CQS Practice Standard - Demonstrating Compliance

Management structure & responsibilites.

Downloadable map showing the structure of the conveyancing department including fee earners/assistants/pools/managers as well as a list of reports that managers have access to. In accordance with the guidance notes it lists all current personnel in the conveyancing department (as long as updated by the firm).

The software does, to some extent address 1.2b. as we to reduce and/or transfer the risks in that as as a cloud based system as long as software is being used, even if the firm's physical files are destroyed all the key risks previously input will be available to be viewed. This also assists where fee earners are off sick or unavailable.

Documentary evidence of financial management procedure

Whilst the system does not offer assistance with budgeting and expenditure it can offer reports that assist with the requirements under Section 2.2d. The optional cash flow forecasting feature utilises calculations based on fee quoted and anticipated completion date. Only by having cash flow analysis can a firm then conduct variance analysis on 2.2f.

Contained within CQS (CPMS) Information management and security policy

Whist the service does not directly deal with training (The Law Society and others specialise in this area), the software does offer assistance in the following areas:
1) A number of optional management reports indicate whether a particular fee earner or assistant may need additional training. A good example of this is 'Time to Register' report that shows the average time to register title. This would enable a manager to identify those falling behind the average and take appropriate action that would include training as an option. There are many examples of reports that would indicate outliers.
2) The software also sends lender P2 Handbook updates with optional associated training reports for individual fee earners.

Contained within CQS (CPMS) Information management and security policy

Procedure to manage instructions, including high risk profiles, reporting requirements and contingency planning.

Profiling of case types, risk scoring and determining if it falls outside the scope of expertise is a feature that firms can chose to use, but does not come as standard with the service. There is also a feature that allows a firm to create bespoke risks and combinations that can result in a case being flagged in real-time to the manager as meeting the said risk parameters. The case can be locked down on the software until the case is relocated by a manager.

The software can be deemed as the procedure to monitor key dates. There are between 50-60 different types of key date alerts that trigger warning at critical alerts (via a dashboard traffic light system and emails). The software is a key date/centralised diarization system that not only helps fee earners and their assistants stay on top of important deadlines, it is also a supervisory tool for managers who benefit from a holistic overview as the high risk cases where dealised are risk of not being met.

Practices must have a procedure to ensure that files are monitored regularly for inactivity.

Practices must have a procedure to ensure that files are monitored regularly for inactivity.

The system has tools available to reallocate work. This means that staff who take over cases take over from where the checklists have been left off. The new FE or assistant will have the case reallocated to their dashboard and the email alerts will be sent to those who have taken over the matter.

Procedure for regular, independent file reviews of both the management of the file and the substantive legal content.

The software has a significant role to play when it comes to independent review of management of the file, and to a lesser extent legal content.
(1) Management of file - proximity to key dates being missed triggers alerts to legal managers. Realtime oversight reports are available to managers via the 'Notification Centre' and the 'view all cases' feature. The 'post-completion' overview provides analysis as to the firm's current high risk cases.
(2) Substantive legal content. The system assists in two areas (a) the firm can set parameter for high risk characteristics so that audits are focused on those matters with a high risk profile (b) there are plenty of reports that score the performance of individual fee earners e.g. 'Time to Register Title', 'Lender Disclosure Reports', Fee earner - Lender Compliance Indicative Behaviour Reports' that would assist the firm is selecting files from certain individuals based on these reports.
Depending on the choice of features they can be utilised as part of the firm's procedure for dealing with all elements of 5.10. In this way it can be argued that 100% of signed off cases on the software are subject to a significant level automated audit ready for further engagement with the appropriate supervisor/manager. The system has a unique ability to record every file reviewed by a legal manger recording the following:
1) Case details (property, file reference, case type)
2) Fee earner
3) Alerts of concern
4) Date of corrective action

Policy to mitigate and manage money laundering and terrorist financing risks and to ensure compliance with anti-money laundering (AML) legislation.

Policy in relation to the avoidance of involvement in property and mortgage fraud.

The 'bespoke risk' feature allows a firm to identify their own 'red flag' /high risk alerts to the MLRO/HOD/SRO. This functionality has been shown to the SFA, Lenders, BOE and other organisations who have contributed to the evolution of this feature.

The system requires the fee earner to complete an online form confirming twice a year that they have read and understood the policy.

Policy in relation to Stamp Duty Land Tax (SDLT)

Policy when acting on purchase of leasehold properties

There are specific questions in CM relating to leasehold particularly around the the remaining lease term, ground rent provision and event fees but this is focused more on the complying with lender requirements.
The system does not specifically ask whether you have given 'clear and access ble written advice is given to the client on the lease and any supporting documents'. This is addressed via Lexsure's e-ROT software.

Annual analysis of risk assessment data

CM has the option of providing as little or as much managment information from the system as the firm likes (certainly significantly more data than a few manual checks of files will ever do). Client firms via their (MLRO/HOD/SRO) can select via 'add on services' various management
reports.

CM is particularly comprehensive in this area as questions in both the pre and post-completion checklists link directly to the the provisions of the UK Finance Handbook. As a result of being a digitised checklist the software can produce evidence that the lenders' requirements were checked and identify 'outliers' within the firm who may need additional training in this specific area.

Optional features dive further into the CQS (CPMS) provisions such as ensuring the the lawyer conducts a last minute pre-exchange check (LM04) to see if there have been any adjustments to the specific lender's instructions. There is a 'disclosure to lenders' feature that specifically focuses on the reporting obligations at 6.4c.