Principality Building Society Conveyancing Panel Update - Building Insurance Changes

In line with new CML Handbook changes Principality Building Society have updated their specific requirements relating to building insurance. As a conveyancer on the Principality Building Society Conveyancing panel one needs to check the following: 

You should also make reasonable enquiries to satisfy yourself that:
1. the insurance is in the joint names of us and the borrowers unless the property is leasehold and the lease requires the insurance to be in the landlord’s name, in which case our interest should be noted on the insurance policy.
2. The amount of building insurance cover is at least the amount referred to in the mortgage offer. If the property is part of a larger building and there is a common insurance policy, the total sum insured for the building must be not less than the total number of flats multiplied by the amount set out in the mortgage offer for the property.
3. The building insurance cover is index linked.
4. The following risks are covered -
• Fire, explosion, lightning or earthquake
• Subsidence, heave or landslip 
• Storm and flood
• Malicious damage
• Theft or attempted theft
• Water leaking from tanks or pipes
• Falling trees or branches
• Television, radio-signal or satellite apparatus breaking or collapsing
• Riot
• Impact by aircraft, other flying devices, or any vehicle or animal
• Oil leaking from heating systems.

Submission of the Certificate of Title will be taken as confirmation that you have satisfied yourself in respect of all aspects referred to in CML Handbook Para 6.14.1 including the points above.

Conveyancing Hendon - Conveyancing Search Results

I got asked yesterday by a potential buyer requiring conveyancing in Hendon whether Environmental Searches would show if Hendon is within the Hydrogen Network Expansion plan (LHNE)

LHNE will deliver publicly-accessible, state-of-the-art fast-fill 700 bar hydrogen fueling station network together with new hydrogen vehicles in London, including a number of Hyundai hydrogen fuel cell vehicles and Revolve diesel-hydrogen dual fuel vans.

The LHNE consortium comprises of Air Products, Cenex, Commercial Group, Element Energy, Heathrow Airport Ltd and Revolve Technologies Ltd and the project is co-funded by a grant from the UK’s innovation agency, the Technology Strategy Board.  It is one of five research and development projects selected by the Technology Strategy Board in 2012 to help accelerate the adoption of energy systems using hydrogen and fuel cell technologies, bringing them into everyday use.  The Mayor of London and the Greater London Authority will play a supporting role in the project.

Hendon is set to become the first supermarket location in the UK to have a hydrogen refueling station for a new generation of environmentally-friendly vehicles. Hydrogen supplier Air Products will install the SmartFuel station at the Sainsbury’s  Hendon store in North London by the end of the year. As far as I am aware Hendon Conveyancing searches will not reveal such information.

Why even a prophet of doom can be comforting

I’m a specialist in risk, so I can sometimes be accused of being a little conservative in outlook, even for a lawyer. But I suspect that this article will have people reaching for their thesaurus to find stronger words, like “worrier”, “pessimist” or even “doom-monger”.

I’m sticking my neck out today to predict that 2015 is going to be the year of of the file review. And like the mythical Cassandra of Troy, I’m predicting that I’ll be roundly ignored and then proved right. Although unlike Cassandra, I hope to avoid insanity. And seduction by a god.

There are a number of reasons why many files will come under the spotlight by lenders in the next twelve months:

• Regardless of whether and when interest rates move upward, experts predict a correction in the market. However small a correction that is, some borrowers will quickly find themselves in dire straits and we will see a slow but steady return to repossessions, although even I don’t foresee it being on scale of the early 90s.
• Lenders will definitely not, it won’t surprise you, swallow their losses without a care in the world. For conveyancers, that means file reviews because lawyers are an “easy target” for a lender looking to offset a loss – or pass it on altogether.

