Some solicitors feel enslaved by the financial power of lenders. Now e-conveyancing could help them gain influence, writes Grania Langdon-Down


When asked to characterise the relationship between lenders and solicitors, Denis Cameron, chairman of the Law Society’s conveyancing and land law committee, pauses: ‘I nearly said masters and slaves.’


Mr Cameron, who will be chairing a session on ‘Working with lenders in a new era for conveyancing’ at the Law Society’s annual conference next month, continues: ‘You feel a bit like that at times – lenders are so powerful but the buck always stops with the solicitor. Solicitors now routinely do work for lenders, effectively for nothing, while they put more and more obligations on us.’


In preparation for the two-day conference in Birmingham, he plans to review the presentation he gave to the Council for Mortgage Lenders (CML) earlier this year on ‘What annoys solicitors about lenders’ – including over-long mortgage offers, poor surveys, retention of money, insurance conditions, trouble in getting deeds, and problems with undertakings on flexi-mortgages. ‘They didn’t all receive it with enthusiasm,’ he remembers.

However, the boot may be on the other foot as CML director-general Michael Coogan takes up his first invitation to be a panellist at such an event. But he says: ‘I am not there to lambast solicitors or to explain lenders’ actions, but to see how we can work together to make things work smoothly for the customer.


As master and slave? ‘No, I don’t think so, though there is clearly a client relationship,’ he says. ‘What is happening is there is a drive for more efficiency across all aspects of the provision of services – not only from the legal profession but financial services more generally.’


While the debilitating avalanche of negligence actions of a decade ago brought by lenders against solicitors has abated, there are certainly plenty of issues for the panellists and audience to get their teeth into – including e-conveyancing, the Housing Bill and home information packs, and problems caused by the latest anti-money laundering regulations.



Mr Cameron says the move towards e-conveyancing is ