Top 5 claims risks to licensed conveyancers in 2025

The UK’s evolving legal and regulatory framework, as well as shifting property market conditions, lead to constant challenges for conveyancing firms.

The economic landscape also has a direct impact on the conveyancing process, such as fluctuations in interest rates and lenders’ criteria, and professionals often face unique pressures outside of their control as a result.

Given the nature of property transactions and the high volumes and values involved, the consequences of minor errors and delays can be unforgiving, and some are finding that it is becoming increasingly difficult to attract new talent to the profession. It also does not come as a surprise that conveyancing work consistently produces the largest volume of professional indemnity insurance claims and notifications.

Our specialist licensed conveyancing team understands the challenges faced by conveyancers and will be able to provide expert guidance on your professional indemnity insurance needs. We can help you navigate through the renewal process to secure the most favourable terms and to see that your business is protected should issues lead to claims.

In this article, we explore the top five risks that we believe conveyancers will face this year so you can reflect on your risk management practices, which is key to reducing the risk of claims.

If you would like to discuss any of the topics below in more detail, please contact us.

1. Climate Change

There have been many widely-publicised extreme weather events worldwide, the most recent being the California wildfires in January 2025. The UK is not immune from such events, albeit thankfully not quite so catastrophic in scale. Some will recall the wildfires that broke out during the July 2022 heatwave, as well as storms and heavy rainfall in recent years leading to severe flooding, power outages and property damage.

Lenders are tightening their criteria and some insurers are withdrawing from or increasing their premiums for high-risk properties. Legal and regulatory bodies are also imposing more stringent sustainability requirements and energy efficiency standards.

Conveyancers must therefore adapt to these changes, as there is greater emphasis by purchasers, lenders and other stakeholders on environmental performance and resilience.

In September 2024, the Law Society launched a consultation to provide new guidance on how climate risk affects firms that carry out conveyancing work. It was found that 76% of respondents feel unable to confidently discuss climate risks with their clients^[1].

There are valid concerns surrounding a licensed conveyancer’s professional limitations, however. There could be increased exposure to claims by extending a conveyancer’s role and providing advice beyond their remit and expertise. There is also a potential risk of delays to an already time-sensitive process if a requirement to provide detailed climate risk and sustainability advice is going to be an additional burden placed on conveyancers.

The Society of Licensed Conveyancers responded to the consultation, pointing out that conveyancers are not climate experts, so they should not be providing specialist advice on climate matters, and liability for the same should be expressly excluded in firms’ letters of engagement.

2. Anti-money laundering and fraud

The anti-money laundering (AML) regulator, OPBAS, has confirmed in a letter published in November 2024 what has probably always been known – that conveyancing work is a high-risk area for money laundering^[2].

Regulators are increasing their scrutiny of conveyancing professionals so they are encouraged to regularly assess risk management practices and AML policies, as failure to meet AML regulations can lead to regulatory action, fines and also a risk of third-party losses and claims.

The key issues that conveyancers need to be aware of include (although are not limited to) inadequate verification of source of funds or wealth, proliferation financing, lack of matter-based risk assessments, high-risk countries, and the rise of cryptocurrency payments^[3].

The increase in complex financial structures and sophisticated fraudsters and technology means that conveyancers need to implement robust client and funds verification, including biometric ID checks, as well as secure payment procedures to mitigate the risk of money laundering and fraud.

With the unprecedented surge in development of AI, there have been reports of deepfake technology being used to alter or generate documents or to impersonate someone else. Firms should therefore stay alert and informed on the threats posed by AI and ensure adequate due diligence procedures are in place.

Finally, fraudsters are still targeting properties to facilitate vendor fraud, and many will recall Dreamvar which is the leading case on this. Conveyancing professionals should continue to look out for the usual warning signs, such as vacant and unencumbered properties, unusually low purchase prices, pressure to complete transactions quickly and reluctance to provide documents.

3. Post-completion work

The Council of Licensed Conveyancers’ (CLC) annual risk agenda was published in July 2024, highlighting that delays which may be faced with the Land Registry are exacerbated by a lack of due diligence by conveyancers and failure to carry out duties promptly and properly following completion^[3].

This could include breaching undertakings, which is the cause of many complaints against conveyancers and systemic breaches may be investigated further, which could lead to regulatory action against the firm. They also warn that charging a fee for post-completion work that is not carried out is a breach of the CLC Accounts Code.

We have seen several notifications being made to professional indemnity insurers of registrations being cancelled due to a failure to respond to requisitions made by the Land Registry within the required timeframe and this has led to significant claims against conveyancers by third parties.

It is important that firms prioritise post-completion work and discharge their duties properly as any claims paid by professional indemnity insurers can adversely affect future premiums.

4. Leasehold properties and fire safety

The introduction of the Building Safety Act (BSA) has had a wide-reaching impact. Conveyancers are being met with new challenges where transactions involve leasehold properties. The legislation is complex, but its aim is to protect qualifying leaseholders from having to pay for significant remediation costs.

However, the implications for conveyancers have raised several concerns. These include lenders imposing requirements which are beyond their scope or expertise to check, provision of certificates within strict deadlines, and providing additional guidance to leaseholders in relation to ‘relevant buildings’. It is therefore unsurprising that some firms are refusing to act on properties that fall within the remit of the BSA.

The Law Society has since published a guide which should give some clarity on what is expected from conveyancers[4]. They have also stated that more responsibility should be placed on lenders. We can therefore expect further updates to the existing legislation to address the unintended consequences to the conveyancing process.

Firms may also be aware of the current EWS1 scandal which is being reported in the media involving an engineering company called Tri Fire. Their director, Adam Kiziak, is alleged to have forged signatures on EWS1 forms and has been suspended by the Institute of Fire Engineers. Lenders are now rejecting EWS1 forms connected to Tri Fire, which is impacting mortgage applications and the saleability of affected properties.

Conveyancing firms should ensure that they engage with all relevant parties to ensure a valid EWS1 form is obtained from recognised professionals to avoid delays and issues.

5. SDLT

Applying the correct stamp duty land tax (SDLT) has always been problematic. Conveyancers often miscalculate the stamp duty payable by applying the wrong rate. Whilst most firms exclude liability for specialist tax advice in their letters of engagement, SDLT generally falls within a conveyancer’s remit and mistakes can happen when the calculation is not straightforward.

The common causes of claims include failure to apply for multiple dwelling relief, failure to advise on additional stamp duty on second homes or to advise on certain reliefs or surcharges (such as for first time buyers or overseas buyers respectively) and incorrect rates applied for mixed-use or non-residential properties that do not meet the commercial property threshold.

HMRC actively investigates SDLT underpayments and can impose fines and penalties against purchasers who, in turn, can seek to recover such liabilities from their conveyancer.

There are upcoming changes to SDLT which will be effective from 1st April 2025 and, as we have seen with previous instances where the SDLT threshold is adjusted, there is likely to be a surge in property transactions in a rush to complete before the new rates take effect.

Failure to complete before the changes are applied can lead to dissatisfied clients so expectations should be managed. Conveyancers should also keep clients fully informed and look to provide sufficient warnings if there is a potential for target completion dates not to be met and for a higher rate of SDLT to apply.

Most importantly, pressure to expedite completion of a sale or purchase when workload is already higher than usual can increase the risk of errors and oversights, so firms should exercise extra caution in this regard in the upcoming weeks.