• The Conveyancing Quality Scheme (“CQS”) was introduced by the Law Society in 2010 in an attempt to drive up standards among its members and thereby improve lender confidence in the legal profession generally. The scheme’s credibility is now being brought into question, with file audits conspicuous by their absence. As such, CQS has suffered various body blows in the last 12 months. Lenders will only maintain confidence if CQS offers up some sacrificial lambs. Rumours already abound that file reviews will be the most impactful and equitable approach.  

• Professional negligence cases, mostly initiated by lenders, were up by 20% in 2014. There is no sign of this abating in 2015. This climb in claims is in line with a 30% increase in litigation firms’ requests from Lexsure for archived CML Part 2 requirements. Last week Joe Bryant, partner at city firm RPC said: “On the face of it, this looks like a pretty shocking, sudden and unexpected rise. Claimants – many of them lenders – are rushing to launch claims for perceived professional negligence against law firms before they run out of time.”

Given the complexity of the Handbook and the frequent changes to it, solicitors run the risk of failing to meet the contractual obligations assumed under the CML Handbook. Yet failure to adhere to these obligations may result in a claim for breach of contract – a claim that does not require negligence to be proved.

File reviews are at best an irritation, more usually a source of concern and sometimes lead to embarrassment or worse for firms and for individual lawyers.

Strong risk assurance embedded in your firm’s everyday practice can nullify those worries. Lexsure’s COMPLETIONmonitor, a product that for many can be used for free, is perfect for protecting your back.

COMPLETIONmonitor, built by experienced conveyancers with the assistance of claims handlers, not only gives you assurance on the kinds of errors that often end with firms being sued, but also makes reporting for lenders’ audits as simple as pressing a button.

Even better, if your professional indemnity insurance is with AmTrust, your firm can actually save money, as PI renewals are discounted for firms that lower their risk profile by using COMPLETIONmonitor.

If you’d like to find out more about how COMPLETIONmonitor can prevent risk and save you worry and money send me an e-mail to sseaton@lexsure.com, or join me for a one to one demo by clicking here and hear it straight from the [Trojan] horse’s mouth.

Are you going straight to tribunal if you breach the CML handbook?

Over the last few years, the SRA and  Scottish Solicitors’ Discipline Tribunal  have taken disciplinary action against firms appear to have failed to comply with requirements to report key facts about transactions to lenders.

The focus has been on significant failures to comply with CML Handbook requirements which, when followed, will reduce the risk of mortgage fraud.

Failure to comply with these requirements potentially exposes the profession (as well as reputational) risk and in the case of Scotland to significant financial risk in the form of increased Master Policy insurance and Guarantee Fund claims and premiums.

The SRA and SSDT appear to be taking disciplinary  action as a proportionate response to what appear to

be cases involving significant risk. As far as I understand neither operate a policy to review all breaches of the CML Handbook.

More recent disciplinary actions appear to feature firms demonstrating systematic failings. These involve a number of transactions which include failures to report facts to lenders as required by the CML handbook. The cases clearly highlight the reasons why regulators are concerned by significant failures of this type and the impact they can have on individual solicitors and the wider profession both reputationally and financially.

Australians set to improve UK Conveyancing

Australian legal information services provider InfoTrack has signaled an aggressive global acquisition strategy with an agreement to acquire the largest independent property search company in England and Wales, STL Group PLC.

According to Mr Wood, chief executive of InfoTrack, “Australia has a track record in developing new technologies then – for a range of well documented reasons - we end up selling the farm to overseas interests”.

“We have developed a great business here and we are determined to keep it in Australian hands while at the same time enhancing our offering to the legal profession, not just in Australia but in key legal jurisdictions around the world,” he commented.

Mr Wood went on to say that not only was the acquisition good for Australia, it will also deliver enormous benefits to STL clients with significant investment planned for STL’s technology platform. The STL business has been operating across the UK for over 40 years, and he looks forward to further growing what is already a strong business.

“We believe the UK market has great opportunities for a high-quality, integrated search offering that doesn't exist there yet and STL is an excellent foundation for us to bring that offering to market for the benefit of firms. Their reputation, client base and business partnerships will make it very easy for us to replicate the great success we have had locally,” said Mr Wood.

