The Legal Services Board (LSB) has given itself more time to decide on whether to approve a new breed of law firm, the result of a partnership between CILEx Regulation and the Association of Chartered Certified Accountants (ACCA).
Matthew Hill, chief executive of the LSB, described rule changes proposed by CILEx Regulation to permit CILEX-ACCA firms as “significant and complex”, as was their “impact on the regulatory landscape”.
The postponement announced by the LSB will increase the time it has to decide on the matter from 28 days from the date of CILEx Regulation’s rule change application to 90 days, giving the oversight regulator until the end of October.
Mr Hill said the LSB believed it would be necessary to raise further enquiries “to ensure that the impact of the proposed changes is fully understood and assessed”.
The ACCA announced a year ago that it was withdrawing 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.
In its rule change application, CILEx Regulation said that allowing firms to become authorised as a CILEX-ACCA probate entities would provide a “convenient route” for them to conduct probate activities.
If they wanted to expand into any other kind of reserved work, they would need to become a CILEx authorised entity and be licensed as an alternative business structure.
Although the new form of entity regulation “largely mirrors the existing approach to the regulation of ACCA probate firms”, CILEx Regulation said it had improved consumer protection by increasing the minimum professional indemnity insurance level from £100,000 to £500,000 and introducing a requirement to comply with the price and service transparency rules.
Under the scheme, ACCA members would have to deliver probate services through a separate limited company.
“The responsibility for unreserved activities will remain with ACCA, as the primary regulator of the firm’s activities. This is to mitigate risk to the consumer and promote greater clarity of regulatory structure.”
Individuals would be regulated by CILEx Regulation as ‘CILEx Practitioner (ACCA-Probate)’.
CILEx Regulation said it had created a new ‘CILEx Regulation-ACCA Handbook’, which aimed to mirror, as far as possible, the rules currently adopted by the ACCA.
CILEX-ACCA firms would not be permitted to hold client money or carry out estate administration.
CILEx Regulation said it was aware of the “perceived risk of creating a two-tier system of regulation for firms and individuals wishing to carry out probate as an ancillary service, and those regulated as a legal practice offering one of the reserved legal activities”.
However, it intended to create a “clear differentiation” between the route that an ACCA firm may pursue in becoming authorised for non-contentious probate as an ancillary activity, and a firm intended to provide legal services “as their main role”.
CILEx Regulation said it would propose an individual practising certificate fee for this year of £100 and a firm fee starting at £200.
“CILEx Regulation is offering a brand-new route to authorisation for ACCA entities wishing to continue to conduct the reserved activity of probate.
“By virtue of CILEx Regulation’s position as a regulator by specialism, the proposed route is accessible and convenient to the affected entities and practitioners and will cause minimal disruption to the market and profession.”
The Council for Licensed Conveyancers attacked the deal as a “proposed ‘pre-pack’ scheme to facilitate the exit of ACCA from legal services regulation”.