Tuesday, July 8, 2014
Legal risk software house Lexsure and AmTrust Europe Limited, an ‘A’ rated insurance company, have signed a groundbreaking agreement that for the first time links the use of risk mitigation software with lower expenditure on professional indemnity (PI) premiums for law firms, a move that could be worth tens of thousands of pounds for some firms.
Professional indemnity premiums are a great concern for law firms, as, particularly for smaller firms, they can constitute one of the largest costs to the business aside from salaries. Furthermore, a practice that is refused PI cover can be forced to go out of business, a fate that befell some firms in England and Wales last year.
Now, for the first time, law firms can evidence their lower risk profile for conveyancing transactions by using Lexsure's COMPLETIONmonitor software, an online checklist, tailor-made for conveyancers to reduce and eliminate errors and omissions.
COMPLETIONmonitor has previously been recognised as a valuable risk mitigation tool but AmTrust have now taken an innovative step and will reward firms that reduce their risk profile by using COMPLETIONmonitor in the conveyancing process. Firms who insure with AmTrust can expect a per case savings on their PI renewals for each case completed with the software. Even for small firms with active conveyancing practices, this is likely to result in a saving of thousands of pounds.
Russell Newell, Head of Professional Indemnity at AmTrust Europe, said ‘We appreciate that the cost of PI insurance premiums has a great impact on law firms, particularly for firms that do a lot of conveyancing, due to the frequency and size of claims in that field. We believe it is right and fair to offer a financial reward to firms that empirically demonstrate risk mitigation by using COMPLETIONmonitor'.
Saturday, February 1, 2014
One of the predictable consequences of the SRA listing the firms that were closed recently was that fraudsters could take advantage of the situation.
Within a few days of the the SRA list being published the SRA received information that a member of the public has received emails falsely claiming to be from Christopher Anderson of Andersons Solicitors. The emails relate to an unclaimed inheritance from a previously unknown relative. The real Anderson solicitors closed on the 29th December. The firm was on the list on 136 firms.
The fraudulent emails describe Christopher Anderson as "sole legal counsel" and give the email address firstname.lastname@example.org or email@example.com, telephone number +44 7924 551 313 / (0) 7924 551 313 and the address Bosewell Cottage, 19 South End, Croydon, CR0 1BE. The address matches the address of the former genuine firm.
The SRA does authorise and regulate an individual called Christopher Anderson. However, the SRA has been informed that the genuine solicitor and former genuine firm have no knowledge of or involvement in sending out these emails relating to obtaining the benefit of an unclaimed inheritance from a previously unknown relative, and no connection with the email addresses firstname.lastname@example.org and email@example.com.
Last November the CML announced that the new "Lender Exchange" was set to launch in the first quarter of 2014. The Lender Exchange is the technology platform for the Lloyds Conveyancing Panel Portal.
Members of the Law Society were contacted late last years putting them on notice of the new portal. The letter states firms need not take any immediate action but that further information would be provided in early 2014 by various lenders who would mandate the use of the conveyancing panel portal.
Well early 2014 has been and gone and there is an early silence.
Faced with a potential credibility challenge to CQS Des Hudson advised solicitors that he is continuing to challenge the CML and the Decision First process in the strongest terms. He is also liaising with the Law Societies of Scotland and Northern Ireland who share our concerns for their members who will also be adversely impacted.
The new panel management facility has two stated objectives – to minimise the costs and administrative burden on conveyancing solicitors responding to regular duplicate information requests from multiple lenders and to help lenders minimise fraud and negligence through robust due diligence (although it is not yet clear how this second element is to be achieved).
The panel software will give conveyancing firms throughout the UK (not just England and wales) an easy way to submit and update information to lenders about their conveyancing practice through a, secure interface, saving them time and duplication of effort in meeting the terms of their lender panel membership.
Lenders such as Lloyds, in turn, will be able to access information to enable them to assess the continued suitability of a firm on the Lloyds Conveyancing panel, depending on their own individual requirements.
Tuesday, January 28, 2014
The SRA are inviting views on a proposal to increase the current level of their fining powers for 'traditional' law firms from their current level of £2,000 potentially to £100,000.
COLPs in particular should consider reading and respond to the consultation paper which can be found here
Tuesday, January 14, 2014
It is hoped and anticipated that, any day now, the Solicitors Regulation Authority will publish a list of those law firms which were to have closed on 29 December because they failed to secure professional indemnity insurance.
The SRA action is likely to be a response to increasing voices of concern among solicitors over the SRA’s admission last week that it was not sure whether all 116 affected firms had actually stopped practising.
These firms are bound, by the SRA's own code, to cease trading but it is feared that some may be waiting for the SRA to formally shut them down.
Firms conducting conveyancing are particularly exposed given the reliance on undertakings. What if you have one or more of these firms on the other side of a conveyancing transaction, but because of the SRA's stance you currently don't not know about it? This could have potentially disastrous consequences not just for your client (in terms of delaying the transaction) but directly to your firm. If you send money to a closed firm or rely on undertakings, you are going to have to explain this to your lender client. Will it affect your panel status?
As a COFA you need to know that you are not trading or sending funds to firms that effectively don't exist.