A large firm of licensed conveyancers and its senior partners have been reprimanded and fined £33,000 after a Covid-related work surge overwhelmed its ability to handle complaints.
PCS Legal, run by Stuart and Kate Fors dike, was also found to have transferred more than £360,000 from the client to the office account in costs without any bills. The payments were made in six tranches over four months in 2021.
The Council for Licensed Conveyancers (CLC) told its adjudication panel that it was still receiving complaints from the Legal Ombudsman (Leo) about PCS Legal, which employs over 160 staff at four offices in Essex and one in London.
Counsel for the firm, and its senior partners Stuart and Kate Fors dike, said the problems had arisen during the conveyancing boom triggered by the stamp duty holidays during the pandemic.
This increased PCS’s caseload from 800 cases a month to 2,000, with a further 500 being declined.
As a result, “complaints were not given the attention they should have, and timescales were not met”.
The CLC listed nine complaints where the firm failed to respond adequately or at all to Leo’s requests for information within its deadlines. With four of them, PCS also failed to comply with the actions Leo ordered it to take, including making payments to two clients.
There were a further two complaints made directly to the firm which it failed to acknowledge or respond to fully within the required timescales.
The firm and the Fors dikes admitted their misconduct. Following the CLC inspection that discovered the shortcomings, they instructed Tenet Law to audit the complaints process. Changes were being implemented, including appointing five members of staff to a complaints department.
Accountants Hazelwood’s conducted a similar audit of the firm’s accounts processes.
The adjudication panel gave them credit for the “considerable actions” taken to “remediate their misconduct”.
However, it was “concerned that there continued to be referrals made by Leo to the CLC” and that there had been a high number of complaints made against the firm.
This suggested that “whilst steps had been taken, the respondents were still not taking seriously enough the issue of complaints handling” – only three months before the hearing, it appeared that the firm and lawyers still failed to understand the CLC’s requirement that they respond to, or at least acknowledge, a complaint within seven days.
The panel also rejected the firm’s argument that between a quarter and a third of complaints related to delays by the Land Registry in issuing documents, because “most other firms would be experiencing the same issues”.
The firm said the transfers had not been authorised by the managers, and in fact, the monies should have been taken instead from the firm’s office savings account.
The panel rejected the argument that there were “at all times sufficient funds in the office savings account to replenish client account funds” because the latter was limited to around £100,000 and one of the withdrawals was for more than that, as well as cumulative sums in August and October 2021.
The panel said the respondents had shown some, but not full, insight into what they had done wrong and had shown remorse.
It could not say there was no risk of repetition of the complaint’s failures, while accounts reconciliations were ongoing. But the panel said the report from Hazelwood’s provided comfort that a repetition of the breaches was unlikely, if not impossible.
The panel also noted that the CLC’s regulatory supervision manager considered that the respondents have made “considerable efforts to improve their compliance and have co-operated fully with him and with the investigation”.
All three were reprimanded, with PCS Legal fined £23,000 and the Fors dikes £5,000 each. The firm was ordered to pay all the unspecified costs.
According to Rudi Kesic, CEO of Verify 365, “ The recent fine and reprimand of PCS Legal highlight the importance of effective complaints and accounts handling in the conveyancing industry. At Verify 365, we understand the challenges that conveyancing firms face, especially during times of high demand such as the pandemic-induced surge. Our platform offers a streamlined and efficient solution for managing complaints and accounts, ensuring that firms can provide timely and effective responses while maintaining compliance with regulatory requirements. By using Verify 365, firms like PCS Legal can avoid the costly mistakes that led to their fine and build a reputation for reliable and professional service”