This guidance is here to provide useful information to the regulated community and provide example policies or procedures
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To be read in conjunction with Item 10 of the Accounts Code Payment into Client Account
i) When a client account is being opened, written notice should be given to the Bank or Building Society concerned in clear terms that the account is to be a Client Account and, in particular, that it may not be resorted to for the purpose of setting off against any other account of the body. The Bank or Building Society should also be asked to acknowledge its acceptance of this in writing.
(ii) You/the entity may keep one Client Account or as many Client Accounts as you think fit.
(iii) Subject to Requirement 10.3, the CLC permits schemes proposed by Banks to aggregate sums held in a number of Client Accounts in order to maximise the interest payable.
(iv) Client Accounts are not intended to provide banking facilities for Clients.
(v) There are criminal sanctions against assisting money launderers – see Anti-Money Laundering and Combating Terrorist Financing Code.
(i) Client Money includes money held or received:
(a) as agent, bailee or stakeholder;
(b) for payment of stamp duty land tax, Land Registry fees and telegraphic transfer fees (this does not become Office Money unless an obligation to pay out of Office Account has been incurred and the payment is recorded in the office columns of the appropriate client ledger account).
(c) as a payment on account of costs generally.
(ii) Money held to the sender’s order is Client Money if accepted and must be held in a Client Account unless it is received on the express terms that the cheque or draft (as opposed to the money itself) may not be presented for payment without the sender’s consent. In this case you are under a professional obligation to return the cheque or draft to the sender on demand.
(iii) A payment made by you to a Client which is credited to Client Account in accordance with requirement 10.4.2 becomes Client Money and must be recorded in both the client and office columns of the appropriate client ledger account.
(iv) You cannot be your own Client for the purposes of this Code; if a transaction is conducted for a manager, money held or received on your behalf is in principle Office Money. However, money received in such a case may still be Client Money, e.g.:
(a) where you/the entity act for a lender, money held or received on behalf of the lender is Client Money;
(b) where you/ the entity act for a manager and his spouse jointly (assuming that the spouse is not also a manager in the entity), money received on their joint behalf is Client Money:
(c) where you/the entity acts for an employee (whether or not a Licensed Conveyancer), consultant or director, such person is regarded as a Client of the entity and money received on his behalf is Client Money, even if that person conducts the transaction himself.
To be read in conjunction with Item 12 of the Accounts Code
Client Account Withdrawal & Transfer
(i) Money held on account of Costs and Disbursements becomes Office Money on the date the bill of costs is sent to the Client (requirement 12.1.4).
(ii) Money is ‘expended’ under requirement 12.2.3 at the time when a cheque is despatched, not when it is cleared. Money is also regarded as expended by the use of a credit account so that, for example, search fees, taxi fares and courier charges incurred in this way may be transferred to the Office Account.
(iii) Requirement 12.2.4 permits you to transfer from client to office bank account monies where a direct debit scheme is in operation. A liability to pay out of Office Account is deemed to have incurred when the anticipated payment from office bank account has been evidenced on a Durable Medium and recorded on the office side of the appropriate client ledger account.
(iv) The purpose of requirement 12.2.6 is to enable you, with the written authority of the CLC, to participate in schemes for automated payments to be made direct from Client Account. The CLC will generally only authorise individual payments to enable aged balances to be cleared.
(v) Bearing in mind note (ii), you should take care in drawing against a Client Account cheque or draft which has not yet been cleared. If the cheque or draft should be dishonoured, you will have to make a payment under requirement 10.4.2 to ensure there is no breach of requirement 12.4.
(vi) Similarly, if when acting for a Client you withdraw money from Client Account on the strength of information that a telegraphic transfer is on its way, but that transfer does not arrive, you will have to make a payment under requirement 10.4.2 to ensure there is no breach of requirement 12.4.
(vii) A manager of a body or the Head of Finance & Administration of a Licensed Body must be able to operate the Office Account of the body in order to be able to comply with requirement 12.5.
(i) Nothing under requirement 12.8 shall prevent any other person from operating such systems or processes in conjunction with an Approved Person, provided that such systems or processes cannot be operated by that other person alone.
(ii) Oral authorisations to the Bank are no longer permitted without confirmation of such authorisation on a Durable Medium.
Withdrawals & Transfers
(i) Monies remaining in Client Account that cannot be paid to the Rightful Recipient can be dealt with under requirement 12.2.6 (bearing in mind the Aged Balance Guidance attached to this Code).
(ii) Provided certain criteria have been met, withdrawals are allowed where the CLC has given authority and the balance has been static for over 12 months.
To be read in conjunction with Item 13 of the Accounts Code
(i) Where Banks operate automatic transfers to Client Accounts offering a higher rate of interest, separate cash accounts are not required to record these transfers.
(ii) Only client ledger accounts in the name of a Client are allowed. General or suspense client ledger accounts are not permitted.
Separate Designated Accounts
(i) ‘Clearly identifiable’ means that, looking at the ledger account, both the nature and owner of the mortgage advance are unambiguously stated.
(ii) Although a separate ledger account is not opened for the lender, the mortgage advance credited to the client’s ledger account belongs to the lender, not to the borrower, until completion takes place.
Improper removal of such funds from a Client Account is contrary to requirement 12.4.
(i) Where, as a result of carrying out the comparisons and preparation of the reconciliation statement under requirement 13.9, any shortfall on Client Account is revealed it must be made good Without Delay by a payment into Client Account in accordance with requirement 10.4.2.
(ii) Where, as a result of carrying out the comparisons and preparation of the reconciliation statement under requirement 13.9, any credit balance on the office side of a client ledger account is revealed, it must be rectified by the appropriate action Without Delay.
(iii) Any outstanding credit on the client bank reconciliation should be cleared by a payment into client bank account Without Delay. The absence of a corresponding entry at the bank may create a shortfall on the relevant client ledger account.
To be read in conjunction with Item 14 of the Accounts Code
(i) Reasons are not required to be given for an inspection.
(ii) You are required to provide, where required by the CLC’s appointee, access to any computerised system.
(iii) If it appears to the CLC that there has been a contravention of this Code, disciplinary proceedings may be taken against you as Manager or as an entity under the Code of Conduct.
(iv) Where following an inspection instituted under requirement 14.1 it appears to the CLC that there is reason to believe you have failed to comply with a provision of this Code, the CLC may require you to pay a reasonable sum as is determined by the CLC to cover the cost of a further inspection.
(v) Any report made by the CLC’s appointee may be sent by the CLC to the Crown Prosecution Service or the National Crime Agency or to any of the accountancy bodies recognised by the CLC. It may be used as the basis for a preliminary investigation and may be taken into account by the CLC in relation to the possible disqualification of a Reporting Accountant. Please see Guidance at 16.7.2.
Without prejudice to any other remedy, a Client may apply to the CLC for a direction as to whether or not interest should have been earned in respect of Client Money held on his behalf by an Authorised Person. If the CLC directs that interest should have been earned then it may issue a direction as to the sum you pay to the Client in lieu of interest.
(i) If appropriate, the CLC may require you to obtain an interest calculation from the relevant Bank or Building Society.
Informed Consent/contracting out
(i) Whether it is appropriate to contract out depends on all the circumstances, for example, the size of the sum involved or the nature or status or bargaining position of the Client.
(ii) The larger the sum of interest involved, the greater your obligation to demonstrate that a Client who has accepted a contracting out provision was properly informed and has been treated fairly and reasonably.
To be read in conjunction with Item 16 of the Accounts Code
Accountant’s Reports (1)
(i) Even when this Code does not require delivery of a Report, a condition on a licence to practise may impose a separate and binding obligation to that effect.
(ii) When Client Money is held or received by an entity, any Manager will have held or received Client Money.
(iii) Employees do not usually hold Client Money, even if they are signatories on an entity’s Client Account.
(iv) If an employee does hold Client Money, an Accountant’s Report will need to be delivered.
(v) You must apply to the CLC for consent to vary the Accounting Period.
(vi) When an entity is being wound up, you may be left with Client Money which is unattributable or belongs to a Client who, despite efforts, cannot be traced. It may then be appropriate to apply to the CLC for authority to withdraw this money from the Client Account under requirement 12.2.6 (see CLC’s Aged Balance Guidance attached to this Code).
(vii) It is not a breach of requirement 16.5 for you to retain an independent accountant to write up the books of account and to instruct the same person to prepare and sign the Accountant’s Report. However, the accountant will have to disclose these circumstances in the Accountant’s Report.
Disqualification of Accountants
(i) The CLC may disqualify an accountant from giving an Accountant’s Report if:
a) they have been found guilty by the disciplinary tribunal of their professional body of professional misconduct or discreditable conduct; or
b) it is satisfied that the Reporting Accountant has failed in their Accountant’s Report to properly identify and explain to the satisfaction of the CLC any breaches of this Code.
Aged Balances Guidance
Purpose of Guidance
The purpose of this Guidance is to help the regulated community resolve the problem of Aged Balances; this money cannot be withdrawn from the client account without written authority of the CLC. The Guidance intends to highlight issues which may arise and suggest possible solutions. However, it is up to the individual Authorised Person to decide which options best suit their circumstances.
Part 1 of this note sets out ways in which you can avoid or minimise Aged Balances; and
Part 2 sets out the procedure which the CLC will adopt when it considers whether to give written authority in accordance with requirement 12.2.6 of the CLC Accounts Code.
Part 1 ~ How to Avoid Aged Balances - Example Procedure
On Receipt of Instructions: -
1.(a) obtain the client’s bank details (name and address of bank, sort code, account number and name) e.g. by keeping a copy of cheques issued by the client;
(b) alternatively, obtain the client’s credit card details.
2.(a) “Completion Statement” means an itemised statement of money paid in and out concluding with a balance either owed by or to be paid to the recipient.
(b) Draft Completion Statements should be prepared and checked prior to exchange of contracts.
(c) All Completion Statements (whether in draft or final form) should be checked for accuracy by reference: -
(i) to the account or alternatively to their credit card account; and
(ii) to the client ledger, with evidence from the rightful recipient on Durable Medium.
