Frequent CQS non-compliances – could you be caught out?

Our first question related to the number of assessments that had been undertaken since the Law Society updated the CQS standards in May 2019; the response to this question was:

• We conducted a pilot over the period November 2019 – March 2020 to test methods of assessing firms.
  • We conducted 11 desk-based assessments. These were undertaken by the CQS Chief Assessor (on behalf of the CQS office) onsite at the firm. Assessments were put on hold due to Covid-19.
    
    
  • We conducted 16 onsite assessments. These were undertaken by Centre for Assessment (an authorised assessment body assessing on behalf of the CQS office) onsite at the firm. Assessments were put on hold due to Covid-19.

Our second question related to the number of firms, subject to onsite assessments, that were sent corrective action reports since May 2019; the response to this question was:

• Firms were provided with Outcome letters. One firm who was assessed on the desk-assessments did not have any corrective actions.

Areas of non-compliance

Our final question related to the main areas of non-compliance that were found during the assessments and it is the response to this question that CQS firms need to consider and review in relation to their own levels of compliance:

• We assessed compliance against both the Core Practice Management Standards as well as the Protocol. Please see the list below of the frequent non-compliances:
  • CPMS 1.1 (risk management policy – compliance plan, risk register, risk management roles and responsibilities)
  • CPMS 1.2 (Stamp Duty Land Tax policy)
  • CPMS 1.3 (AML terrorist financing policy)
  • CPMS 1.4 (property and mortgage fraud policy)
  • CPMS 1.5 (leasehold property policy)
  • CPMS 5.3 (client communication)
  • CPMS 5.8 (matter closing procedures)
  • Protocol step 12 (confirmation of instructions)

It is clear from the results of the assessments that some firms were not only non-compliant in some key areas of CQS, but also the SRA Codes of Conduct; strictly speaking some of these firms should have reported serious non-compliances to the SRA, especially those related to money laundering!

Post-Covid

Once Covid-19 related lockdowns are out of the way it will be interesting to see how many assessments will take place on an ongoing basis and whether a certain amount of ‘catch-up’ will take place in relation to the postponed onsite visits; the pilot only equated to 0.5% of CQS firms being assessed, which suggests that more firms will be assessed going forward, especially as 10% is normally regarded as a wide enough pool to provide meaningful data.

With a booming conveyancing market at present, it is key that CQS firms ensure they are and remain compliant with the Core Practice Management Standards and Conveyancing Protocol, otherwise they may risk losing a business-critical accreditation.