“STL is the perfect strategic fit for us,” added Mr Wood. “Their business model and integration with LEAP UK and other legal software providers mirrors how we do business in Australia and we look forward to working with them to develop and cement their position as a leading legal search provider in the UK”.

 STL provides solicitors, conveyancers and property professionals with extensive commercial and residential property searches in addition to company searches, anti-money laundering searches, EPCs and surveys and property insurance services. STL will continue to operate as its own brand.

“This is a fantastic opportunity for STL,” commented Alan Thorogood, CEO of the STL Group. “We share a vision with InfoTrack of providing all conveyancing searches and an excellence of service combined with market leading technology. The UK search market is ripe for innovation – by combining data with systems, we aim to make the search process as efficient and seamless as possible for our clients”.

Want a handy guide to explain the next Handbook changes?

Legal risk and compliance experts Lexsure are giving conveyancers a sneak-preview of the most extensive set of CML Handbook changes in twelve years.

The Council of Mortgage Lenders notified Lexsure last month that they intend to publish important amendments to the CML Lenders’ Handbook for England and Wales on 1 December. The changes represent the largest number of revisions made to Part 1 of the Handbook since the second edition of the Handbook was published in 2002. In all, 33 sections, more than 10 % of the Handbook will be amended. It is anticipated that almost all lenders will update their Part 2 requirements on the 1st December or shortly thereafter.

Examples of some of the Handbook sections to be changed include :

4.1 Valuation of the Property

5.5.1 Planning and Building Regulations

5.6.1 Good and marketable title

5.14.13 Leasehold Property

11.2 Signing and witnessing of documents

3.1 and 3.2 Safeguards for solicitors/conveyancers

Lexsure have compiled a free dossier of changes, crucial for law firms who wish to gain an insight into the forthcoming changes.

It would be remiss of me not to thank CML who continue to be very helpful in preparing Lexsure for major changes and enabling us to update theCOMPLETIONmonitor checklist. These changes are significant and some of the implications are far-reaching for the way conveyancers work. As part of our commitment to helping lawyers reduce their risk profiles, Lexsure are happy to make this information available to firms, who can then prepare properly and use the dossier as evidence supporting a Competence Statement for those adopting the new SRA approach to continuing competence.

Law firm’s can request a free Lexsure dossier.

Limited slots are available for a demo of COMPLETIONmonitor which includes the latest Handbook changes – bookings can be made here

AmTrust-insured solicitors prepare for significant CML Handbook amendments

Legal risk experts Lexsure will be giving conveyancers with AmTrust PI insurance an exclusive sneak-preview of the most extensive set of Handbook changes in twelve years.

The Council of Mortgage Lenders have notified Lexsure that they intend to publish important amendments to the CML Lenders’ Handbook for England and Wales on 1 December. The changes represent the largest number of amendments made to part 1 of the Handbook since its latest edition was published in 2002. In all, 33 sections, more than 10 % of the Handbook will be amended.

Lexsure approached strategic partners AmTrust Europe Limited, an ‘A’ rated insurance company, to offer webinar sessions for firms with AmTrust professional indemnity insurance policies. AmTrust, together with its brokers Howden and JLT Specialty, reacted promptly, and a series of exclusive webinars will take place in late November for the insurer’s client law firms.

The live 40 minute webinars, including Q&A, will be hosted by Lexsure chief executive and experienced conveyancer Simon Seaton. They are designed to help law firms gain an insight into the forthcoming changes and enjoy the benefits of dedicated, expert training on the issues raised.

Russell Newell of AmTrust commented, “CML requirements are not guidelines; they are instructions from a conveyancer’s most important client – the lender who funds most purchases. With those instructions about to change in the lead-up to one of busiest times of the year for conveyancers, we wanted to help our law firms reduce the risk of missing these important changes. We are urging our firms to attend the webinars later this month.”

