Probate: Questions over limit of reserved legal activity
Solicitors’ firms specialising in conveyancing and probate should know there is an alternative to the Solicitors Regulation Authority (SRA), the chief executive of the Council for Licensed Conveyancers (CLC) has said.
In the second part of our interview with Sheila Kumar (see the first part here [1]), she spoke too about how the planned transfer of anti-money laundering (AML) supervision from legal regulators to the Financial Conduct Authority (FCA) could actually increase risk across the sector.
As well as business as usual, Ms Kumar anticipated that the shift in AML regulation would take up a lot of her time in the coming year. The CLC has been clear in its opposition [2] to the move.
In practical terms, there are questions about co-ordination and information sharing with the FCA – given the risks inherent in conveyancing, AML is an integral part of inspections the CLC carries out and in some ways cannot be divorced from other areas of compliance. It raises a significant risk of duplication.
“AML is part of the overview that we take of firms, so it’s not that we’re not going to look at anything about that,” she pointed out, “and we have to be aware of the risk of fracturing oversight of practices between AML and other areas, which could increase risk across the legal sector.”
Other tasks for this year include the roll-out of a new ongoing competence regime that moves away from hours-based CPD to focus more holistically on professional development.
In its last assessment of the frontline regulators’ performance, in March 2025, the Legal Services Board (LSB) raised a question about the CLC’s use of informal sanctions, which are not made public.
Ms Kumar said ‘informal’ was not how the CLC described them – rather, they are administrative actions aimed at getting a practice back into compliance, and so are not a sanction, as such. And as they have not been through an external adjudication process, “it doesn’t seem right that people should be named and shamed for that, especially if they’ve come back into compliance”.
She added: “From the point of view of public protection, bringing people into compliance is the most important thing we can do.”
Those who do not get back into compliance, however, can expect formal enforcement, which is recorded publicly.
This all reflects the CLC’s approach of ‘managed compliance’ – having a relatively small number of firms to oversee, around 220, allows it to maintain close relationships with them. The LSB described this as “a unique approach within the wider regulatory landscape”.
Another issue raised by the LSB was reassurance of the CLC’s financial resilience, but Ms Kumar said she was confident that this was not a problem, a view backed up by external auditors.
Nonetheless, in the LSB’s traffic-light rating, the CLC received one green (‘effective approach to regulation’) and two ambers (‘well-led’ and ‘operational delivery’). Ms Kumar noted that the oversight regulator is revising its approach to performance assessments.
And in light of questions about the LSB’s oversight of the SRA, given Axiom Ince and SSB Group, does she have confidence in the oversight regulator?
She welcomed the appointment of a permanent chief executive and soon permanent chair, and noted the upcoming review of the LSB by the Ministry of Justice (announced last week). “We will fully participate in that… We have confidence in the need for oversight arrangements for sure, but that doesn’t mean there aren’t things that could be improved.”
And what of the idea of a review of the Legal Services Act? As a Ministry of Justice civil servant, Ms Kumar worked on the Clementi review that led to the Act, and her personal view was that “I don’t really think that is necessary”.
She explained: “I’m sure there are things that could be improved [but] my worry is that it would end up becoming a conversation about whether you have a single regulator. That would be a complete distraction from actually doing the job that we’re all here to do, which is being good regulators of legal services aiming to make the important changes that need to be made.”
And what about confidence in the other regulator of conveyancing work, the Solicitors Regulation Authority (SRA), given recent events, which led to a very negative performance assessment last March?
Ms Kumar said contacts directly between the two organisations worked well, “The bigger question is around the regulatory performance assessment. When we talk about greens, ambers and reds, are they actually getting to the heart of whether the regulatory system working in those particular areas?”
And of course, the CLC is in competition, to some extent, with the SRA, in that it encourages conveyancing and probate firms to consider switching regulator.
“What we do want to do is make sure specialist firms are aware of is that there actually are alternatives,” Ms Kumar said. “And we would say we are a sensible alternative because overall all the information we get is that professional indemnity insurance rates are lower.
“There are a number of other benefits of being in a specialist regime. So it’s a more than legitimate choice for either firms who deal with conveyancing and probate specialisms or who may be thinking about setting up separate entities to deal with that to look at places other the SRA.”
Then there is probate – it is often forgotten that the CLC regulates probate work. The name obviously doesn’t help.
“It’s a more difficult sell, given our title,” Ms Kumar acknowledged, “but our strap line is regulating property and probate lawyers.”
Indeed, in December, the CLC introduced an ‘advanced probate exemption’, providing STEP (Society of Trust and Estate Practitioners) professionals with a streamlined route to licensing.
The “bigger issue” in probate was how the narrow nature of the reserved legal activity – just the grant of probate – has influenced the business model.
As a result, “there’s a lot of unregulated provision out there, or largely unregulated provision apart from the narrow bit of reserved probate activity. So the challenge is less about communicating to them that we do regulate probate but about entering regulation in the first place”.