Could acting for both sides change the nature of the conveyancer’s role?
The Gazette reported recently that the Legal Services Consumer Panel, which is the body set up by the Legal Services Board to advise it on what is in the best interests of consumers, is generally in favour of letting one solicitor act for both buyer and seller in a conveyancing transaction.
The Solicitors Regulation Authority is proposing that this should be allowed, provided there is not a ‘substantive’ conflict of interest. It is consulting on the issue at the moment.
From the client’s perspective, the potential benefits are obvious. How much time is spent passing correspondence between the two lawyers? That would be eliminated in one fell swoop and would surely lead to speedier transactions.
Is there any danger to the consumer? Given that a solicitor conducting a conveyance is a highly qualified member of a regulated profession, there shouldn’t be. And, after all, licensed conveyancers are already allowed to act for both sides, without any apparent problems.
But that is not to say that a solicitor acting for both parties will necessarily find the experience plain sailing. It will involve a change of mindset.
At the moment, a solicitor’s primary objective, within their professional rules of course, is to push forward the interests of their client. If, taking an example from my own recent conveyance, a search indicates that chancel repair insurance is needed on a property being purchased, the first thing the purchaser’s lawyer will do is to try and press the vendor to pay the premium. But what if the vendor is also a client? The lawyer will need to take on a new role of assisting the two parties to reach a sensible solution.
When tricky issues arise, instead of approaching the problem from their usual purchaser or vendor perspective, solicitors may find themselves acting as something of a mediator between the two sides. But they will have to tread a very careful line between the two sides.
Precisely how the new rule would operate is still uncertain. Which party would instruct the lawyer, for example? I imagine that the recommendation of an estate agent, who is already in a sense acting for both parties, would be likely to play an important role – and, of course, a bigger fee at stake for the lawyer is bound to drive up the cost of the referral.
Potentially, a solicitor acting for two sides could also be instructed on the related sales or purchases of both sides, leading to a bonanza of fees.
Acting for both parties will be a significant gain for firms that win that work, but looking at the bigger picture, there might be a downside for the profession. If using just one solicitor per transaction becomes a popular trend, it could contribute to a reduction in the overall number of conveyancing solicitors that the market needs, in a section of the profession that is already shrinking due to the poor housing market.
Competition for the prize of acting for both parties will be strong, but the fees gained will inevitably be less than the sum of what would have been charged by a separate lawyer for vendor and purchaser. The consumer will be the real winner.
And of course there is one more, slightly tongue in cheek, reason why acting for both sides could prove to be a bad move. Conveyancers are more than used to taking flak from disgruntled clients. But if they act for both parties, they will no longer be able to blame any delays on the other side’s solicitor.
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Comments
obviously not the same conveyancer wearing both hats
Fine the same office acting, as we can do not under certain situations.
Bear in mind that only solicitors should actually be permitted to do conveyancing, as anyone else is not properly and as well rounded in their legal training.
So use the same office, but as a solicitor myself, I would never want to wear two hats, as I'd be demanding chancel insurance of myself, and replying 'no, self, you cannot have it'
Or, 'come on self, I want indemnity insurance' with an immediate retort ' no self, take a hike'.
Can you imagine the letters between oneself.
Ok kidding aside, same office acting on both sides should be 100% permissible, and the sooner the better.
The Law Society, the courts and the government do not look out for solicitors, so it is about time that they get some good news.
What conflict?
Its about time solicitors in conveyancing transactions were permitted to act on both sides and in fact there is a strong argument it should be the same solicitor all the way down the chain. Far too much time and blame is spent pointing the finger at another solicitor who hasn't done what he is supposed to do. Ok there are still other parties involved but the process would be simplified somewhat. Citing conflict of interest is yet another excuse but only the most serious cases should involve another solicitor. In the example above concerning insurance, what's wrong with the parties splitting the cost?
Tell you what-lets just
Tell you what-lets just eliminate solicitors from the transaction entirely!
It'll be much simpler all round! The solicitors should only come in when there is disagreement as to various points on the transaction and litigation is needed.
A fine example would be, for instance, when the parties won't agree to "split the cost". We could all charge off to court to settle the matter-won't that be simpler and quicker (and less expensive too)?
Yes, job done!