Places at the webinars are limited to firms who are insured with AmTrust and bookings can be made at http://www.completionmonitor.com/december-1st-cml-changes-howden or http://www.completionmonitor.com/december-1st-cml-changes-jlt/.

6 Month Rule Starting to be Extended By Lenders

In recent years a number of solicitors have been found guilty of professional misconduct after breaching the six month rule requiring conveyancing solicitors, to report any transactions in which the property being purchased/remortgaged  has been owned by the owner or registered proprietor for fewer than six months.

The rule, contained in the Council of Mortgage Lenders’ Handbook, is primarily designed to combat the potential for vendors to inflate the value of a property and commit fraud. The lenders’ instructions are clear – you must notify the lender under the ‘six month’ rule of that fact (subject to the stated exceptions)

Yet lenders and PII underwriters often me that non-compliance with disclosure under the 6 month rule is still all too frequent.

The recent case of E.Surv Ltd v Goldsmith Williams Solicitors [2014] EWHC 1104 serves as another reminder that a lawyer must perform the express obligations under the CML Handbook by undertaking a Land Registry search and by reading the office copies so obtained as well as by reading a copy of the valuation report provided to him.  The law firm admitted breach of an express obligation to inform the lender that the borrower had been the registered proprietor for less than 6 months. Goldsmith are not the first and will certainly not be the last to fall foul of this obligation.

The number of claims relating to the failure to comply with the 6 month rule may be set to increase as the lenders start extending their requirements. In the last 24 hours Paratus AMC Ltd changed their CML Part 2 requirements to :

For re-mortgage applications the customer must have owned the property for at least 12 months.

Sub-sales, where the seller has owned the property for less than 12 months and back to back transactions are not acceptable.

Applications which involve assignable contracts or irrevocable powers of attorney in favour of intervening sellers are not acceptable. You should report any other structure to the transaction which has a similar effect to our solicitors.

Other lenders are likely considering similar changes. Firms with current accounts with COMPLETIONmonitor and LENDERmonitor will of course receive notification of changes. Lender focused webinars can be found here.

Is a 'major glitch' for the BOE a 'minor breach' for a solicitor ?

Was your firm - or more importantly were your clients - affected by the technical issues experienced by Bank of England yesterday?

It is understood that many conveyancing transactions were delayed as a result of system problems with the Clearing House Automated Payment System (CHAPS) used by solicitors to transfer same-day mortgage payments during the property buying process. The Chaps system processes on average 5,000 conveyancing completions every day meaning that over 10,000 clients may have had their move delayed or put in jeopardy.  

Quite aside from the stress to the clients (and individual lawyers) hundreds of COLPs will now be on call to decide if the delay to a client's completion should be considered and recorded as a 'minor breach'. Firms must provide services which protect their clients’ interests O(1.2) in a timely manner O(1.5).

Each case needs to be decided on its merits. With many buyers and sellers not being able to move by early afternoon many a COLP will have to consider whether more could have done more to manage expectations.

How many firms considered personal completions, for instance, where the distances involved made this a viable option? Were banks prepared to waive the usual requirement for 24 hours’ notice for banker’s drafts?

Consideration should be given as to whether clients ought to be warned about this possibility in the future - especially given the problems RBS previously encountered. Perhaps a warning in the appropriate letter or report on title for example about the aspects of the transaction that are outside your control?

Food for thought.

Has the Law Society shot itself in the foot with its CMS Proposal?

Unanimity across the spectrum of law firm profiles is rare, yet 99% of law firms surveyed agree that The Law Society's view of endorsing only one or two case & practice management software suppliers is counterproductive. The Society's action may well lead firms to question the endorsement of Reliance and the merits of IT projects such as the Conveyancing Portal. An increasing number of firms are asking themselves whether the Society represents their interests  or is seeking to justify its own existence.