Client Ledger Card
3. The client ledger card should be checked to ascertain whether a balance remains after the last payment is made and, if so, the balance should be accounted for immediately to the Rightful Recipient.
4.It is good practice to ensure that: -
(i)The client ledger balances are reviewed monthly to identify unexpected or dormant client balances;
(ii)If a balance is held against a contingent liability, a note is made on the client ledger card (alternatively the file) clearly identifying that liability; and
(iii)A schedule of client balances held for 3 months or more is maintained stating in each case the client(s) name(s), file/ledger number, the Rightful Recipient, the balance outstanding, the date of last movement and the reason for the balance.
5.Before a file is closed or archived: -
(a) the client ledger card should be checked to ensure: -
(i) no balance is outstanding;
(ii) all cheque payments have been cleared by the bank;
(b) a copy of the client ledger card showing a nil balance on both the client and office account should be placed on the file.
6.Unpresented cheques should be reviewed on a regular basis.
(a) Unpresented Mortgage Redemption Cheques ~ the Rightful Recipient should be contacted within 12 days or no later than one month after payment has been tendered and then at frequent intervals;
(b) All other cheques ~ the Rightful Recipient should be contacted after no more than two months after the cheque has been tendered and then at a minimum of two monthly intervals.
7.If a cheque has been lost or remains unpresented after six months: -
(a) a stop should be placed on the original cheque;
(b) the cheque should be written back to the client ledger account; and
(c) the monies paid: -
(i) either direct to the Rightful Recipient’s bank account, alternatively credit card account; or
(ii) at the Rightful Recipient’s direction.
8.Where possible you should seek agreement providing for retention monies to be held on terms that provide for payment to a named person at a specified bank account if the terms for their release have not been satisfied within a specified period.
9. If no such term has been agreed: -
(a)The file should be reviewed every three months; and
(b)You should seek to obtain such an agreement.
10. It is good practice to maintain: -
(a) a schedule of retention balances stating in each case the client(s) name(s), the file/ledger number, the amount of and the reason for the retention and the last date for release; and
(b) a separate note of the reason for the retention and the last date for release on the client ledger card.
Aborted or Delayed Transactions
11.Regular contact should be maintained with the client where the matter has either aborted or been delayed.
Part 2 - Obtaining Authority from the CLC
1.Requirement 12.2.6 of the CLC Accounts Code provides that money may be withdrawn from Client Account, where -
“the CLC has given written authority for a specific payment to a nominated payee”.
2. The CLC will consider giving this authorisation as follows: -
2.1 where the Aged Balance is less than £20.00:-
(a) the CLC must be provided with: -
(i) an Undertaking in the following terms: -
“In consideration of the CLC giving written authority in accordance with Requirement 12.2.6 of the CLC Accounts Code for the withdrawal of the monies set out in the schedule to this Undertaking (the “Annex”) I/We [names] undertake to the CLC that I/we shall within 14 days of a request from the Rightful Recipient pay the sum outstanding as set out in the Annex in accordance with this direction.”
(ii) the Annex which sets out in each case the client(s) name(s), the file/ledger reference, identifying the property to which the transaction related, the Rightful Recipient, the balance outstanding and the date of last movement;
(b) on receipt of the Undertaking the CLC may give written authority for withdrawal of the sums set out in the Annex from the client account;
(c) on receipt of the written authority from the CLC you can transfer the balances as set out in the Annex from client to office bank account providing the relevant entries have been made to a suitable office nominal ledger account e.g. “Write Offs” and places a copy of the authority issued by the CLC on the clients’ file.
2.2 Where the Aged Balance amounts to £20 or more but less than £100 the CLC must be provided with: -
(a) a schedule setting out in each case the client(s) name(s), the file/ledger reference, identifying the property to which the transaction related, the Rightful Recipient, the balance outstanding and the date of last movement;
(b) a copy of the client ledger card(s); and
(c) a signed certificate giving brief details of how the balance has arisen and stating you have taken all Reasonable Steps to trace the Rightful Recipient but have been unable to trace that person.
The Rightful Recipient is the person to whom monies held by the CLC Body on client account are correctly due.
2.3 Reasonable Steps’ are dependent on the particular circumstances and the sum involved. Examples are: -
•attempting to contact the Rightful Recipient at all known addresses, by all known telephone numbers and at any known e-mail address, or through Estate Agents;
•attempting to return funds using available bank or credit card details of the Rightful Recipient;
•contacting known friends/relatives of the Rightful Recipient;
•advertising in a local newspaper.
2.4 Where the Aged Balance is £100 or more the CLC must be provided with the information set out in 2.2(a) and (b) and, in addition: -
(a) details of the Reasonable Steps taken to trace the Rightful Recipient;
(b) brief details indicating how the balance has arisen; and
(c) any other information the CLC may request.
2.5 If authority is given by the CLC for a withdrawal under paragraph 2.2 or 2.4 it will only be on the basis that a cheque or funds transfer for the sum so authorised must be drawn on the client account payable to the CLC. On receipt, the cheque will be placed to the credit of the CLC’s Compensation Fund and utilised for the benefit of such Fund. You should place a copy of the authority issued by the CLC on the clients’ file.
2.6 Where the Rightful Recipient cannot be identified, the CLC will, in exceptional circumstances, give authority under Requirement 12.2.6 of the CLC Accounts Code for the withdrawal of funds from client account on the basis that a cheque or funds transfer for any sum so authorised must be drawn on the client account payable to the CLC. On receipt, the cheque will be placed to the credit of the CLC’s Compensation Fund and utilised for the benefit of such Fund. You should place a copy of the authority issued by the CLC on the clients’ file (or if this is not available in a central record hold it on a Durable Medium).
2.7 If the Rightful Recipient contacts you after funds have been paid into the CLC’s Compensation Fund you should contact the CLC with a view to the Rightful Recipient making a claim for reimbursement on the Compensation Fund unless the body is no longer trading in which case they should contact the CLC directly.
To be used in conjunction with Accounts Code.
Anti-Money Laundering Guidance
To view the printable PDF version, please click here.
To view the tracked changes to the guidance (as on June 2015 - for the latest consultation), click here.
To view the tracked changes to the toolkit (as on April 2015 - for the latest consultation), click here.
1. Overriding Principle 2 of the CLC Code of Conduct requires you to Maintain High standards of Work. The approach set out below aims to help you comply with that principle. You are not obliged to adopt this approach, but it offers you an example of the minimum commitment that the CLC considers is likely to be needed for compliance. Should you use the provided example as your starting point, it is likely that you would need to make amendments to ensure that it matches your particular circumstances. The procedures you adopt should apply a risk-based approach, taking into account the nature of your work, clients, and the number of employees.
2. For more detailed guidance on this please see the CLC’s Guidance on prevention of Money Laundering and Combating Terrorist Financing.
3. AML/CTF Example Policy
4. AML/CTF Example Procedure
5. AML/CTF Nominated Officer Example Policy
6. Training Records Example
7. Internal Reporting Form and Record of Decision Example
8. Wording to be incorporated into the Terms of Engagement Example
9. For Information - External Reporting
3. AML/CTF Example Policy
It is essential that that the business and its employees comply with the letter and spirit of this policy since failure to do so may amount to a criminal offence for which it is possible to be sentenced to a term of imprisonment.
1. As a business, we are committed to complying with the anti -money laundering
legislation, in particular the Proceeds of Crime Act 2002, the Terrorism Act 2000 (each
as amended) and the Money Laundering Regulations 2007.
2. We must at all times take steps to ensure that our business is not used to launder the
proceeds of crime or to assist terrorist financing.
3. We must explain to clients the need to obtain proof of identity and the limitations on
our duty of confidentiality to them either in our terms of engagement or otherwise in
4. We accept that the Nominated Officer has full autonomy in carrying out their duties.
5. We will ensure that you are given appropriate and regular training to help you comply
with AML/CTF, this policy and the procedures of the business.
6. We will communicate to you details of any types of business we have decided not to
7. We will regularly monitor and review our policies, procedures and training.
8. We require all of the business’s members to follow carefully the procedures set out in the Procedures Manual.
4. AML/CTF Example Procedure
It is essential that that the business and its employees comply with the letter and spirit of these procedures since failure to do so may amount to a criminal offence for which it is possible to be sentenced to a term of imprisonment.
1. You must not act or continue to act for a client until all requirements for Customer Due Diligence (CDD) or Enhanced Customer Due Diligence (EDD) have been met. If these cannot be met, you must
- not establish a new business relationship; or
- terminate any existing business relationship.
You must then consider whether to make an internal report to the Nominated Officer.
2. The purpose of CDD and EDD is to help you decide whether your clients are the persons they say they are and that you can:
- know with some certainty whether your clients are acting on behalf of another (called a beneficial owner)
- establish there is nothing to prevent you providing the service requested
- assess whether the purpose of the instruction is consistent with the lifestyle and economic means of your clients
- establish there are no obvious elements which suggest that any transaction is unusual or over complex in the context of those instructions.
3. Whenever instructed by any client you must obtain evidence as early as possible
- the client is the person he or she claims to be, for example, by a current signed passport or current UK photo driving licence; and
- a person of that name lives at the address given, for example, by a utility bill less than 3 months old or mortgage statement;
unless we already hold evidence of that client’s identity which is both relevant and up-to-date and there are no reasons to believe that any of the details have changed.
4. You should find out whether there is a beneficial owner in which case you must be
satisfied who that person is. A beneficial owner is the person who ultimately owns and
controls the client on whose behalf a transaction is being conducted (see further paragraphs 6.14 – 6.19 of the CLC’s Guidance for the Prevention of Money Laundering and Combating Terrorist Financing). There may be more than one. If the client is a company you must identify who owns 25% or more of the structure and who exercises effective management and control.
5. Further examples of acceptable ID evidence are set out in the Acting for Lenders and Mortgage Fraud Code and Guidance. Photocopies should always be certified as being true copies of the original and signed and dated by the person making the copies.
