The Legal Services Board (LSB) has approved CILEx Regulation’s application to take over the regulation of probate work carried on by members of the Association of Chartered Certified Accountants (ACCA).
We first reported in August 2020 that the ACCA planned to withdraw from legal services regulation, in the first move of its kind.
A partnership was later announced between ACCA and CILEX, which would allow the 65 firms and 88 individuals currently accredited by the ACCA to do non-contentious probate work to be regulated by CILEx Regulation.
This will also enable them to expand into other reserved work if they want, although they would need to become a CILEx authorised entity and be licensed as an alternative business structure.
The responsibility for unreserved activities will remain with ACCA as the primary regulator of the firm’s activities and so, to ensure clarity, ACCA members will have to deliver probate services through a separate limited company. CILEx Regulation said this would be easy to set up.
They will be known as CILEX-ACCA firms – and will not be allowed to hold client money or carry out estate administration – while individuals will be ‘CILEx Practitioner (ACCA-Probate)’.
CILEx Regulation has created a new handbook which aims to mirror, as far as possible, the rules currently adopted by the ACCA, although it will increase the minimum professional indemnity insurance level from £100,000 to £500,000 and introduce a requirement to comply with the price and service transparency rules.
Most of the firms already have this level of cover and CILEx Regulation estimated that the cost for the others would be a premium increase of just £126.
It also intends to extend the ACCA’s existing requirement for fidelity guarantee insurance to CILEX-ACCA firms, rather than require them to contribute to its compensation fund, given that they will not hold client money.
An individual practising certificate fee for this year will be £100, with a firm fee starting at £200.
CILEx Regulation told the LSB that the benefits of creating a new class of entity included “the effective and clear separation of the reserved activity of probate and the main accountancy business” and no requirement for anti-money laundering supervision as the new entity would not hold client money.
The LSB said it ensured the new arrangements made clear the position where there was a conflict between its and the ACCA’s (or another body’s) regulatory arrangements.
Professor Janine Griffiths-Baker, chief executive of CILEx Regulation, said: “We’re extremely pleased to have worked with the ACCA over the past year on this unique project and that the Legal Services Board has extended our activity to allow us to regulate another profession delivering legal services.
“We look forward to announcing the details for existing ACCA firms to transfer to CILEX Regulation in the next week and to engaging with new ACCA members who wish to deliver probate services alongside their accountancy provision in the future.”
The change will take effect from 1 January 2022 and the ACCA will apply to the LSB to be de-designated as a legal regulator.