In a recent survey 236 out of 237 senior representatives of over 200 law firms said they were opposed to the Law Society’s proposal to have one (or a very small number of) preferred supplier/s of case and practice management software.

The members of the Legal Software Suppliers Association (LSSA) represent about 80% of the installed law firms market for IT systems in the UK.  They are concerned about a new initiative by the Law Society to engage in a process to choose one supplier as the endorsed partner of the Law Society, with unrivalled exposure to the legal sector. By contrast, the LSSA said, “We are not aware of any discussion with the industry on this issue which we would regard as essential for a properly informed research project.

Those who challenge the evolution of the conveyancing portal  claim that the project is divisive and expensive, imposing a "top down" solution to a problem that barely exists. This is an allegation that is now also being levied by those questioning the 10m investment made by the Law Society into 'Veyo' the new conveyancing portal to be launched next Spring.  In recent weeks a number of stakeholders have asked for me to comment on the conveyancing portal. My view (and it’s one that I have given to the Law Society itself) is that, given that conveyancing negligence claims have soared since targets and speed became all important, more energy should be expended  on reducing risk, thereby boosting the reputation of solicitors among the public and lenders.  

Earlier this year, the online magazine Legal IT asked : So how do you get to become a preferred supplier?

‘The Insider has seen copies of the LSSA/Law Society email exchanges, in which the Law Society is less than forthcoming, but vendors we have spoken to say the only criteria appears to be ‘whoever is prepared to pay the most money’. The figures being mentioned are an annual fee of £50,000 to £100,000 plus commission on sales.”

Chief Executive of the LSSA, Roger Hancock comments: “Diverse Case and Practice Management solutions reflect the requirements of the legal profession from the smallest to the largest, the specialist niche firms as well as those in general practice. The Law Society should take note of its membership’s views regarding a preferred supplier of case and practice management software. The profession does not want this, and considers it totally impractical for a variety of reasons. We call upon the Law Society to abandon this scheme that the industry is so against.”

When asked to comment on the LSSA’s survey findings, the Law Society made no comment.

Insurance Season Boosts Conveyancing Risk Management

Legal software house Lexsure have announced that in the three months leading up to 1st October over 120 firms upgrade their risk processes by  signing up to Lexsure’s conveyancing risk management products.

Simon Seaton, CEO of Lexsure puts the growth down to the recent groundbreaking announcement by  AmTrust Europe Ltd whereby the  ‘A’ rated insurance company declared that for the first time an insurer would link the use of risk mitigation software with lower expenditure on professional indemnity (PI) premiums for law firms.

Seaton commented ‘ COMPLETIONmonitor has previously been recognised as a valuable risk mitigation tool but AmTrust took the innovative step to reward firms that reduce their risk profile by using COMPLETIONmonitor in the conveyancing process. The reaction from firms who insure with AmTrust to  the  per case savings on their PI renewals for each case completed with the software has been tremendous. Even for small firms with active conveyancing practices, the potential for saving of thousands of pounds is very attractive”

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. We are continuing to urge firms who have taken out insurance with AmTrust to use COMPLETIONmonitor to help reduce claims and their own premiums for the future’  

Commenting on the premium reductions last month John Wooldridge, Director of Solicitors’ Professional Indemnity at Howden Windsor said : “We are always looking to find ways for our clients to improve their risk management strategy while also reducing their PII premium.  We are delighted that AmTrust have agreed to recognise the improved risk profile of firms using COMPLETIONmonitor by offering them a direct saving on their premium.  We’re expecting some firms to save tens of thousands of pounds."

Rooftop Mortgages Conveyancing Panel - New Part 2 Requirements

Conveyancing solicitors on the Rooftop Mortgages Conveyancing Panel can, as from today, carry out personal local authority searches as opposed to being required to carry out official searches.

