In an AGM last year the Law Society of Scotland agreed to examine a potential change to Rule B 2.1.4 which governs joint representation for Scottish conveyancers. A working party to review this rule was set up. Specifically sub-clause (f), of the rule provides an exemption to the general bar on acting for more than one party where conveyancers act for borrowers and lenders.
Today’s Conveyancer has today been advised that the recommendation from the Working Party is that Sep Rep becomes mandatory and sub clause (f) be removed.
This recommendation will be voted on at the next AGM which is set for later this month.
Any change north of the border could have a knock-on impact in England and Wales where calls for mandatory separate representation have been dismissed by the Law Society of England and Wales.
The views of bodies such as Council of Mortgage Lenders (CML), the Building Societies Association and the British Banking Association and individual lenders were sought along with the views of Consumer Focus Scotland and CML Scotland.
The consultations found advantages, such as a clarification of solicitors’ responsibilities, a reduction in the number of claims against the Master Policy (the Scottish Solicitors collective professional indemnity scheme) and a reduction in panel management costs for lenders. Of course, one of the biggest disadvantages has to be an increase in costs to borrowers.
There is a mixture of views within the profession and, of the 32 firms and individual practitioners who have submitted their feedback to the working party, 69% were in favour of the proposed change, 25% were opposed to it and 6% remain undecided. Some members believed that such a change would have a negative effect on the existing system, while others opined that it is no longer possible to adequately manage the risks involved with acting for both lender and borrower.
Allan Radlow, senior partner of McVey and Murricane commented:
“Having the fourth largest property practice in Scotland covering both volume lending work and transactional conveyancing, we believe this is a retrograde step for the consumer and the profession. While we understand the concerns about lenders more aggressively policing the CML Handbook, the reality is that practically dealing with the lender’s interest should be uppermost in the mind of the conveyancer. We submitted suggestions to the working party that those acting for lenders and borrowers should be firms where such expertise was available along with sufficient volume and quality assurance. In pursuing this stance the profession appears backward looking and anti-consumerist; our concern is that ultimately it may be a case of turkeys voting for Xmas.”
If the vote at the next AGM goes in favour of the recommendations this could see the changes take effect sometime in September. What this means for sep rep in England and Wales we don’t know but I’m sure the profession as a whole will be waiting with baited breath for the outcome.