6. EDD checks must be made in any situation which by its nature can present a higher risk of money laundering or terrorist financing. The 2007 Regulations identify two specific examples where EDD must be carried out:
• where the client has not been physically present for identification purposes; or
• where the client is a Politically Exposed Person
7. The most frequent circumstance in which you must carry out EDD is likely to be when you do not meet your client at the time you establish and verify identity. In addition to the usual steps taken to verify identity for CDD, you should obtain at least one additional document of identity or verify identity electronically through [state specific source the business uses].
Checking identity by Electronic Means
8. You must obtain "satisfactory evidence of identity", which must be reasonably capable of establishing (and does in fact establish to the satisfaction of the person who obtains it) that the potential client is the person he claims to be. The CLC considers verification of identity by appropriate electronic means to be acceptable, though urges caution. Electronic evidence obtained should provide you with a strong level of certainty that any individual is the person they claim to be and that a person of that name lives at the address given using the client's full name, address and date of birth as its basis.
9. Any system or product used must be sufficiently robust to provide the necessary degree of certainty. Data accessed from a single source (e.g. the Electoral Roll) will not normally be sufficient on its own. Some databases will offer a higher degree of confidence than others.
10. Before using a commercial agency for electronic verification, you must be satisfied that:-
10.1 the information supplied by the data provider is considered to be sufficiently extensive, reliable and accurate; and
10.2 the agency has processes which allow its users to capture and store the information that they have used to verify an identity.
10.3 The process should be cumulative and you may consider it appropriate to seek additional evidence (e.g. a copy of a document bearing a signature and a date of birth) in all cases or, at least, where any client poses a higher risk of identity fraud, money laundering or terrorist financing, or where the result of any electronic verification check gives rise to concern or uncertainty over the client’s identity.
11. You may wish to consider whether the provider meets each of the following criteria, namely that it:-
11.1 is recognised to store personal data through registration with the Information Commissioner’s Office;
11.2 uses a range of positive information sources that can be called upon to link an applicant to both current and previous circumstances;
11.3 accesses negative information sources such as databases relating to identity fraud and deceased persons;
11.4 accesses a wide range of alert data sources; and
11.5 has transparent processes that enable you to know what checks were carried out, what the results of these checks were and what they mean in terms of how much certainty they give as to the identity of the subject of the identity enquiry.
12. Data from more robust sources where inclusion is based on proof of identity (such as government departments) ought to be included (under paragraph 11.2). Negative information checks (under paragraph 11.3) minimise the risk of impersonation fraud.
13. It is also important for:-
13.1 the process of electronic verification to meet a standard level of confirmation before it can be relied on. In circumstances which do not give rise to concern or uncertainty, the standard level would be expected to be:
(i) one match on an individual’s full name and current address and
(ii) a second match on an individual’s full name and either his current address or his date of birth.
If the result of a standard verification check gives rise to concern or uncertainty over the client's identity, the number of matches required to provide reasonable satisfaction as to his identity should increase.
13.2 You should ensure you understand the basis of the system you use in order to be satisfied that the sources of the underlying data reflect the CLC’s requirements and cumulatively meet the standard level of confirmation set out above as commercial agencies use various methods of displaying results (e.g. by the number of documents checked or through scoring mechanisms, etc).
Good Practice – Due Diligence
14. a) Ongoing management/review of relationships with third parties
b) Open source internet searches against other firms and its staff, including
adverse information published by any relevant regulatory bodies and credit
c) Scrutinising, clarifying and verifying the information received from parties
connected to the transaction, considering risks presented by new mortgage
d) Systems for checking the identity of foreign Clients
e) Checking that deposit/other monies or assets appear to be from a legitimate
f) Considering whether property valuations appear to be reasonable
g) If your Client changes while you are acting on a transaction, contact both
the old and the new Client so you understand the reason for the change of
Client and are satisfied that it appears to be for a legitimate reason
h) Electronic identification check with each Client as soon as instruction is
received; use a service provider accessing a unique system which matches
identity of Client using ID and verifying confidential information known only
to Client and provider.
15. You keep a record and take copies of all relevant documentation about the client’s identity and address and we must keep them for at least 5 years.
16. You make reasonable enquires and take copies of all relevant documentation relating to the source of funds and we must keep them for at least 5 years.
17. If you are not satisfied with the documentation or explanation you are given you should consider whether to make further enquires (either orally or in writing), where appropriate, seeking guidance from a supervisor or someone with more experience within the business.
18. Examples of Warning Signs which you should take into account in deciding whether to make an internal suspicion report are set out in the Acting for Lenders and Prevention & Detection of Mortgage Fraud Code and Guidance, paragraph 16, and include:
- secretive clients;
- involvement of unconnected third parties
- unusual instructions
- variance in signatures
- an existing Client asks you to rely on former identity checks i.e. ‘reliance’ exemptions
- where a Client is introduced by a third party who is not well known to the Authorised Person or the firm
- Client declines to be met or come to the office and/or uses an intermediary to communicate with the body and/or asks the body to contact him at his business or another address rather than at his home address
- the Client’s credit history is not aligned to their age (it might be longer or shorter than expected)
- monies paid by someone other than Client
- the transaction does not seem consistent with your knowledge of the Client’s financial position and income sources
- impatient parties putting pressure on you to complete the transaction quickly where the reason for urgency is not immediately apparent
- where another Authorised Person has previously been acting
- document not signed in front of you
- reliance on the diligence of another party
- discrepancies in value recorded in documents
- where a Client shares an address with one or more parties to the transaction
- overpayments of money.
No list of examples provided at any one time can ever be exhaustive and you will need to exercise your skill and judgment to assess any circumstances involved in a transaction which may seem to you or to an ordinary member of the public to be unusual or out of the ordinary.
19. You should not accept payments of cash in excess of [£100] either made directly to you or into the firm’s bank account.
20. If the nature of the transaction, the documentation or information you have been given would have aroused suspicions for a reasonable and honest Authorised Person, then you must immediately make an internal suspicion report in writing using our prescribed form to [name] who is our Nominated Officer (or in his absence [name]). [The business should suggest a procedure to support its employees when dealing with customer enquiries once a report has been made.]
21. Once you have made a report to the Nominated Officer, no further action should be taken regarding the transaction without the specific authority of the Nominated Officer.
22. You must not disclose your suspicions or the fact that you have made a report to the Nominated Officer to any other person, in particular the person who is the subject of such a report, since this may amount to “tipping off”, which is also serious criminal offence for which you could be imprisoned.
23. You must respond promptly to requests from the Nominated Officer for any further information.
24. Further CDD/possible warning signs/good practice guidance can be found in the Acting for Lenders and Prevention & Detection of Mortgage Fraud Code and Guidance – see, in particular, paragraphs 16 & 17.
5. AML/CTF Example Policy for the body’s appointed Nominated Officer
‘1. The business requires you as its Nominated Officer to comply with this policy in addition to complying with the business’s AML/CTF policy.
2. Failure to carry out your duties may cause you to commit a criminal offence.
3. You will have access to all files, records and information and be given sufficient resources and authority to fulfil the role and be allowed to carry out your duties without fetter, influence or interference.
4. Upon receipt of each internal suspicion report from any of the business’s members , you must acknowledge receipt in writing to the person making the report. You must then consider carefully whether a report should be made to the National Crime Agency (NCA).
5. You must make a report to NCA in the prescribed form where you have actual knowledge or suspicion, or where (based on what an ordinary member of the public might think) there are reasonable grounds to know or suspect a money laundering offence has been committed. You will need Consent from NCA for an ongoing transaction to proceed.
6. If you do make a report to NCA then you must ensure that you maintain regular telephone contact with them where Consent is required.
7. You must maintain a record of each decision you have made and keep it for at least 5 years whether or not you send a report to NCA.
8. You must support and advise members of staff who make internal suspicion reports to you, emphasising the implications for them of “tipping off”. In particular you must do this where you are waiting for Consent to proceed from NCA.
6. Example of AML/CTF Training Record
Details of training
Name of attendee
The signature of the attendee acknowledges that training has been received to satisfy the current requirements of the body’s AML/CTF policy.
7. Example of Internal Reporting Form and Record of Decision
‘Neither this form nor any copy is to be kept on the client file
Name of Person making report
Name of Nominated Officer
Name(s) of client
File Reference Number
Address of Property involved
Reasons for making the report
Signature of person making the report:
(To be completed by the Nominated Officer)
Additional information requested
External report: Yes / No
Reason for decision
Signature of Nominated Officer
8. Example of wording to be incorporated into the Terms of Engagement
8.1. Proof of Identity
We must by law obtain satisfactory evidence of your identity and address. Please help us to do so by giving us the information and documentation we ask for. We are unable to proceed with your transaction and will not be able to exchange contracts until this has been provided.
As lawyers, we are under a general professional and legal obligation to keep your affairs private. However, we are required, by current legislation, to make a report to the National Crime Agency (NCA) where we know or suspect that a transaction involves Money Laundering or Terrorist Financing. By instructing us to act on your behalf in accordance with these terms of engagement you give us irrevocable authority to make a disclosure to NCA if we consider it appropriate.
8.3. You agree that this authority overrides any confidentiality or entitlement to legal professional privilege. We shall be unable to tell you if we have made a report.
---------------------------------------------End of Examples -------------------------------------------------------
9. External Reporting Form
9.1. A copy of the current Suspicious Activity Report (SAR) may be accessed on the website for the National Crime Agency by following the links at http://www.nationalcrimeagency.gov.uk/ and downloading the form. Alternatively, a SAR may be filed electronically by registering for and activating the On-line service on the “Reporting SARs” button.
9.2. For information or assistance with submitting SARs, SARs online queries, consent issues or general Financial Intelligence Unit matters telephone the UK Financial Intelligence Helpdesk on 020 7238 8282 and select the appropriate option. For general UKFUI matters email firstname.lastname@example.org . Contact details: http://www.nationalcrimeagency.gov.uk/contact-us/reporting-suspicious-activity-sar.
email@example.com . Contact details: http://www.nationalcrimeagency.gov.uk/contact-us/reporting-suspicious-activity-sar.
To be used in conjunction with Anti-Money Laundering & Combating Terrorist Financing Code.
For the printable PDF version, please click here.
