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ICAEW Probate Regulations - How Do I Become Licensed?

By Jane Mather

Firms have two options as to how they might provide probate services. These are as an ‘authorised firm’ where all principals have to be individually authorised to conduct probate work or as a ‘licensed firm’ where all principals are not authorised to conduct probate work and additional requirements will then apply. The expectation is that the majority of accountancy practices will apply to be ‘licensed’ as opposed to ‘authorised’.

We have summarised here the key regulations that apply to a firm wishing to apply for a license to provide probate work. This is no substitute for reading the Regulations themselves but we'll pull out key areas of which you should be aware. 

Who can apply for probate accreditation?

It has recently been announced that any firm may apply to be accredited to carry out probate work by ICAEW (not just ICAEW members). This means that ACCA firms, CTA firms and AAT firms (to name a few) can apply to ICAEW to be accredited to perform probate work once they have authorised individuals in place. 

Application and eligibility

Firms will have to apply to ICAEW using the prescribed form providing information to support their competence to perform this work and statements and affirmations regarding improving access to justice, conduct, co-operation and working practices.

To be eligible to be a licensed firm, at least one principal within the firm must be either an authorised person or an authorised firm. 

Where a non-authorised person holds a material interest in a licensed firm that holding must be notified to ICAEW and will require ICAEW approval under regulation 6. A holding of 10% of the shares and/or voting rights will be a material interest as will the ability to exert significant influence over the management of the licensed body. For the purposes of material interest you would also include any interest of a person’s associates, as set out in Regulation 6.3, but including their spouses, minor children and employees. See Regulation 6.3 for the full listing. ICAEW may grant approval unconditionally if there is no compromise to the firm’s compliance with the Act or Regulations and the person is fit and proper, or it may grant approval subject to conditions, or even object to the holding. A firm applying to be a licensed firm should read regulation 6 carefully.

In addition the firms must satisfy ICAEW that;

• Both the firm and the authorised individuals are fit and proper
• A contact partner has been appointed
• They have appointed and ICAEW have approved a Head of Legal Practice (HoLP) and a Head of Finance and Administration (HoFA)
• They have at least one office in England and Wales from where probate work will be undertaken (Corporates need just have a registered office in England and Wales)
• Any principal that is not a licensed probate firm, a registered auditor, a DPB Licensed firm, a member of ICAEW, ICAS or CAI or another approved regulator holds affiliate status
• Non-authorised persons with a material interest in the firm are approved by ICAEW
• Non-authorised principals, employees and shareholders have been informed of their duty to ensure that they do nothing in contravention of the Regulations
• The firm has procedures in place to prevent un-authorised persons influencing the independence or integrity of probate work
• The firm has PI insurance in place under the ICAEW PII Regulations with a minimum level of indemnity of £500,000 per claim.

Decisions regarding applications will usually be made within 6 months of all the relevant information being received by ICAEW.

Firms will have to
• complete annual return information in relation to probate work;
• ensure that they continue to meet the eligibility requirements;
• comply with the regulations;
• inform ICAEW of any key changes within 10 days;
• and co-operate with ICAEW in relation to inspection and monitoring of such work.

If an accredited probate firm ceases to have any principal or employee who is an authorised individual the firm must cease to carry out such work until a replacement is appointed.

PII insurance and Probate Compensation Scheme

As noted above the minimum level of cover is pursuant to the ICAEW PII regulations subject to a minimum level of indemnity of £500,000 per claim. Under Regulation 2.10 if the value of an estate is likely to exceed the level of cover of the firms PII they must notify the client in writing at the beginning of the engagement of the level of cover and that the level of cover is capped.

Accredited firms and firms that were accredited will also have to comply with the Regulations of the ICAEW’s Probate Compensation Scheme.

Contact partner, authorised individuals, HoLP and HoFA

Anyone carrying out or controlling ‘authorised work’ for an accredited firm must be individually authorised by ICAEW or another approved regulator. 

To achieve authorisation under the ICAEW the individual must attend a course and pass an assessment covering topics specified in the Regulations (see SWAT UK's Certificate in Probate and Estate Administration). 

A licensed firm must appoint a Head of Legal Practice (HoLP) who must be an authorised person and will be the contact partner. In addition they must appoint a Head of Finance and Administration (HoFA).

The contact partner can designate appropriately qualified principals and employees as ‘authorised individuals’.

HoLPs and HoFAs must be nominated to ICAEW on the prescribed form and must demonstrate that they are fit and proper. 

The HoLP is responsible for ensuring that the firm, its principals and employees comply with the Probate Regulations, other than regulation 3.8 (clients’ assets) and that non authorised persons do not do anything to cause a breach of the regulations. If there is a breach of the regulations the HoLP must report this to ICAEW as soon as practicable. The HoFA is responsible for ensuring that the firm complies with regulation 3.8 (clients’ assets) and reports any breach of this regulation to ICAEW.

It is essential therefore that the HoLP and the HoFA have sufficient seniority within the firm to ensure that others will act on their instructions and are able to report freely to ICAEW should be need arise. Where principals are authorised individuals it is envisaged that one of them will be the HoLP. The HoFA should be a principal who is an individual and have the necessary qualifications to perform that duty with ‘competence and skill’.

A person may be disqualified from holding any of these positions if they breach their duties under the Act.

Complaints procedures

The Legal Services Act requires that accredited firms have procedures for dealing with complaints. Clients should be notified of their right to complain, who they should complain to in the firm and their right to complain to the Legal Ombudsman should their complaint not be dealt with satisfactorily. The person within the firm to whom complaints should be addressed would normally be a principal in an ‘authorised firm or the HoFA within a ‘licensed firm’.

SWAT UK's Certificate in Probate and Estate Administration


 

March 2014 

 

Disclaimer
This article is published with the understanding that SWAT UK Limited is not engaged in rendering legal or professional services. The material contained in this article neither purports, nor is intended to be, advice on any particular matter. This article is an aid and cannot be expected to replace professional judgment. SWAT UK accepts no responsibility or liability to any person in respect of anything done or omitted to be done by any such person in reliance, whether sole or partial, upon the whole or any part of the contents of this article.