In a change to the lender's CML Handbook Part Two requirements the answer to section 5.4.5 (Does the lender accept personal searches and, if yes, what are the lender's requirements?) now reads :

'Yes provided the firm is registered with the Council of Property Search Organisations and subscribes to the Search Code monitored by the Property Codes Compliance Board and also that the requirements under sections 5.4.7 and 5.4.8 of Part 1 are met.'

JP Morgan Chase Bank have made a similar change to the CML Handbook Part 2 section.

The changes come hot on the heals of Lloyds deciding to amend its part 2 of the CML Lenders Handbook to recommend to lawyers on the Lloyds Conveyancing Panel that, when they are using personal searches, they should be supplied by subscribers to the Search Code regulated by the Property Codes Compliance Board (PCCB).

The Search Code provides protection for homebuyers, sellers, estate agents, conveyancers and mortgage lenders who rely on the information included in property search reports undertaken by subscribers on residential and commercial property within the United Kingdom. The Code is now recognised by many mortgage lenders that make specific reference to it in their Part 2s of the CML Handbook.

Howden Windsor and Lexsure help firms save thousands on PII

Howden Windsor, the specialist Professional Indemnity Insurance (PII) division of Howden Insurance Brokers Limited, has announced an exclusive arrangement with software provider Lexsure which could see law firms save thousands of pounds on their annual premium. 

Howden Windsor clients who are insured by A-rated insurer AmTrust Europe can save money on their Professional Indemnity Insurance (PII) premium each and every time they use COMPLETIONmonitor, Lexsure’s bespoke conveyancing risk management tool. 

The online checklist has been designed specifically to reduce errors and omissions which may be made in conveyancing transactions. This risk mitigation software is the first of its kind to be directly linked to lower expenditure on PII premiums for law firms.

With the average 2013/14 PII premium for 4 to 10 partner law firms at well over £50,000 and often representing over 5% of firms’ gross fee income, PII is a significant expense to all firms, regardless of size or claims history. This has led Howden Windsor and AmTrust to seek innovative ways to help firms to make savings on their premium. 

In 2013, Howden Windsor announced its exclusive facility with AmTrust for 4 to 10 partner firms. With a broad risk appetite, straightforward approach to quotation and the option of policy periods in excess of 12 months, Howden Windsor and AmTrust listened to the needs of firms of this size and responded 

with a facility designed to meet them. 

Howden Windsor and AmTrust have now taken their commitment to clients one step further by offering firms a £10 saving on the following years’ premium for each and every conveyancing transaction that is carried out using COMPLETIONmonitor. 

Risky Business

An observation from the trenches: Conveyancing lawyers aren’t very good as assessing risk. They tend to overinflate those that have the lesser ramification and underestimate those that pose a real threat.

To be fair, they are in good company. Lots of business focus on risks that simply don’t exist or, at most, pose little threat. Does an airline pilot really need to surrender his tweezers at airport security when he's about to board an aircraft equipped with an axe on the back of the cockpit door? Can a mobile phone really cause a major explosion at a petrol station?

Many a lawyer would think that the  exposure to claims results from a drafting error or  lack of knowledge.  Insurance company research,  however, shows that just one in eight claims against law firms arises from lack of legal knowledge, while one in three claims is sparked by seemingly small mistakes in ‘legal housekeeping’. One only needs to review the latest question identified on PI renewal forms so see that these are areas of concern.Yet law firms concentrate their resources on developing legal expertise rather than improving administrative processes.

Identifying real risk is difficult. Contrary to public opinion, conveyancers are human and, like most people, exaggerate spectacular but rare risks and downplay common risks.

I am sure that many conveyancers can think of examples where a  lawyer acting for a purchaser has raised an issue that is never likely to result in a claim. I am all for making sure that you look out for issues that concern the buyer or borrower -- and by all means check that there is are guarantees for woodworm treatment etc. But has a lawyer ever been sued for not making sure that a dry rot guarantee has been assigned?

