All Change for 2019…it’s the new CQS Core Practice Management Standards….
Yes, that’s right. Slightly over a year since we predicted they would be updated, the new CQS Core Practice Management Standards (referred to as CPMS for the rest of this article) have been released, and will be implemented from the 1st of May 2019 for all existing CQS member firms, and for any new entrant CQS firms.
So what’s new?
Well, the first thing of note is that in the past, the CPMS have lined up with some of the core policies and procedures of the Law Society Lexcel standard, so that when an application was made, then if the member firm was a Lexcel accredited practice it had to answer one simple question on the application which meant it could avoid filling more out.
Sorry - not this time around…
Firstly the new CPMS lines up with the latest version of Lexcel, V6.1, but with extra requirements. So if your firm is not Lexcel accredited, it will still have to change its policies and procedures which used to line up with the older version of Lexcel, and if your firm is a Lexcel firm, then there will be extra work involved to make sure you’re compliant with the extra CQS requirements.
In summary, if your firm isn’t accredited to Lexcel V6.1, then it will have the most work to do getting the CPMS implemented.
Some examples of changes (without too much extra detail), with our comments in italics
1.2 Practices must have a policy in relation to Stamp Duty Land Tax. 1.2 and its subsets a. to c. are new for Lexcel and CQS
1.3 Practices must have a policy, approved by senior management to mitigate and manage money laundering and terrorist financing risks and to ensure compliance with anti-money laundering legislation.
The policy must include;
f. a procedure for dealing with the transfer of clients from one department of the practice to another
While we’ve only listed f. above, the requirements in this section mirror Lexcel V6.1 and the Money Laundering Regulations 2017
1.4 Practices must have a policy in relation to the avoidance of involvement in property and mortgage fraud – the points from a. to f here are more detailed than the equivalent in Lexcel V6.1 for example;
e. a documented procedure showing how the practice will proceed when acting for a buyer when there is a significant risk of a fraudulent seller
1.5 Practices must have a policy in relation to acting in a purchase of a freehold property. This and its sub- sets a.i to a.iii are new to both Lexcel and CQS
3.4 Practices must have a training policy which must include;
a. ensuring that relevant members of staff are aware of these Core Practice Management Standards and the ways in which the practice complies
b. ensuring relevant members of staff understand and follow the National ConveyancingProtocol where possible
c. ensuring relevant CQS training is completed on time
d. ensuring that relevant staff stay up to date in residential conveyancing, client care and risk management
These points are new to CQS and do not exist in Lexcel V6.1
3.5 Practices must have a procedure to ensure files are regularly monitored and that adequate cover is provided for the staff who are absent.
3.8 Practices will analyse at least annually all risk assessment data generated within the practice, this must include;
d. any matters notified to the COLP or COFA
e. any material breaches notified to the SRA
f. any non-material breaches recorded
g. situations where the practice acted where a conflict existed
i. risk of non-compliance with current policy to manage personal data
These points are new to CQS but mirrored in Lexcel V6.1
3.9 Practices will have a policy on the handling of conflicts which must include;
d. steps to be followed when acting on both sides of a transaction
f. how to manage possible conflicts between a lay client and a lender client
These points are new to both CQS and Lexcel V6.1
4.1 Practices must have a documented policy for client care including - the points from a. to f here are more detailed than the previous CQS CPMS but are part of Lexcel V6.1
4.5 Practices must have a documented procedure for reporting matters to lenders which must include;
a. where available, the use of any specified reporting form provided by the lender
b. identification of the nature of the matter being reported
c. providing appropriate legal advice and indicate what action can be taken to minimise or eliminate any risk
These points and 4.5 in general are new to CQS and have no equivalent in Lexcel V6.1
5.2 Practices must have a procedure to accept or decline instructions which must include; points a to d and 5.2 are new to CQS but contained in Lexcel V6.1
5.4 Practices must have a procedure for ensuring the SRA’s price and service transparency requirements are met. This point is new to CQS and does not exist in Lexcel V6.1 and will apply to firms without a website
Just a note on “5.5” and “5.6” below – at the moment there are two of each in the standard, so we’re referring to the 5.5 on Page 19 and 5.6 on Page 20…
5.5 Practices must have a procedure to;
a. list open and closed matters, identify all matters for a single client and linked files where relevant – this is new to CQS but is part of Lexcel V6.1
5.6 Practices must have a procedure to ensure that, at the end of the matter, the practice:
f. draws the attention to the HMLR Property Alert Service and other fraud guidance published by HMLR – this is new to CQS and not covered in Lexcel versions
6.1 Practices must have a policy to manage personal data which ensures compliance with data protection legislation and recognises other requirements for example UK Finance Handbook – with the exception of the “UK Finance Handbook” this requirement and its subsets a. to f mirrors Lexcel V6.1 but is new to CQS and reflects the changes introduced in the GDPR last year
6.2 Practices must have an information management and security policy, which should be accredited against Cyber essentials. This policy must incorporate the following controls. Point 6.2 and its subsets a. to m are new to CQS but mirrored in Lexcel V6.1
So, after reading all of this, you may be forgiven for considering alternative career choices, however if you or your firm want to be spared some of the pain involved in drafting policies, procedures and all the other ancillary documents, then you know who to call….