1. We have adopted the Legal Ombudsman’s definition of a complaint. Please see this Handbook’s Glossary. 2. Contact information for Legal Ombudsman:
Tel no: 0300 555 0333
Website: www.officeforlegalcomplaints.org.uk or www.legalombudsman.org.uk
PO Box 6806
3. The Legal Ombudsman can normally only investigate a complaint if it has already been through your own complaints procedures. If the ombudsman receives a complaint concerning you/the body which has not been through your complaints process, it will be referred to you to be dealt with in the first instance. It is therefore acceptable for you to include the following terms in any complaints procedure,
“Unless it agrees there are good reasons not to do so, the Legal Ombudsman will expect you to allow us to consider and respond to your complaint in accordance with the procedure set out above, before they will consider it.”
4. The Legal Ombudsman can accept complaints up to 6 years from the date of the act/omission or 3 years from when the complainant should have known about the issue. The complainant may also refer their complaint to the Legal Ombudsman if your own complaints process has taken 8 or more weeks to complete.
5. The Legal Ombudsman’s jurisdiction covers service-related complaints; the ombudsman will refer any conduct-related complaints to the CLC.
6. The Legal Ombudsman will charge a case fee (currently £400) if the complaint is upheld following a formal determination.
Requirements of the Code
1. Should your response timescales be shorter than those identified in the Code we would not require you to alter them.
2. Provision must be made for complaints to be made by any ‘reasonable means’; determination as to what constitutes ‘reasonable’ is at your own discretion, taking into account the body’s size, profile and clients, though we would expect the minimum provision to be in person, telephone and by letter. NB. Bodies may wish to also provide Customer Feedback Forms and provide for complaints to be made via the body’s website.
3. For the avoidance of doubt, item 4 of the Code (CoC P6e), requires that all stages of the complaints procedure are free; should the Legal Ombudsman not uphold a complaint escalated to it, the body cannot charge the client for any costs it incurs in investigating that complaint and its handling of it.
Overriding Principle 6 of the CLC Code of Conduct requires you to promote equality of access and service. The Procedure template below aims to help you comply with that principle. You are not obliged to adopt this approach, but it offers you an example of the minimum that the CLC considers is likely to be needed for compliance. Should you adopt the procedure, it is likely that you would need to make amendments to ensure it works with the number of your employees, the nature of your work and your Clients e.g. sole practitioners should only have complaint determination review arrangements in place with other bodies if the review would be carried out in a timely manner. NB. If you do not have a review system in place, the complainant should be referred directly to the Legal Ombudsman.
Complaints Example Procedure
If you have any complaint about the way in which your matter has been dealt with this is the procedure which will be followed:
A complaint is an oral or written expressions of dissatisfaction which alleges that the complainant has suffered (or may suffer) financial loss, distress, inconvenience, or detriment.
We aim to resolve any complaint you have about the service we have given you as quickly as possible. If you are unable to sort things out with the person who has been dealing with you please contact [name, contact details]. [Alternatively, for a sole practitioner – If you are unable to sort things out with me please let me know in writing and I shall ask [name, contact details] to look into your complaint for me].
Once we have received your complaint, [name above] will write to you within 7 days to explain how your complaint will be investigated if a complete response to your complaint has not been made by that time. You will be told the latest date by which a complete answer will be given to your complaint (this should be not more than 28 days after we received your complaint). If you have made the complaint verbally - either at a meeting or on the telephone - we will set out in our full response our understanding of the nature of your complaint
The assessment of the complaint will be based upon a sufficient and fair investigation. We will explain in writing our findings and where the complaint is upheld will offer remedial action or redress. This will be actioned promptly.
[If you are dissatisfied with any aspect of our handling of your complaint, please feel free to contact [name, contact details], who will conduct a separate review of your complaint [Alternatively, for a sole practitioner – If you are dissatisfied with the way your complaint is handled please let me know in writing and I shall ask [name, contact details] who will conduct a separate review of your complaint for me.] You will be told about the conclusion of this review within  days.
If after following the review process you remain dissatisfied with any aspect of our handling of your complaint, you may contact directly the Legal Ombudsman to ask them to consider the complaint further:
Tel no: 0300 555 0333
Email:firstname.lastname@example.org mailto:Website: http://www.legalombudsman.org.uk/
PO Box 6806
Unless it agrees there are good reasons not to do so, the Legal Ombudsman will expect you to allow us to consider and respond to your complaint in accordance with the procedure set out above in the first instance. You can refer your complaint up to 6 months after you have received our final written response to your complaint. You can also use the Ombudsman service if we have not resolved your complaint within 8 weeks of us receiving it. A complaint can be referred to the Legal Ombudsman up to six years from the date of the act or omission or up to 3 years after discovering a problem. The ombudsman deals with service-related complaints; any conduct-related complaints will be referred to the Council for Licensed Conveyancers.
Alternative complaints bodies such as Ombudsman Services www.legalombudsman.org.uk exist to deal with complaints about legal services should both you and our firm wish to use such a scheme.
We (state whether you do or do not) agree to use (include name of scheme).
This section provides you with guidance and examples of good practice, which you are not required to adopt but which you may wish to consider.
1. Learning from complaints is an essential part of overall customer care. Complaints data provides you with a useful ‘business barometer’ to prevent recurrence of similar-themed complaints, identify any training needs and increase client satisfaction. To this end, you may wish to record complaints by themes or categories which are useful to your business.
2. It is good practice to offer access to a review of how a complaint was handled. If you are the body’s only Manager you may wish to arrange for another firm to carry out a separate review of the complaint. Any review should be completed within 28 days of the request for the separate review and should not inconvenience the complainant.
3. It is considered good practice for the senior management to review complaints trends. Lessons can then be learned and applied across the organisation, creating an environment in which complaints are seen as opportunities to improve systems and services. It is also considered good practice to periodically review the complaints-handling process to identify if there are any improvements needed.
4. Complaints enable staff to develop a better understanding of the service user’s point of view. All staff should be aware of the complaints procedure and take complaints seriously. If complaints identify a systemic issue it may be appropriate to organise staff training to address it. Some organisations recognise and reward those members of staff who handle complaints well.
5. It is beneficial for staff to feel that their complaints-handling procedures support them. It would be in their interests if the procedure meant that any accusations made against staff were known only to them and to those investigating the complaint. It is likely to be beneficial to the body if its staff – and if possible, its clients - are involved in developing complaints procedures.
6. To enhance the accessibility of your complaints process you could give consideration to clients being able to lodge a complaint via your website; allowing someone else to make the complaint on behalf of a vulnerable client; and providing the complaints procedure in large print. This list is certainly not exhaustive; procedures should be tailored to the needs of clients wherever appropriate.
7. Some organisations produce customer feedback leaflets which include an overview of the body’s complaints procedure and sometimes a complaint form or slip. Others survey complainants to gauge satisfaction with the complaint-handling process. Below are some possible questions which those considering customer satisfaction surveys may find useful.
Possible ‘How well did we do?’ Survey Questions
- How did you find out about our complaints procedure?
- Was the complaints procedure information useful and easy to understand?
- How did you initially contact us with the complaint?
- What was the nature of your complaint?
- Did staff make you feel it was okay to make a complaint?
- Were you given a clear explanation of the complaints-handling process?
- Did you need help from us to make your complaint? If yes, did you get it?
- Did we keep you well-informed about the progress of your complaint?
- Did you find our staff helpful in dealing with your complaint?
- Did you feel the complaint was dealt with quickly enough?
- Did you feel the investigation into your complaint was thorough?
- Did you feel the investigation into your complaint was conducted fairly?
- Did you feel we understood your complaint?
- Was our response meaningful?
- Was our response easy to understand?
- Did our response address all the points you had raised?
- After the investigation into your complaint did we do what we promised?
- Were you satisfied with the final outcome of your complaint?
- How do you rate your overall experience of the complaints process?
- Do you have any suggestions as to how we could improve how complaints are dealt with?
- Do you feel that your age, disability, ethnicity, gender, race, religion or sexuality led to any barrier in accessing the complaints procedure?
- Do you feel that age, disability, ethnicity, gender, race, religion or sexuality adversely impacted upon how your complaint was dealt with?
- Do you have any additional comments?
Some also profile the complainants to determine if there is a particular equalities group which feels disproportionately dissatisfied with the process.
8. In addition to complaints, any compliment and comments you receive provide you with an opportunity to learn what is working well, as well as what isn’t. It may be appropriate to publicise these to staff so they know what customers want e.g. displaying thank-you letters, promoting service improvements made as a result of complaints.
To be used in conjunction with Complaints Code.
Conflicts of Interest Guidance
To view the printable PDF version, please click here.
Assessment of circumstances
1. You should assess all relevant factors to determine if there is a conflict of interest between Clients. For instance, if there is an imbalance in bargaining power between the Clients, or a Client is vulnerable, or their interests are markedly different and cannot be reasonably reconciled.
2. You should assess all relevant factors to determine if there is a conflict of interest between yourself and a client. For instance, if there is a financial interest or a personal or commercial relationship.
Arm’s length transactions
3. A body may act for two or more Clients in an arm’s length transaction for value where each Client is represented by a different Authorised Person, except where a conflict of interest arises:
a) A matter will not generally be regarded as an arm’s length transaction
where the parties are related by blood, adoption or marriage or in a stable relationship (e.g. a cohabiting couple or the parties otherwise treat each other as family members).
b) The determining factor is not the specific relationship but the existence of any inequality of influence or disproportionate bargaining power which may give rise to a conflict of interest between the Clients.
4. You must consider carefully whether a conflict of interest arises or is likely to arise when the body receives instructions to act for different Clients in the same matter where the seller is:-
(i) a developer or builder; or
(ii) a lessor granting a lease
To be used in conjunction with Conflicts of Interest Code.
Dealing with Non-Authorised Persons Guidance
To view the printable PDF version, please click here.
The Effect of s.14-16 Legal Services Act 2007
1. It is an offence for a person who is not an Authorised Person and is not an Exempt Person to carry out Reserved Legal Activities.
