A Competition Appeal Tribunal (CAT) has ruled that The Law Society “abused its dominant position” in forcing thousands of law firms to train through its widely-recognised Conveyancing Quality Scheme (CQS).
The news comes after claimants raised concerns that the that the Law Society’s requirement for more than 3,000 firms to ‘purchase’ anti-money laundering (AML) and mortgage fraud training from it as compulsory requirements for their CQS accreditations was ‘anticompetitive’ – a view which was strongly upheld by the CAT.
Mr Justice Roth announced that The Law Society had effectively abused its position of power by “obliging CQS member firms to obtain” the paid-for training.
He added that Nationwide Building Society’s move to make CQS accreditations a mandatory requirement for panel membership in April 2015 unfairly increased the Law Society’s position of power, while simultaneously tying in more than a third of the lending market.
The CAT has granted an injunction to force the Society to re-open the market to competition. Damages are to be decided at a later date – but the costs of the case are estimated to be around £1m, according to reports.
The CAT also rejected the idea that iCQS training was loss-making, after The Law Society produced a “disappointing” series of figures which were found to be “wholly unsatisfactory”.
It said that is was “impossible to reach any reliable view as to whether or not the CQS was loss-making, at least after 2012 when the training income significantly increased”, the CAT said.
In response, Robert Bourns, Law Society president, insisted that: “For the vast bulk of the time CQS training has been available, it has been compliant with competition rules.
“I am certain that in setting CQS up, The Law Society acted in good faith and in the public interest,” he added.
“We note the decision and have and will take steps to avoid similar issues in the future,” he said.