On the other hand, some lawyers tend to forget that the lender is also the client and there are detailed, strict lender requirements that change often. This is where the frequency and volume of claims occur. It is failing to comply with those obligations that potentially cripples a firm. The evidence is clear: Nearly 25% of all claims against solicitors as a whole are lender driven.

An evidenced-based approach to risks in questioning the frequency of claims is what Lexsure focused on when building COMPLETIONmonitor. Of course firms can add questions to their checklist but the core of system focuses on where the most common areas of claim are.

In the case of Risk Management, Denial IS Just a River in Egypt

Can conveyancing be better risk managed?

To a room full of lawyers, the answer to this question is so obvious that you would be forgiven for feeling silly for asking it. However, sit opposite a law firm owner and you may find that they are far more comfortable responding “no”. Yet more than that, it would likely be followed with the statement that “it’s most other firms which are in need of better risk management, not us.” Better risk management is for others.

The difficulty with risk analysis conducted by solicitors for themselves is that it to be done right it requires an objective perspective; which, by definition, is an impossibility. Just as Snow White’s tormentor got the same self-sure answer when she asked “Mirror, mirror, on the wall...”, for most solicitors, it's a foregone conclusion.

This surprises me because there's just so much evidence to the contrary. But, don’t just take my word for it, ask PI Insurers. Residential and commercial conveyancing work undertaken by solicitors accounts for the most claims against the profession, both by number and value, by a significant margin.

The easiest thing to do is accept that everything is fine. When you assume this, all the responsibility for outcomes disappears, and you can relax. Ignore the threat; what a wonderful strategy.

If you accept the results you've gotten before, if you hold on to them tightly, then you never have to face the fear of the void, of lifting up the carpet to see what is underneath.  

However, fear is the driving force here. Better risk management might be difficult. Better might involve an investment time and a change of culture, but better is definitely possible. And the alternative is dangerous.

We see it in the behavior of some of the firms that sign up to Lexsure's COMPLETIONmonitor. Some 25% of those signing up waited more than 12 months between reviewing the software and actually signing up. What changed their minds? Claims.

Using risk reduction software to save law firms "tens of thousands of pounds"

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'.

COMPLETIONmonitor’s AML Module Anticipate SRA Risk Concerns

As the Solicitors Regulation Authority (SRA) has identified money laundering as one of the two biggest current risks to law firms, it’s worth reviewing how COMPLETIONmonitor’s Anti-Money Laundering Search module helps law firms spot and mitigate the risk in conveyancing transactions. 

AML Search is a powerful and robust online anti-money laundering and identity verification service. With the underlying data provided by Equifax, COMPLETIONmonitor have access to a range comprehensive and in-depth information that gives law firms an effective tool to tackle the threats presented by money launderers and terrorist financiers.

The risk itself is not new, but the “the techniques used and the context in which it takes place are constantly changing and becoming ever more sophisticated”, according to the regulator. That’s why the SRA has made a priority risk of money laundering stemming from inadequate systems and controls over the transfer of money. 

In short, COMPLETIONmonitor’s AML search:

• Conducts searches against the Equifax database
• Automatically flags non-compliant files and allows you to take remedial action
• Enables the MLRO to set and control their AML policies and procedures by pre-determining which checks are carried out and what pass criteria need to be met
• Allows Compliance Officers and the MLRO to demonstrate to the SRA that the firm has a robust systems in place for monitoring compliance and ensuing remediation or any potential breaches of your AML policies & procedures.

If integrated with COMPLETIONmonitor, high-risk cases can be automatically frozen, preventing the case from being signed off until further investigation is completed.

We developed COMPLETIONmonitor’s AML search for law firms to address the latest anti-money laundering regulations and operational challenges. The search offers an extensive selection of checks on individuals, all available through a single search encompassing proof of residency checks, proof of identity checks and alert notifications. For extra convenience and ease of use, we provide an innovative AML Profile and ‘pass or refer’ outcomes (with warnings where appropriate).