2. Where a Non-Authorised Person carries out reserved legal activities, the Non-Authorised Person’s client is likely to be guilty of aiding and abetting the offence. The Authorised Person acting for the other party may also be guilty of procuring the commission of an offence by inviting or urging the Non-Authorised Person to provide a draft contract or transfer or to progress the transaction.
3. An undertaking offered by a Non-Authorised Person should not generally be accepted as it is not enforceable in the same way as an undertaking given by you or by another Authorised Person.
4. You should first check with the CLC, the Law Society or other Approved Regulator whether a person is an Authorised Person entitled to provide reserved instrument activities, as required by paragraphs A3.2 and B3.2 of the CML Handbook, or is otherwise an Exempt Person (schedule 3 2007 Act).
5. If unable to obtain that confirmation you should write immediately:-
(a) to the Non-Authorised Person:-
(i) asking for an explanation why the prohibition under s.14-16 2007 Act does not apply to them; and
(ii) stating that in the absence of such explanation you cannot enter into any dealings with him unless there is clear evidence that no offences will be committed. An example of clear evidence would be a letter from an Authorised Person confirming that he will prepare the relevant documents;
(b) to your own client explaining why you can not deal with the Non-Authorised Person unless clear evidence is forthcoming.
Conveyancing - Acting for the Buyer
6. You should consider the following and, if appropriate, amend the contract:-
(a) replies to the Property Information Questionnaire and all other preliminary enquiries and requisitions signed by the seller;
(b) the deposit must be paid to you as stakeholder. If the seller will not agree to this, it may be possible to agree to place the deposit in a deposit account in the joint names of you and the seller;
(c) either the seller must attend personally at completion, or an authority must be handed over on completion signed by the seller for the purchase money to be paid to his agent. The reason for this is that the protection provided by s. 69 Law of Property Act 1925 only applies when a document containing a receipt for purchase money is handed over by a Recognised Body or solicitor, or the seller himself;
(d) deeds and keys are given to the person entitled to receive them (the buyer). If an authority on behalf of the buyer is offered to you, it is for you to decide whether or not to accept it, bearing in mind that no authority, however expressed, can be irrevocable;
(e) The purchase money, including any deposit, is paid either to the seller or to the seller’s properly authorised agent.
Conveyancing - Acting for the Lender
7. You are not obliged to undertake work which would normally be carried out by the borrower’s legal adviser (such as drafting and preparation of the instrument of transfer). However, it is essential to the lender client that good title is transferred to the borrower.
8. Compliance with s. 69 Law of Property Act 1925 may mean that you require either that the borrower to attend personally on completion, or that a signed authority from the borrower in favour of his agent is received on completion.
9. On completion, title documents should normally be handed over to the borrower.
To be used in conjunction with Dealing with Non-Authorised Persons Code.
To view the printable PDF version, please click here.
This guidance aims to help you deliver these Outcomes by providing you with an overview of the effect of the Equality Act. You should refer to the Act itself in determining what steps are appropriate and reasonable for you to take in meeting the Act’s requirements.
Government Equalities Office - Equality Act 2010
Scope of the Equality Act 2010
1. The Equality Act 2010 received Royal assent on 8 April 2010. The Act not only amalgamates existing discrimination law but strengthens the law by:
- protecting a broader range of characteristics, and
- extending the duties regarding age, sexual orientation and religion or belief.
Characteristics protected by the Act
2. The Act protects the following characteristics: age, disability, gender reassignment, marriage and civil partnership, pregnancy and maternity, race, religion or belief, sex and sexual orientation:
A person belonging to a particular age group. This applies to both young and older people, though much of the Act’s emphasis is upon equality for older people.
A person has a disability if they have a physical or mental impairment, and the impairment has a substantial and long-term adverse effect on their ability to carry out normal day-to-day activities. This can also apply to a person who has previously had a disability.
A person is proposing to undergo, is undergoing or has undergone a process (or part of a process) for the purpose of reassigning the person’s sex by changing physiological or other attributes of sex. A transsexual person is a person who has the protected characteristic of gender reassignment.
Marriage and civil partnership
A person who is married or is a civil partner. This does not include someone who is engaged or a divorcee or person whose civil partnership has been dissolved.
Pregnancy & Maternity
This includes any illness the woman may suffer as a result of the pregnancy.
Covers the period from when the pregnancy begins to 26 weeks after she has given birth.
Includes colour, nationality and ethnic or national origins.
Religion and Belief
Any religion and includes a lack of religion. Belief means any religious or philosophical (not political) belief and includes a lack of belief.
A man or a woman.
A person’s sexual orientation towards—
(a) persons of the same sex,
(b) persons of the opposite sex, or
(c) persons of either sex.
What does this all mean for me?
3.1 You must ensure that service delivery and if you are an employer, employment arrangements, provide equality of opportunity and experience for individuals or groups with the protected characteristics.
3.2 You must not discriminate, victimise or harass anyone on the basis of the protected characteristics. Terms in contracts, collective agreements or rules of undertakings are unenforceable/void if they result in unlawful discrimination or victimisation. In some circumstances, employers are explicitly liable for harassment by third parties in the workplace.
3.3 You are required to make reasonable adjustments to prevent a person with a disability being placed at a disadvantage from someone who does not have a disability. An adjustment can be a one-off, physical, action such as making premises more accessible, or it may be an adjustment which is made on numerous cases, such as visiting a client at home if they are unable to access your premises.
3.4 You are not permitted to ask job applicants questions related to health or disability prior to offering a position (unless the questions are made for prescribed relevant reasons).
3.5 You cannot discriminate against someone because they are perceived to have, or are associated with someone who has, a protected characteristic e.g. carers. NB. This is bolstered by the concept of ‘discrimination arising from disability’.
3.6 The enforceability of pay secrecy clauses is limited.
3.7 Tribunals are able to make recommendations that will affect all of an employer’s staff, not just the claimant.
3.8 The Act also repeals or replaces rules of family property law which discriminated between husbands and wives.
What is meant by discrimination, harassment and victimisation?
4. This table provides an overview of each term:
A person is treated less favourably than another person because of their age, disability, marital status, race, religion or belief, sex, or sexual orientation.
Includes less favourable treatment because of the victim’s association with someone who has that characteristic (e.g. is disabled), or because the victim is wrongly thought to have it (e.g. a particular religious belief).
A requirement or condition has a disproportionately adverse effect on a particular equalities group and cannot be objectively justified.
A person is treated less favourably than other persons because they have made allegations of discrimination or harassment.
A person feels that the behaviour of another has violated their dignity, or created an intimidating, hostile, degrading, humiliating or offensive environment for them.
5.1 You have a duty, wherever reasonable, to remove barriers which would place a disabled person at a substantial disadvantage due to:
a) a provision/criterion/practice (PCP) e.g. making information available in an accessible format, such as large print;
b) a physical feature e.g. making premises accessible; or
c) the absence of an auxiliary aid or service e.g. providing special computer software for a disabled employee.
5.2 The cost of a reasonable adjustment must be incurred by the business and cannot be passed onto a disabled client by way of a disbursement or additional charge.
5.3 The definition of what constitutes ‘reasonable’ is based upon a ‘substantial
disadvantage’ or ‘unreasonably adverse experience’ threshold.
6. A provider of services to the public or a section of the public (for payment or not) must not discriminate, harass or victimise a person requiring the service.
7.1 Employers must not discriminate, harass or victimise any person in their employment arrangements, offers, terms and opportunities for promotion, transfer or training (or for any other benefit, facility or service).
7.2 As an employer you are responsible for the actions of your employees and as a manager you are responsible for the actions of agents.
8. A firm or proposed firm must not discriminate, harass or victimise any person in its partner arrangements, offers, terms and opportunities for promotion, transfer or training (or for any other benefit, facility or service).
Limited liability partnerships (LLP)
9. An LLP or proposed LLP must not discriminate, harass or victimise any person in its partner arrangements, offers, terms and opportunities for promotion, transfer or training (or any other benefit, facility or service).
10.1 You must not discriminate or harass where the discrimination or harassment arises out of, or is closely connected with, the end of a service or employment relationship.
10.2 You must not instruct, cause, induce or aid another party to contravene their responsibilities under the Act.
11. The Equality Act abolishes the presumption of advancement, by which, for example, a husband is presumed to be making a gift to his wife if he transfers property to her, or purchases property in her name.
Human Rights Act 1998
12. You should also be mindful of the Human Rights Act which incorporated the European Convention on Human Rights into English Law. The basic human rights protected by this legislation include:
- the right to liberty;
- the right to a fair trial;
- the right to respect for private and family life;
- freedom of thought, conscience and religion, and freedom to express your beliefs;
- freedom of expression;
- freedom of assembly and association; and
- the right not to be discriminated against in respect of these rights and freedoms.
13.1 The CLC will investigate concerns relating to discrimination and disciplinary proceedings will be taken if it is satisfied that there is a case to answer.
13.2 Where a court or tribunal decides that you have committed an unlawful act of discrimination that finding will be treated by the CLC as a breach of the Overriding Principle to Promote Equality of Access and Service.
Equality – Example Policy
Principle 6 of the CLC Code of Conduct requires you to promote equality of access and service. The Policy template aims to help you comply with that principle. Whilst you are not required to have a written policy, we expect you to act in a way which is consistent with the Example Policy. Should you use the provided example as your starting point it is likely that you would need to amend this policy to ensure that it matches your particular circumstances. The policy you adopt should take into account the number of employees, the nature of your work and your Clients.
Equality & Diversity Policy [Example]
1. Our commitment
We are committed to:
- recognising diversity;
- preventing and tackling unlawful discrimination;
- promoting equality of opportunity for all our clients and staff; and
- providing an equally high standard of service to all clients, irrespective of their age, disability , marital status, race, religion or belief, sex (including people who have had gender reassignment), or sexual orientation;
- making reasonable adjustments so a person with a disability is not placed at a substantial disadvantage to a person without a disability;
- all stakeholders and employees complying with the commitments of this policy.
2. We will comply with Principle 6 of the CLC Code of Conduct which requires us to promote equality and diversity, and with the duties of the Equality Act 2010.