Acting for both sides in a conveyancing transaction
It may be cheaper for consumers, but is not in their interest. For real conveyancing there are constant possibilities for conflict. Queries over what is the usual deposit, whether the other party is having financial difficulties, reasons for delays, different time scales for one party that should not be disclosed. There can be problems over a survey. How can a solicitor advise properly if the is a conflict over renegotiation? If solicitors can't see that both parties best interest cannot be satisfied, then perhaps they should revise their own understanding of the meaning of "conflict of interest". If solicitors cannot advise independently, then who will protect consumers.
Acting for both sides
I'm sorry, but this seems to me yet another example of sacrificing our profession's independence and integrity at the altar of the sacred cow of cutting costs. As the article correctly points out, it means we will all be even more at the mercy of estate agents who will charge even higher referral fees if they can pass over two clients at the same time (not that my firm has ever paid referral fees, and if the whole profession took that attitude rather than resorting to bribery to obtain clients then everyone would be better off - apart from the agents of course).
It's true that in the majority of conveyancing matters, no significant conflict of interest arises - but the risk is always there. Yet again conveyancing is being dumbed down, with the implication that it's a simple matter of shuffling papers around which anyone can do. It isn't! And I am also disturbed at the resurrection of the old chestnut about solicitors being blamed for delays. Delays are virtually never down to the solicitors - it's almost always searches, mortgage offers, or simply one of the actual parties not being in any hurry.
Please let us not descend to the level of licensed conveyancers. With the latest news that legal executives and others may soon be able to obtain grants of probate, the question as to why on earth we bother being solicitors, with the attendant duties, obligations and expense, becomes increasingly difficult to answer.
In response to Nick
In response to Nick Hutchinson, there is absolutely no point whatsoever in being a solicitor.
The responsibilities are enormous, liability effectively absolute, and the rewards pitiful.
According to the juciciary, we are "gatekeepers", but we are not rewarded as such, we are officers of the Court but receive no respect at all from the judges who regard us as lesser forms of life.
The profession is dead, it just hasn't realised it yet.
conflict
As if acting for both lender and buyer has not been enough. I guess the savings in the costs to the consumer will be paid for by the extra indemnity cost for the inevitable complaint by one of the two clients when things go slightly awry. Happy times.
acting for both sides
Apart from difficult legal niceties over chancel repairs etc. - here are several common scenarios
I am acting for both sides - husband buyer tells me he has just had major row with wife buyer, that they may or may not be buying now, so go slow while they sort out their differences. Do I tell seller client ?
I am acting for both sides - seller tells me they have just been gazumped on the house they were buying and are busy looking for another, not to tell buyer at this stage . Do I tell my buyer client?
I am acting for seller and divorcing buyer, who is relying on divorce settlement (in course of being negotiated) coming through on time for early exchange / completion - do i start notifying seller about twists and turns of buyer's divorce negotiations
In all cases, I am damned if i do and damned if I do not
Acting for BOTH sides
Bad idea in fact its a very very very bad idea. Everything might be hunky dory at the beginning but watch what happens when the buyer or seller has a problem & what if you discover there's a problem with the neighbours do you tell yourself to cancel the sale or do you demand, of yourself, that the sale go ahead
I think its a mad idea I'm not even sure 2 solicitors working for the same firm should be involved in the same transaction. Whats happening to seeking 'independent' legal advice. With the best will in the world can anyone be sure such advice is totally independent
Acting for both sides
I don't do conveyancing any more - more kicks than ha'pence, so perhsaps I should shut up, but here's my tuppenceworth.
If a client goes to a Solicitor, it is because he wants someone to look out for his interests. Most property transactions start out with everyone pulling the same way, but some 'go sour' later. A Solicitor acting for both will need to recognise when that time has come, and s/he can no longer serve two masters. Which will s/he continue to act for? If litigation ensues, won't the other party say that the Solicitor has been told things that s/he wouldn't have been told if the other party knew s/he'd end up as an adversary? Will s/he get paid for the work done for each party up to the date of the 'falling out'?
What about liability for alleged bad advice to either party, given in the course of being neutral?
What looks simple can end up awfully complicated!
The analogy that comes to
The analogy that comes to mind is the old adage "a lawyer who represents himself has a fool for a client".
I don't know why we're having this conversation. The only winners will be the insurance companies who will hike up the professional indemnity premiums for conveyancing, and the assigned risk pool, will clean up from the fall out.
Think of two of your worse clients and imagine them on either side of a transaction - I'm going to lie down!