Sunday, 7 December 2014

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.

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