Regulatory issues in the performance of conveyancing services for legal practitioners (Scenario 2)

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Conveyancers are seeing business opportunities in the provision of conveyancing services to legal practitioners. Before entering into any such arrangement, however, there are range of factors that conveyancers should consider, such as the potential legal implications for their business, whether the arrangements will permit regulatory and legislative requirements to be met, and what, if any, professional indemnity insurance policy issues are involved. In this article, we consider two scenarios in respect of their potential legal implications.

Scenario 2

A legal practitioner and a licensed conveyancer wish to refer clients to each other under either a formal, i.e. written, or informal arrangement. The arrangement is that the party receiving a referral will pay the other party a fee for that referral. The referral arrangement is not reported to clients, i.e. there is no disclosure that, in making the recommendation, the referrer will be rewarded financially.

This scenario gives rise to the following issues.

Schedule 3 of the Conveyancing Licensing Regulations 2015 – Rules of Conduct


Rule 5 prohibits a conveyancer who refers a client or prospective client to a “service provider” from falsely representing to the client (or prospective client) that the service provider is independent.

Rules 5(2) and (3) provide that a conveyancer that is in a “commercial relationship” or a “business relationship” with another party is not considered to be “independent.” Similarly, a conveyancer is not “independent” if they receive a “rebate, discount, commission or benefit” for referring a client. In the circumstances outlined above, a referral arrangement where a fee or commission was paid would be one whereby the conveyancer could not say to the client that the legal practice was “independent” of the conveyancer.

Rule 15(4) provides that if the “service provider” is not independent, the conveyancer must disclose to the client or prospective client the nature of any relationship the conveyancer has with the service provider (in this case, the legal practitioner), and the nature and value of any rebate, discount, commission or benefit the conveyancer may receive.

Rule 16 states that “a licensee must not offer to provide to any other person any gift, favour or benefit, whether monetary or otherwise, in order to induce any third party to engage the services of the licensee as conveyancer in respect of any matter.”


These rules would prohibit a licensed conveyancer making an offer to a legal practitioner (for example) to provide a monetary fee or reward in return for the legal practitioner encouraging a person to engage the services of the licensee/conveyancer.

Professional indemnity policy issues


Unlike the previous scenario above, there are no apparent professional indemnity policy issues arising in referral arrangements of this type. Naturally, any specific written referral arrangement would need to be reviewed before any confident or conclusive opinion could be offered.

Resolving the issues

Rule 16 of the Conveyancing Licensing Regulations 2015 would appear to prohibit a conveyancer from approaching a legal practice and offering to reimburse the practice by way of fee or benefit for any referral.

If a licensed conveyancer intends to refer a client or prospective client to a legal practitioner and, in return, receive a fee or commission such that Rule 15 comes into play, it is recommended that the conveyancer obtain legal advice before entering into such an arrangement refer the arrangement to NSW Fair Trading for sanction or approval and, in doing so inform NSW Fair Trading that the conveyancer proposes to establish a practice of providing written notification to clients who are referred along the lines of

“I have an established commercial relationship with [law firm], to whom I am referring you. This relationship includes the payment of a commission for any clients of mine that I refer. I expect to receive [dollar value] from [law firm] in respect of my referring you to that firm.”

Peter Moran is a partner in the insurance team at Colin Biggers & Paisley and has over 30 years extensive experience in insurance and commercial litigation.