council for Licensed Conveyancers (CLC) has been slammed by a panel of experts who overlook the legal profession’s regulation and represent the public within decision making.

Their comments come within a new position paper that scrutinises the recent property industry referral fees scandal. Called the Legal Services Consumer Panel, it is highly critical of the regulatory ‘blind spots’ within conveyancing following last year’s TV exposé involving Connells.

Almost exactly a year ago the BBC Panorama team found that several of the estate agency’s managers had incentivised staff to steer buyers towards in-house or preferred conveyancing services, regardless of quality or consumer interest, it was claimed.

At the time, Connells said it was “committed to treating all customers and prospective buyers fairly”.

But while both the estate agency industry and conveyancers had hoped the scandal had gone away, the new report opens up once again the debate around how the relationship between conveyancers and estate agents, and the referral fees involved should be policed.

Report criticism

The report’s criticism of the CLC is strong, taking it to task for being, by its nature, a softer alternative to competitor the Solicitors Regulation Authority.

The report says: “What Panorama revealed was the consumer consequence: referral fee arrangements in a regulatory blind spot, because a smaller regulator with limited resources and a stated interest in retaining regulated firms had not prioritised proactive oversight of arrangements financially significant to those firms.

“A single, unified regulator with no institutional interest in competing for firms, and the scale to conduct systematic proactive supervision, would not have left this as a blind spot for consumers buying their homes.”

Disappointed

The CLC says it is ‘extremely disappointed’ in the ‘inaccurate’ report. Its Chief Executive Sheila Kumar (main image), says: “First of all, last year’s BBC Panorama investigation highlighted wrongdoing by unregulated estate agents, not by conveyancers.

“Nevertheless, the CLC took the decision that it would again look at this topic in the context of its mandate, the regulation of conveyancers, to see if anything more could be done to improve the situation of consumers in the absence of regulation of estate agents.

“It is perhaps notable that we were the only regulator of conveyancing to do this. Responding to market intelligence is the sign of a proactive regulator with a resolute focus on acting in the public interest and the capability and resources to do so. It is worrying that the panel misread this so badly.

“We continue to press for the regulation of estate agents on this and wider consumer protection grounds, and in the meantime have identified areas where we can strengthen transparency and consumer protections in our code.

“The panel also talks about our ‘active recruitment of regulated firms’. Our conveyancing and probate firms benefit from the CLC’s focused regulation and the high standards we set for entry for both individuals and practices. This means CLC regulation is good for consumers and good for lawyers.

“The Legal Services Act was designed to give both a choice and the CLC is simply demonstrating that it is a good choice to make. Our specialism is why we are one of the key organisations leading the work on home-buying reform, ensuring it works for the public and those who advise them.”

Read the position paper in full.