Accountants told to respect spirit of legal services reforms if they want to regulate probate

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11 September 2012


Probate: must be no impression of accountants or lawyers judging their own

The Institute of Chartered Accountants in England and Wales (ICAEW) needs to abide by the spirit of the legal services reforms if it is to regulate probate work, the Legal Services Consumer Panel (LSCP) has urged.

Despite welcoming in principle the ICAEW’s application to become an authorising body and having had “numerous meetings” with its officials, the LSCP said it found it “very disappointing” that the committees overseeing the accountants’ supervisory and disciplinary framework for probate would not have lay majorities.

Under the proposals, the ICAEW’s probate committee, which would number at least nine members, would have a lay chairman and a third would be non-accountants. Another third would be probate practitioners. Although a lay majority could arise, “this is unlikely to transpire”, said the LSCP in its response to a consultation on the application.

The panel acknowledged that the ICAEW was not bound by the Legal Services Board’s (LSB) internal governance rules specifying lay majorities. But it should nevertheless follow them: “In our view the lay majority principle embodies the spirit of these rules.”

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The composition of the probate committee is “the litmus test of ICAEW’s commitment to public interest regulation”, the LSCP continued. “Other professional sectors have moved to lay majorities and are reaping the benefits including better decision-making and gaining from the fresh perspectives and expertise brought from other environments. ICAEW is swimming against the tide and we urge it to reconsider these proposals.”

The panel applied the same argument to the ICAEW’s plans for its disciplinary committee, which require that only a quarter of members be lay. Other disciplinary bodies have moved to a lay majority, it said. “Findings in disciplinary proceedings are as visible sign of independent regulation as wider governance structures and there must be no impression of accountants or lawyers judging their own.”

Under the application, a single regulatory framework would apply to firms wishing to become accredited for probate work, but they could either apply to become “authorised firms” or “licensed firms” (alternative business structures). In the former case all principals and owners would be individually authorised, but not in the latter. ICAEW research suggests that around 250 accountancy firms could seek accreditation to do probate work.

In other concerns raised by the LSCP, it said the proposal to allow client money to be placed in foreign accounts “could mean weaker depositor protection” and “exposure to currency fluctuations”. Further, the ICAEW should carry out Criminal Records Bureau checks on non-accountants seeking authorisation.

It also argued that ICAEW rules on informing insurers about first-tier complaints made to the Legal Ombudsman, along with offers of redress, were “onerous and could lead to a defensive mindset as found among many lawyers”.

Lastly, the panel called for ICAEW-regulated probate practitioners to be required to do an element of continuing professional development related to this area of work.

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