3. We will neither enable nor tolerate any of the following:
A person is treated less favourably than another person due to their age, disability, marital status, race, religion or belief, sex, or sexual orientation.
A requirement or condition has a disproportionately adverse effect on a particular equalities group and said requirement/condition cannot be justified.
A person is treated less favourably than other persons because they have made allegations of discrimination.
A person feels that the behaviour of another has violated their dignity, or created an intimidating, hostile, degrading, humiliating or offensive environment for them.
4.1 We will ensure that no individual client, or a client group, is discriminated against in accessing our services and functions or in the quality of service provided.
4.2 Instructions will not be refused on the basis of unlawful discrimination.
4.3 Our complaints handling-process is responsive to Client’s individual needs (particularly those that are vulnerable or have disabilities).
5.1 We will ensure that all partners, employees and applicants have equal employment opportunities. Our recruitment, appointment, appointment terms and conditions, promotion, training and benefits opportunities will not be discriminatory.
6. Policy Implementation & Evaluation
6.1 A senior member of staff is responsible for the implementation of this policy and ensuring all employees are aware of their duties under it, providing training and information as appropriate.
6.2 This member of staff will monitor the extent of compliance with this policy across the organisation. Appropriate data will be collected to inform this review.
6.3 Allegations of discrimination will be investigated under our grievance procedures. We will take such allegations very seriously and where an employee or stakeholder is found not to have complied with the policy we will take disciplinary action against them.
6.4 We will provide training to ensure staff are aware of their responsibilities under this Policy.
6.5 This policy will be updated as legislative and regulatory requirements are revised, in light of lessons learned by the business and in view of any good practice identified.
1. Equality is about providing everyone with the same level of fairness i.e. an equal chance to contribute and participate. Diversity is about understanding and treating people as individuals i.e. recognising difference.
2. The recognition of diversity and promotion of equality should not be an additional consideration but an intrinsic element of any business as it can bring great benefits and economic advantages - increasing your capacity to serve a diverse client base, offering clients a range of skills sets and attributes, and the opportunity to harness creativity and continously improve and enhance your reputation as both an employer and a service provider – but it is only when a body’s cultural ethos and structural factors recognise this that these benefits can truly be felt. The following section highlights some principles of good practice that you may wish to consider adopting in order to feel these benefits.
3. It is important that the implementation and success of an organisation’s Equality & Diversity Policy is systematically monitored, reviewed and evaluated. The policy is only likely to be successful if it is accompanied by a diversity training plan and communications plan which embeds diversity within the organisation’s culture. This may include education provision to ensure senior partners/ managers are aware of the benefits of diversity and providing frontline staff with training to equip them for dealing with the different needs of a diverse range of clients.
Flexible and part-time working
4. Working parents and carers (and those who are applying to care for a child) have the statutory right to request flexible working. It is likely to benefit both staff and the needs of the business if flexible and part-time working patterns are available on request to all staff, not just those with child care responsibilities.
5. Arrangements might include four-day weeks or nine-day fortnights, working from home, working hours other than 9 to 5, career breaks, sabbaticals, or longer periods of unpaid leave over the summer months,
6. Provision of such arrangements can help you retain existing staff (who feel that the business allows them to achieve an appropriate work/life balance) as well as recruit new staff (who are drawn to you as an employer who provides such arrangements). It can also enable the business to better meet the needs of clients e.g. open for business at times other than Monday to Friday 09.00-17.00.
7. Provision of such arrangements should be positively promoted. It is important that these working patterns are not equated with lesser commitment, meaning those choosing to work flexibly are penalised for doing so i.e. adoption of flexible working patterns should not adversely impact upon an individual’s career progression – transparent work allocation and promotion procedures will aid this - and terms/targets/ workloads should be rearranged appropriately.
8. The combination of an outreach programme and provision of formal support networks and mentoring schemes (as opposed to informal mentoring which can cause, or reinforce, diversity-based segmentation and segregation) can help make entry into, and retention and progression within, the legal profession less challenging for those from ‘non-traditional’ backgrounds. Where such schemes are in place they should be evaluated to determine their effectiveness.
9. If your firm offers internships, or is thinking of doing so, you should give consideration to adopting the Common Best Practice Code for Quality Internships as signed up to the Gateways to the Professions Collaborative Forum. The Code seeks to deliver internships which are transparent and open to all, irrespective of background.
10. Equality accreditation and organisational assessment schemes - such as those provided by Cornwall Diversity Toolkit, Stonewall Diversity Champions Programme , Job Centre Plus Two Ticks Disability Scheme , the Working Families Charity, Back to Work Company and the jobs recruitment website Where to Work - can assist you in benchmarking your procedures against best practice as well as giving the business external endorsement of its diversity credentials.
11. All CLC-regulated firms are required to participate in the biennial diversity profiling of the regulated community. The firm must publish a summary of the firm’s profile, the details of which will be prescribed by the CLC at the time of profiling. The summary provides potential staff and clients with information on the representative nature of the business and will help you identify any under-representation at varying stages of recruitment and career progression, indicating areas where action may be needed to address under-representation.
12. Equality Impact Assess every major activity or policy decision you plan to undertake, enabling you to ensure that in delivering the outcomes you intend does not have an unintended consequence on, or create an unnecessary barrier to, different groups. The local government website gives you an overview of Equality Impact Assessments, but you may wish to develop your own toolkit.
To be used in conjunction with Equality Code.
Estimates and Terms of Engagement Guidance
To view the printable PDF version, please click here.
1. It is advisable to set out the likely fees to be incurred in an estimate rather than in a quotation since a quotation will be treated as a fixed price contract which cannot be varied notwithstanding any provision in the Terms of Engagement to the contrary.
Terms of Engagement
2. It is good practice for Terms of Engagement to include:
- authority for you to retain or destroy the contents of a Client’s file or transfer the data onto another Durable Medium (see Transaction Files Code & Guidance, paragraph 5 of the Example Approach)
- The wording suggested at Chapter 8 of Combating Anti Money Laundering and Terrorist Financing Code and Guidance – Example of Wording to be incorporated into the Terms of Engagement.
To be used in conjunction with Estimates of Terms of Engagement Code.
See also the Mortgage Fraud Guidance.
Management and Supervision Arrangements Guidance
To view the printable PDF version, please click here.
1. The way in which arrangements ensure compliance with the Code of Conduct (and thereby, all regulatory arrangements) is a matter for the individual entity However, each entity must be able to show that arrangements are in place and are operating to a level which satisfies the CLC it is compliant.
2. Proportionate arrangements are likely to be the most effective (e.g. arrangements which are unnecessarily convoluted, or are judged ineffective or untargeted, may mean they aren’t used). Factors in determining the appropriateness of the entity’s arrangements will include its size and structure; the number, experience and qualifications of staff; and the nature of work undertaken; and the mechanism for periodic review of their effectiveness.
Business Arrangements – good practice examples
3. Supervision and quality assurance arrangements are in place across the organisation. Examples of these include (but are not limited to): misconduct; regulatory responsibilities and failures; and risk management (see elsewhere in this Code). The arrangements are recorded, published, reviewed and communicated to staff.
NB. See also the Accounts, Complaints, Conflicts of Interest, Transactions Files, and Undertakings Codes and Guidance.
4. The recruitment, selection and employment arrangements are periodically reviewed to help ensure an unfit and improper person (who could compromise the interests of the public and clients) is not employed.
5. Training arrangements, including Continuous Professional Development provisions, enable all employees to maintain a level of competence appropriate to their work and level of responsibility. Content of training is responsive to business objectives, regulatory responsibilities and skills gaps. Consideration is given to which training format (e.g. training course attendance or delivery, work shadowing) is best suited to both the subject matter and the target audience.
6. Published Compliance policies promote ethical practise, encourage the body and its staff to act in a way which is compatible with the regulatory requirements.
7. Staff are aware how, and to which named individual, they can raise concerns of non-compliance or wrong doing. They are encouraged to raise concerns, feel able to do so, and they are confident these will be acted upon appropriately and they will not be victimised for raising them.
8. An anti-bribery and corruption policy sets out what isn’t acceptable and makes clear whom staff should contact if they are suspicious of an activity, conduct or gift.
9. Regular reviews of financial management reports at both department and firm level.
10. A client care policy sets out what clients have the right to expect. It includes timeframes within which a response to a query or approach needs to be made. Training is given on the policy.
11. Feedback, both proactively gathered and otherwise procured, informs the development of the business.
12. A communications policy sets out how the entity ensures all communications, including emails, of a high standard.
13. A firewall program, and/or other device helps to keep the network secure.
14. Depending on the nature and structure of the entity, factors in determining whether work is being effectively supervised are likely to include the:-
(a) size of the business and the number of offices;
(b) number of Authorised Persons available to supervise each office/ ratio of Authorised Persons to non-Authorised Persons;
(c) volume and nature of the work undertaken (e.g. more intensive supervision given to those who provide substantive advice rather than routine or administrative work);
(d) number, competence, training and duties of unqualified staff;
(e) arrangements for an Authorised Person to monitor incoming and outgoing communications; and
(f) different working practices of both teams and individuals.
15. The Social Mobility Toolkit for the Professions provides case studies and good practice examples regarding mentoring, careers advice and internships.
Supervision Good practice examples
16. An organisational chart is published to staff. This clearly sets out the governance structure, identifies decision makers, their responsibilities, and reporting lines.
17. Protocols/guidance set out how formal supervision and appraisal sessions are scheduled, recorded and reviewed; and roles, responsibilities and training requirements are identified.
18. Supervision sessions enable both supervisor and supervised to give feedback. Supervised individuals are enabled to take some responsibility for their own development. The entity may also operate a mentoring scheme.
19. Risks can take many forms and may be regulatory, strategic, operational or other. Categorisation of identified risks is likely to assume a form of the following:
a) those which can be tolerated, or transferred;
b) those which need to be treated; and
c) those which must be terminated.
20. Effective risk management is likely to require a risk register and action plan. Risk assessment processes often employ both a probability (or likelihood) and impact rating which looks at the likelihood of the risk occurring; and the arrangements currently in place, or those needed, to prevent or reduce this. A red, amber and yellow ranking (or other) may then be applied, which prioritises the termination of the highest (red) risks.
