Editor's note: This brief was summarised by The Property AI Newsroom from a report by The Negotiator. Read the original article for full details.
Conveyancers’ Regulator Criticised Over Referral Fee Oversight
The Council for Licensed Conveyancers (CLC) has come under strong criticism from the Legal Services Consumer Panel regarding its regulation of referral fees in the property sector. The criticism follows a new position paper that examines regulatory gaps highlighted by a BBC Panorama investigation last year.
The Legal Services Consumer Panel, which oversees legal profession regulation and represents the public, has described the CLC as having regulatory ‘blind spots’ in its oversight of referral fee arrangements. The panel’s comments reference a BBC Panorama exposé from the previous year, which reported that some estate agency managers at Connells had incentivised staff to direct buyers towards in-house or preferred conveyancing services, regardless of quality or consumer interest. Connells stated at the time that it was committed to treating all customers and prospective buyers fairly.
The panel’s report argues that the CLC, as a smaller regulator with limited resources, had not prioritised proactive oversight of referral fee arrangements that are financially significant to regulated firms. The report suggests that a single, unified regulator could provide more systematic supervision and avoid such blind spots for consumers.
In response, the CLC expressed disappointment with the report, describing it as ‘inaccurate’. The CLC stated that the BBC Panorama investigation highlighted wrongdoing by unregulated estate agents, not by conveyancers. The CLC also noted that it had reviewed the issue within its remit and identified areas to strengthen transparency and consumer protections in its code. The CLC continues to advocate for the regulation of estate agents and maintains that its focused regulation benefits both consumers and legal professionals.
This ongoing debate is relevant for UK letting agents and inventory clerks, as it highlights the scrutiny over referral fee practices and the regulatory responsibilities of both estate agents and conveyancers in the property transaction process.
Source: The Negotiator