Law Society of Scotland “extremely concerned” about Nationwide’s panel cull.
The Law Society of Scotland is holding discussions with Nationwide Building Society following the UK-wide review by the building society of its solicitors’ panels which is reported to be reducing the panel from approximately 700 to 500.
Ross MacKay, convener of the Law Society’s Property Law Committee, said: "We remain extremely concerned about the long term impact of the review. It is yet another panel reduction exercise by a major lender which is likely to have a detrimental effect on solicitors and on members of the public who may not be able to go to their solicitor of choice to carry out conveyancing work."
The Law Society of Scotland report that Nationwide has said the firms accounted for less than 1% of its new business north of the border during the past year. The review is in addition to an ongoing "dormancy" exercise, under which Nationwide has been removing firms which have not carried out any new security work for it within the past twelve months.
Nationwide’s review will also introduce a "minimum volume threshold", which will result in firms being suspended from the panel if they have carried out fewer than four transactions within the past year. Firms will be able to appeal against suspension on two grounds, either that the number of Nationwide transactions is unrepresentative of the firm’s conveyancing activity overall (i.e. the firm undertakes a minimum of 50 conveyancing transactions per year) or that the firm meets a particular need that it is important for the local or national market to retain.
At the same time Nationwide is undertaking a "revalidation exercise" to update its records. This will involve the collection of extensive data about solicitors and their firms. Firms which remain on the panel will be required to upload this data through a secure on-line facility. However unlike Santander which introduced a similar scheme last year, Nationwide is not set to impose any charge on panel members.
Mr MacKay said: "In the case of Nationwide, over 20% of existing panel firms will be removed through this complex process including those which will have provided an exemplary service for their clients, including lenders."
"While we have been assured by Nationwide that it has taken steps to ensure there is no loss of services within any geographic area, it would appear that these new measures take little account of the Scottish jurisdiction, are disproportionate to the actual risk of mortgage fraud, could threaten the continuing viability of some firms and will inevitably inconvenience its own customers.
"We now plan to meet with Nationwide to discuss its proposals in more detail in light of Scottish practice."