Good practice examples
21. Risks to the achievement of regulatory responsibilities – in particular the delivery of the positive outcomes identified in the Code of Conduct - are systematically identified, centrally recorded, evaluated, monitored and managed . These arrangements are periodically reviewed to:
a) verify that all risks to critical activities and supporting resources have been identified; and
b) the arrangements continue to reflect the organisation’s objectives, are fit for purpose and appropriate to the types and levels of risk the organisation faces.
22. A senior manager is responsible for the risk management arrangements. A quarterly risk assessment, which contains risk reports from all teams, is submitted to the senior management team. See also the risks guidance accompanying the Transaction Files Code.
23. Staff receive training on the entity’s risk management arrangements. This includes information on risk types and how to identify, capture, assess and mitigate them.
24. A senior person is designated as the data protection lead. The entity’s information security provisions are periodically reviewed to ensure compliance with the Data Protection Act 1998.
25. It is up to you how you ensure the provider is made aware of your regulatory responsibilities and their duty to support them. This might take the form of a contract which specifies this and which includes explicit arrangements for providing us with inspection access (if needed), as well as how the agent will ensure client information security, confidentiality and quality provisions are of a high quality standard. The outsourcing arrangements are likely to benefit from periodic review and consideration within both the risk matrix and the Business Continuity Plan.
26. There are multiple, often interconnected ways in which external disruptions can affect the critical activities required to deliver your key services. Business continuity risks include (but are not limited to):
- contagious illness;
- disruption to office (e.g. fire, flood, evacuation of building);
- legal requirements (and penalties)
- loss of key staff or data;
- loss of utilities (e.g. water, gas and electricity);
- market changes;
- negligence claims;
- key suppliers/outsourcing agent risks (e.g. financial vulnerability, service quality threats, office disruption);
- prolonged power loss;
- random failure of critical systems;
- regulatory requirements (and penalties);
- sabotage (insider or external threat);
- special/tailored software or other unique purchase;
- systems (e.g. IT or communications) failures; and
- theft (this might pertain to material items, vital information, or other).
Those new to business continuity risk management may find the Direct Gov Business Continuity Management Toolkit a useful starting point.
Good Practice examples
27. A hard copy list of, and contact details for, persons to be contacted in the event of an emergency is kept both on-site and off.
28. A senior member of staff has responsibility for continuity of the business in emergency (or other extenuating circumstances). Individual persons are named as responsible for particular tasks should such circumstances arise.
29. Periodic continuity risk assessments inform a written Business Continuity Plan (BCP) and improvement plan. The assessments and BCP are updated in light of relevant changes such as organisational restructuring or external environment/market changes.
30. The BCP includes both prevention and recovery provisions (e.g. office relocations, data back-ups, fire-drills) and quantifies the resources required over time (e.g. 24 hours, 2 days, 1 week, 2 weeks) to maintain critical activities at an acceptable level. Resources are likely to include people, premises, technology, information, supplies and partner businesses. The BCP, and systems (e.g. back-up power, communications equipment, information management, contact list and evacuation processes), are periodically tested.
31. The BCP is communicated to staff through a training and awareness-raising programme. In the event of an emergency, employees and customers are provided with ongoing communications and (safety) briefings.
Business Continuity - Sole Practitioners
32. The risk to business continuity and to the interests of both the business and its clients presented by an emergency such as incapacity or death is particularly relevant to sole practitioners. The guidance below is intended to highlight issues which may arise and to provide possible solutions. However, it is up to you to decide what options best suit your own circumstances and which will enable the business to continue to deliver positive Outcomes for Clients even in exceptional circumstances/an emergency.
33. You may determine that specific Indemnity Insurance arrangements would be beneficial to cover the possibility of continuity being threatened by an unforeseen circumstance.
34. In the event of a planned absence, Clients should be told who will be dealing with their matter.
35. Should you become unable to manage the business, and need to appoint an attorney the agreement is likely to benefit from being proportionate, reciprocal and subject to periodic review.
36. Consideration should be given as to whether the Attorney is an Authorised Person or legally qualified only; and whether they deal with the affairs of the clients, as well as your personal and business affairs, or you appoint different individuals to manage personal affairs and those of the business.
37. Consideration may be given as to whether your family and any employees should know of the arrangement.
38. Arrangements may be made with a bank for named Attorneys to operate specific bank accounts. Power of Attorney may be of general or specific application. Each of these forms of authority ceases to have effect should a donor or their attorney become incapable or die.
39. In the event of incapacity a Lasting Power of Attorney will enable another person(s)
to make decisions on your behalf. Two Attorneys may be appointed jointly (i.e. must act unanimously at all times) or jointly and severally (either one will be able to act on his/her own). You may wish to consider including a Charging Clause entitling the Attorney to charge, and be paid, professional fees for managing the business. This form of authority ceases to have effect should a donor/attorney die or become incapacitated.
40. In the event of death, a Will providing for the business to be managed in the short term, could appoint an Authorised Person as Executor or alternatively, give the Executor the authority to appoint an Authorised Person to manage the business. A Charging Clause is likely to be needed. You may wish to provide specific instructions in a ‘side’ document to the Will which can be changed depending on circumstances.
Closing of a practice
41. Should you decide to sell, due diligence is recommended to help prevent fraudsters from purchasing the entity. Clients would ideally be informed of the ownership transfer prior to the purchase. This will enable them to make an informed decision as to whether they wish to continue with their instruction with the entity.
42. As agreed with the client, arrangements should be made for completion of work scheduled for after the entity’s closure or transfer.
43. Where possible, client monies, such as disbursements, should be transferred out of the client account.
44. The planned closure should be discussed with your indemnity insurer (and run-off cover obtained as per OP3)o).
45. Legitimate ownership of original documents and papers should be identified and client files suitably stored.
46. Closure is often foreseeable so it is likely that you can plan well ahead, making arrangements to close or sell the practice before this happens. An ill-prepared closure is likely to result in the CLC arranging a formal intervention which is likely to be disruptive to both staff and clients. The cost of the intervention will be charged to you.
To be used in conjunction with Management and Supervision Arrangements Code.
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1. Provision of adverse information under this Code does not necessarily mean we will withdraw our approval of the relevant individual. Where adverse information is provided it will be discussed with the body to determine the risk posed to the Code of Conduct’s Outcomes; resource implications for the CLC; and the individual/body’s willingness or capacity to address the issue.
2. Examples of what is meant by ‘any other information that could reasonably be expected to have a bearing on their being fit and proper’ under requirement 14 include:
- by a reason of character, conduct or association and in particular has been in breach of statutory requirements regarding payment of tax or for a licence;
- lacks capacity within the meaning of the Mental Capacity Act 2005 and powers under sections 15 to 20 or section 48 have been exercised.
3. An example of what is meant by ‘structural arrangements’ under requirement 7 is a body no longer registered as a Limited Liability Partnership or a Company under the relevant Acts.
4. Persons disqualified by Licensing Authorities are identified on the Legal Services Board website.
To be used in conjunction with Notification Code.
Professional Indemnity Insurance Guidance
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1. A Licence will not be issued to a Manager unless the applicable Evidence of Insurance for your Body has been produced to the CLC.
2. As a guide to the provisions under requirement 14 a body should be able to demonstrate it can fund the self insured excess for no less than two claims per year.
Examples of Limits on Self Insured Excess:
- Fees £250,000 Maximum Excess = £200,000 X 5% + £50,000 X 3% = £11,500
- Fees £600,000 Maximum Excess = £200,000 X 5% + £300,000 X 3% + £100,000 X 2% = £21,000
- Fees £900,000 Maximum Excess = £200,000 X 5% + £300,000 X 3% + £400,000 X 2% = £27,000
3. We would remind you of your responsibility under the Provision Of Services Regulations 2009 to make the following ‘available’: contact details for the Professional Indemnity Insurance provider, and the geographic coverage of that PII. It is at your discretion as to how make this available e.g. given in writing to the client at the outset, hard copy at the firm’s offices, on website, or in documents provided to the client during a transaction etc.
To be used in conjunction with Professional Indemnity Insurance Code.
Transaction Files Guidance
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1. Overriding Principle 3 of the CLC Code of Conduct requires you to act in the best interests of your clients. You are not obliged to adopt the approach below, it is provided for those seeking guidance, setting out considerations to be borne in mind in determining how the Client Outcomes sought by that Overriding Principle might be delivered.
2. Procedures/policies which can help ensure that all transactions are of a high, consistent, quality include (but are not limited to):
- Acceptance of new matters, work allocation and file management procedure
- Client Instruction Form
- Client ID Form
- Client Care Policy, Letter and Standard Terms and Conditions
- Transactions File Checklists – please see below.
