CQS Conflict Handling Policy: Dual Representation, Lender Disclosure and Practical Safeguards

A CQS Conflict Handling Policy should help your conveyancing team decide when the firm can act, when a concern needs escalation and when it must stop acting.

Those decisions can become difficult under pressure. A buyer asks you not to disclose something to their lender. An estate agent wants the firm to represent both parties. A registration problem raises questions about advice the firm previously gave.

In each situation, staff need a clear procedure and access to someone authorised to assess the position.

This article reviews practical points for your CQS Conflict Handling Policy, including Lexsure’s April 2025 update on conflict assessment and dual representation, and September 2024 updates concerning separate fee earners and lender disclosure.

Originally published December 2023. Updated October 2026.

What should a CQS Conflict Handling Policy achieve?

Section 5.7 of the CQS Core Practice Management Standards addresses conflict handling. The firm’s policy should explain how concerns are identified, assessed, recorded and reviewed throughout a matter.

A useful document connects the professional rules with everyday conveyancing decisions. It should identify:

• Who carries out the initial conflict assessment.
• Which people, entities and related matters should be checked.
• When a fee earner must refer a concern to a supervisor or compliance officer.
• Who can approve a decision to act in a sensitive case.
• What must be recorded and when the decision should be reconsidered.
• How the firm handles circumstances requiring it to cease acting.

These are practical drafting considerations. The procedures should reflect the firm’s work, systems and management arrangements.

Start by distinguishing the different issues

A sound assessment identifies whether the concern involves competing duties to clients, the firm’s own interests, confidential information or a combination of those issues.

The relevant framework appears in the SRA Code of Conduct for Firms:

• Paragraph 6.1: acting is prohibited where there is an own interest conflict or a significant risk of one.
• Paragraph 6.2: client conflicts and significant risks of them are prohibited, subject to specified exceptions and conditions.
• Paragraphs 6.3–6.5: confidentiality, disclosure and material confidential information require separate consideration.

The policy should help staff identify the applicable issue before deciding what safeguards or action might be appropriate.

April 2025 update: assess whether dual representation is permissible

Lexsure’s April 2025 paragraph, Policy on Conflict of Interest Assessment and Dual Representation, addresses situations where a firm proposes to act for both seller and buyer.

The starting question is whether the firm may properly accept both instructions. Consent and separate fee earners do not, by themselves, establish that it may do so.

A practical assessment should examine:

• Whether the parties’ interests already diverge or may materially diverge.
• Whether substantive negotiations remain outstanding.
• Whether either party needs advice that could disadvantage the other.
• Whether information can properly be shared.
• Whether vulnerability, pressure or unequal bargaining power affects the position.
• Whether applicable lender instructions or panel conditions restrict the arrangement.

The fact that both parties want a quick completion does not settle these questions. Nor does a family relationship or an agreement about the price.

Written consent is one part of a wider assessment

The SRA’s conflicts guidance explains the limited exceptions for client conflicts: a substantially common interest or competition for the same objective.

Where an exception is relied on, all applicable conditions must be met. These include informed consent given or evidenced in writing, appropriate confidentiality safeguards and a reasonable basis for acting for everyone concerned.

The policy should therefore require a reasoned decision rather than relying on a standard consent form. It should also make clear that client consent cannot cure an own interest conflict.

September 2024 update: make separation effective in practice

Lexsure’s Acting for buyer and seller update addresses separation between the people representing the different parties.

Where acting is permissible and separation is required, the firm needs arrangements that work within its actual systems and staffing structure.

Questions worth addressing include:

• Who can access each electronic and paper file?
• Can shared support staff or supervision arrangements undermine separation?
• How are emails, documents and telephone messages directed?
• What happens when a fee earner is absent?
• Who checks that the safeguards remain effective?

These arrangements should connect with the firm’s Information Management and Security Policy.

The firm must consider its capacity honestly. If it cannot provide the safeguards needed for a proposed arrangement, it should not proceed on the assumption that naming two fee earners resolves the difficulty.

September 2024 update: lender disclosure and borrower confidentiality

Lexsure’s Disclosure obligations to the lender update focuses on disclosure considerations, including confidentiality.

When a firm acts for borrower and lender, its procedures need to address information that may affect the lender’s instructions or lending decision.

For example, a buyer may reveal an arrangement affecting the price or intended occupation, then ask the conveyancer not to tell the lender.

The policy should direct the fee earner to establish:

• What the applicable lender instructions require.
• Whether disclosure is authorised or otherwise legally permitted or required.
• Whether any further client consent is needed.
• Whether the firm can continue to discharge its duties to both clients.

Where the firm cannot meet those duties consistently, it must assess whether it needs to cease acting. Withdrawal must also preserve confidentiality; explaining why the firm is withdrawing can itself disclose protected information.

These issues should be read alongside the firm’s Dealing with Lenders Policy and our earlier article on lender representation and confidentiality.

Include referrals and commercial relationships

A referral relationship can create pressure even where the introducer is not a client. An agent, broker or developer may expect rapid progress, access to information or an approach that suits their commercial interests.

The conflict policy should explain how staff raise concerns about these pressures and how the firm assesses relevant financial or personal relationships.

Receiving repeat instructions is not automatically a conflict. The important question is whether the circumstances compromise, or create a significant risk of compromising, the firm’s duties.

A useful procedure gives staff an escalation route when a commercially important relationship is involved, including where the concern relates to a partner or manager.

Address own interest conflicts when something goes wrong

A conveyancing problem may expose a potential error by the firm. For example, a later sale could reveal that an earlier title issue was not adequately addressed.

The policy should identify who assesses whether the firm can continue acting and how the matter is escalated for consideration of client communication, insurance and independent advice.

The SRA’s guidance on putting matters right and own interest conflicts is relevant here. The firm should assess the circumstances rather than assuming either that every error requires immediate withdrawal or that an opportunity to correct the problem always permits continued representation.

Repeat the assessment when circumstances change

A conflict check at file opening records the position then. New information may require a fresh assessment.

Useful review triggers include a change of lender, a new party joining the transaction, disagreement between joint clients, a request to withhold information or discovery of a possible error by the firm.

The policy should explain how staff record that reassessment and identify any restrictions on progressing the matter while a decision is pending.

This should connect with the escalation arrangements in the CQS Risk Management Policy.

Record a decision someone else can understand

A short entry saying “conflict checked” may offer little explanation of a difficult decision. For a sensitive matter, consider recording:

• The clients, related parties and relevant circumstances.
• The conflict, risk or confidentiality issue identified.
• The applicable rules and lender restrictions considered.
• The reason the firm concluded it could or could not act.
• Any consent, safeguards and approval obtained.
• The events that would trigger reconsideration.

The level of detail should reflect the issue. The aim is a useful record of judgment that a supervisor or reviewer can follow.

Review your Conflict Handling Policy against the latest listed updates

Lexsure’s CQS Conflict Handling Policy page lists the full template alongside individual updates on dual representation, separate fee earners and lender disclosure.

If you already own an earlier policy, compare its wording with those updates and identify any changes needed to your procedures. Check which amendments are included in the version you are purchasing or using.

Once changes are approved, explain them to the people handling enquiries, opening files and supervising transactions. Practical scenarios can help establish whether staff know when to escalate a concern.

Policy templates and update paragraphs require assessment and adaptation to the firm’s circumstances. Decisions about whether to act must satisfy the applicable professional rules and lender instructions.