Kumar: Focus is on prevention
The body that regulates licensed conveyancers is looking at steep reductions in the cost of practising, arguing that “good regulation does not have to come with an onerous price tag”.
The Council for Licensed Conveyancers (CLC) has issued a consultation on its fees for 2019/20 that proposes reducing annual licence fee rates paid by CLC-regulated firms by up to 20%, and contributions to the compensation fund by up to 60%.
The individual licence fee charged to CLC lawyers providing conveyancing and/or probate services will remain unchanged at £400.
In the current year, CLC-regulated firms turning over less than £100,000 pay a fee of £770 plus 1.1% of turnover.
Those with a turnover of £100,001 to £500,000 pay a minimum fee of £1,100 plus 1% of turnover over £100,000.
For firms with a turnover of £500,001 to £3m, it is a fee of £5,100 plus 0.9% of turnover over £500,000.
Those with a turnover of more than £3m pay £27,600 plus 0.8% of turnover above £3m.
The CLC has made a public commitment to reducing the financial burden of regulation and practice fees have fallen by more than a quarter since 2015.
The base Compensation Fund contribution has been stable at 0.4% of turnover since 2011.
The CLC said its council decided that it could safely consider reducing the cost of practising 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 this 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 set by the council; and
- 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.
CLC chief executive Sheila Kumar said: “Good regulation does not have to come with an onerous price tag. Our focus is on prevention, rather than what can often be a very expensive cure, and the community we regulate has responded positively, saying that they value this approach.”
The move was also “in line with our ambition to be the regulator of choice in our specialist areas”, she added.
“We will only make reductions that we are confident are sustainable over the long term as a lack of consistency in fee rates would itself be damaging to the market.”
The CLC has also agreed to stop charging conveyancing and probate technicians a £75 registration fee. This is not subject to consultation and takes immediate effect.