Conveyancing transaction – procedure checklist
3. You may wish to consider creating a transaction procedural checklist. This is likely to include:
- ID evidence (all transactions)
- Capacity* of client established
- Usage of sub files (sale)
- Source of funds evidence (purchase)
- Written estimate/costs and disbursements estimate (purchase)
- All parties have signed Terms and Conditions (all transactions)
- Provision of written estimate on inside cover of file if hard copy, or within electronic folder (sale)
- Complete documentation supplied or explanation given (sale)
- All parties have signed the Terms and Conditions (purchase)
- Money received on account (purchase)
- Where required, mortgage lender has been advised as to the other conveyancer’s ID (purchase)
- Correct copy documents and searches on file (both sale and purchase)
- Contract report sent/appropriate advice given (purchase)
- Mortgage report sent/appropriate advice given (purchase/remortgage)
- All Council for Mortgage Lenders Handbook/Building Societies Association requirements met (purchase/re-mortgage)
- Where undertakings given, correct procedures followed (all transactions)
- Transaction dealt with promptly and efficiently (all transactions)
- Prompt SDLT submission and payment (purchase)
- Lease requirements met (leasehold purchase)
- Prompt registration application and registration made within priority period (purchase)
- Prompt report of registration to client and mortgage lender (purchase)
- Proceeds of sale to clients (sale)
- No breaches of CLC regulatory arrangements (both sale and purchase)
- No breach of both seller’s and buyer’s responsibilities (both sale and purchase)
- No breach of both lender’s and buyer’s responsibilities (purchase)
probate transaction – procedure checklist
4. You may wish to consider creating a transaction procedural checklist. This is likely to include:
- Personal representatives established
- ID evidence
- Capacity* of client established
- Terms of Engagement issued to all personal representatives
- All representatives have signed Terms of Engagement
- Written estimate of charges and disbursements on file and sent to client(s)
- Beneficiaries established – according to the Will’s provisions or following the Intestacy Rules as set out in the Administration of Estates Act 1925
- Deceased’s assets/liabilities (including those in joint name) established
- Relevant companies informed of the death
- Valuations obtained for all assets/liabilities
- Valuation of estate established for tax purposes
- Relevant Inheritance Tax Account (IHT) prepared
- IHT calculated and paid, if applicable
- Prepare application for Grant of Representation
- Copy Grant lodged with all asset holders
- All assets encashed/transferred and debts paid
- Income tax affairs in order
- All IHT paid and a clearance certificate obtained
- Administration Accounts prepared and sent to personal representatives for approval
- Estate administered in accordance with the Will, or the Intestacy Rules as set out in the Administration of Estates Act 1925
- No breaches of CLC regulatory arrangements
Wills transactions – procedure checklist
5. You may wish to consider creating a transaction procedural checklist. This is likely to include:
- ID evidence
- Capacity* of client established
- Where undertaking given, correct procedures followed
- Full instructions taken
- Written estimate on file and to client
- Terms of Engagement issued
- Copy of signed Terms of Engagement on file
- Will signed in accordance with s9 Wills Act 1837 as amended by s17 Administration of Justice Act 1982
- Explanation of will provisions and how they meet the client’s intentions
- Confirmation from client that the will meets their intentions
- Written confirmation regarding what will happen to the will and its storage, advising where, and for how long, it will be stored, the cost, and how it can be accessed
- Where relevant, previous wills located and destroyed
- No breaches of CLC regulatory arrangements
* Capacity of the client relates to vulnerability factors such as their mental health and the exertion of undue influence
Key Transaction Dates -Conveyancing
6. It may be beneficial to include the following key dates within the transaction
- Registration of a change at Companies House - within 21 days
- Submission of an SDLT return and payment made – within 28 days
- Registration of a purchase or new lease – within Land Registry search priority period
- Completion of purchase – within 6 months of the issue of a Local Authority search and within the life of a mortgage offer
- Land Registry cancellation dates relating to requisitions
7. It may be beneficial to include the following key dates within the transaction checklist:
- 6 months from date Grant is issued – claims can be made against the estate under the Inheritance (Provision for Family and Dependants) Act 1975
- 2 years from date of death – to prepare a Deed of Variation
- 1 year from death – executors’ year, interest paid on pecuniary legacies distributed after this date
- Statutory notices under Section 27 Trustee Act 1925
8. All individual files present potential risks. These may take the form of mortgage fraud/money laundering signs, involvement of a foreign jurisdiction or unique/unusual aspect of law (which may be beyond the competence of the individual), a transaction value which exceeds the firm’s insurance policy, or other. The example checklists provided at items 3-5 may aid you in identifying any inherent risks.
9. Staff are made aware of the broad range of potential risks and who they must report the risks to so that a determination can be made as to whether the transaction should proceed.
10. The files of each relevant person are subject to monthly, independent, review by sufficiently competent and experienced persons. The review findings are tailored (e.g. on process, advice quality)to the individual, centrally recorded and inform the individual’s staff development programme.
See also the Anti-Money Laundering and Combating Terrorist Financing, Acting for Lenders & Mortgage Fraud, and Management & Supervision Codes and Guidance.
File Retention and Ownership
11. Transaction files generally contain a mixture of papers and documents some of which belong to the Client and some to the body. In addition there may be other papers and documents which belong to another Client, for example a lender.
12. Documents that belong to the Client:
a) Those documents you have prepared for the benefit of the Client and which have been paid for by the Client either directly or indirectly, including:-
- most attendance notes;
- copies made for the Client’s benefit of letters received by the Licensed Conveyancer or body;
- copies of letters you’ve written to third parties contained in the Client’s file and used for the Client’s business, for example letters to banks, lenders, witnesses or potential witnesses.
This does not include copies of letters written to the Client which you may keep.
b) Those documents prepared by a third party during the course of a matter and sent to you (other than those sent to you at the body’s expense). Examples are receipts and vouchers for disbursements made by or on behalf of the Client and letters received by the body from third parties.
c) In the case of joint Clients these documents belong to the Clients jointly.
d) In most cases it is not necessary to deliver up original documents. However:
- some documents (such as Wills and Deeds) only have effect on production of the original; and
- questions about the authenticity of a document may in some instances only be determined on production of the original.
13. Documents that belong to you:
a) Those documents prepared by the body for its own benefit or protection, the preparation and production of which is not charged to the Client. They include:
- copies of Communications written to the Client;
- copies of Communications received by the body;
- office journals;
- computerised records;
- copies of Communications to third parties but only if they are contained in a filing system of all Communications written in the office;
- tape recordings of conversations;
- entries in diaries;
- time sheets;
- books of account;
- inter office Communications;
b) Those documents sent to the body by the Client, the property of which was intended at the date of despatch to pass from the Client to you, including letters, authorities, and instructions written or given to you by the Client.
14. Where you acted for two or more clients and a request for the file or part of it is made by one of the clients (e.g. a lender), you should determine the ownership of the various papers in accordance with paragraphs 2 and 3 above. For example, in a conveyancing transaction there may be documents which:-
- Belong to the lender alone including the lender’s instructions to the body, certificate of title and correspondence between you and the lender. The original may be released but a copy should be retained.
- Belong to the borrower Client, but which the lender is nevertheless entitled to see, as they relate to that part of the work where the lender and borrower can be said to have a common interest, such as deducing title. Examples are the contract, transfer and search certificates.
- Belong to the borrower Client that the lender is not entitled to see without the consent of the borrower Client (and for which a copying charge may be made).
You are not obliged to adopt the approach below. The following are provided only as good practice considerations:
15. To make a copy (without charge) for your own benefit of any documents released.
16. Where documents are requested with a view to a claim being made against you (in addition to your regulatory responsibility to notify insurers of the circumstances) you should:
- not make any admission of liability;
- deal with the matter in accordance with instructions issued by or on behalf of the insurers.
17. Where a file or information from a Client file is requested by a third party (such as the Police, HM Revenue and Customs or Trustee in Bankruptcy) to satisfy yourself (by the production of legal authority, preferably a court order) that the party making the request is legally entitled to the documents and information requested.
18. Where you intend to charge for copying documents (other than where any copying is made for your own benefit) you make a reasonable charge.
19. It is in your interests to ensure that the relevant Terms of Engagement authorise you:
- to retain or destroy the contents of a Client’s file or transfer the data onto another Durable Medium, since you may be liable for any loss incurred if the contents of a file are destroyed without the Client’s consent; and
- to provide copies (rather than originals) of documents requested unless the production of the document (such as a Will) is required for the document to have legal effect.
Destruction of file contents
20. After the relevant minimum retention period (identified at 9 & 10), and provided you have the Client’s authority, you review the file to decide whether it may be safely destroyed. You might consider retaining separately and for a longer period the authority from the Client.
21. If the matter involved a mortgage, then it is likely you will want to take into account any specific requirements of the particular lender.
22. Items 9 and 10 of the Code provide minimum periods of time for which documents should be retained. Due to increasingly diverse relationships, people living longer, and growing challenges/disputes regarding a testator’s wishes, you may wish to consider retaining will documentation for much longer. Some entities may store the original documentation for 50 years from its creation, until the individual making the will would have reached 100 years of age, or indefinitely. It is likely to prove beneficial to record all contact pertinent to the transaction/service provision e.g. client’s intentions, family dynamics etc. in case a (probate or other) dispute should arise in the future.
To be used in conjunction with Transaction Files Code.
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1. Neither the CLC nor its disciplinary committees has power to direct the specific performance of an undertaking or to direct the payment of compensation to a third party but the breach of an undertaking may lead to disciplinary proceedings.
2. The CLC will treat a promise to give an undertaking as an undertaking provided the promise sufficiently identifies the terms of the undertaking and provided any prior conditions have been satisfied.
3. Should you incur loss arising directly from a claim based on an undertaking made in the course of practice you may be entitled to an indemnity under the CLC Master Policy or other professional indemnity insurance.
You are not obliged to adopt the approach below. The following are provided only as good practice indicators for those seeking guidance on how to deliver the positive Client Outcomes which the Principle of Maintain High Standards of Work seeks:
1. To ensure that an undertaking is given only by an Authorised Person or other member of staff with authority expressly given on a Durable Medium by the body.
2. To ensure that all staff are aware of the terms of undertakings incorporated by
the use of the Law Society’s formulae for exchanging contracts by telephone and its code for completion by post.
3. To note on the file and confirm in writing to the other party any agreed variation to undertakings in the Law Society’s formulae for exchanging contracts by telephone or its code for completion by post.
4. To note separately the terms of undertakings on file.
5. To give an undertaking only if the Authorised Person or duly authorised member of staff can be absolutely certain that it will be fulfilled.
6. Where making or accepting an undertaking “to pay costs” specify the amount of costs since if no sum is agreed the undertaking may be interpreted as meaning “to pay reasonable costs”.
7. To ensure the wording of an undertaking is unambiguous, since only in exceptional circumstances will extraneous evidence be admitted to clarify an ambiguity;
8. Where an undertaking is dependent on the happening of a future event to notify the recipient immediately if it becomes clear that the event will not occur.
9. To specify both the identity of the lender and the date of each charge it is intended to discharge in reply to any requisitions on title or otherwise.
10. To give an oral undertaking only as a last resort and ensure that it is confirmed in writing as soon as is practicable.
11. To avoid either giving or accepting an undertaking using terms such as “best endeavours” or “reasonable endeavours”: be specific.
To be used in conjunction with Undertakings Code.