Referral Arrangements
Conveyancers are entitled to enter into referral agreements with third parties (estate agents and mortgage brokers for example) under which the conveyancer pays a fee to the referrer but these arrangements must be disclosed to the client at the outset including details of the fee that will be be paid and to whom it will be paid. An example paragraph would be "We have been introduced to you by [name of referrer] with whom we have a referral arrangement. In return for the introduction we will pay [name of referrer] a fee of £[insert fee] [plus VAT if applicable]."
Referral arrangements are not acceptable where they result in a conflict of interest such as acting for plot purchasers where the firm also acts for a developer and conveyancers must wary of arrangements which might lead to the referrer being able to exercise influence over individual client matters or over operational decisions which might affect client matters. This can happen where all or a significant proportion of the conveyancer's instructions come from a single referrer which retains an interests in matters it refers after the referral. An example would be an estate agent who is dependent exchange or completion being achieved in order to receive the commission for the sale, especially where the individual agent managing the matter's earnings are tied to periodic completion targets. This can inevitably lead to an own interest conflict, where the conveyancer might defer to the referrer at the expense of his client in order to protect his own commercial interests.
If taking paid referrals a conveyancer should endeavour to diversify so as not to be dependent on a single source of work for the survival of his business.
Fee Information
You are obliged to provide as much information as possible with regard to fees at the outset. As conveyancing work is usually charged on a fixed fee basis as opposed to a time record basis the initial estimate should be fairy accurate. You may want to include a copy of your initial quote, if you have provided a written quote, with your engagement letter. If you intend to charge an abortive fee for matters that don't proceed to completion you should say so in your engagement letter.
Right to Cancel
Under the the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013, clients who are considered "consumers" (corporate clients are generally excluded) have the right to a 14 day cooling off period after formally instructing. If they cancel the retainer during this period the conveyancer cannot charge for any work done. That creates practical issues because clients and other stakeholders will rarely be happy for the conveyancer to do nothing for 2 weeks after being instructed, so when explaining the right to cancel it is sensible to offer the clients the option of waiving their rights, which enable work to commence immediately.
You should include a proforma cancellation notice which the clients can use if they do decide they want to cancel and add a form of words to whatever document you ask the client to sign to formally instruct you which allows the clients to waive their cancellation rights.
Something along the lines of "By signing and returning your instructions you are entering into a contract with us under which we will provide conveyancing services to you in return for a fee. If you meet the definition of "consumer" under the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013 (“Consumer Contracts Regulations”), you will have the right to cancel this contract within 14 days. You do not have to give a reason. The cancellation period is 14 calendar days, starting the day after the date that we receive your signed instructions.
We will not start work during the cancellation period unless you either sign the waiver of your cancellation rights contained herein or else you make an express written request that we start work (which can be by email). If you do ask us to start work early you will be liable to pay for any time spent before the end of the cancellation period." should be included in your engagement letter or in a separate document sent with the letter.
Complaints Information
Clients have a right to complain and complaints, both justified and unjustified, are an inevitable consequence of doing business. Every firm must have a complaints procedure that must documented in writing and signposted to the client without prompting. It is good practice to to do this in the initial engagement letter. You should either provide a copy of the policy with the initial letter or else provide a link to where it can be viewed online, if appropriate. The detail of the policy will vary from firm to firm but should set out who complaints should be addressed to, the expected timescales for acknowledging and substantially responding and the contact details for the Legal Ombudsman in the event that the complaint cannot be satisfactorily resolved by the firm.
Data Retention Policy
The Data Protection Act 2018 and UK General Data Protection Regulations govern how anyone who collects personal data from an individual in the course of business can use that data, how it must be protected and what rights the data subject has. A detailed examination of the regulations is beyond the scope of this article however each firm must have a written policy document which explains what information will be collected, for what purpose it will be used, who it might be shared with, how long it might be held and what rights anyone whose data the firm holds has in respect of it.
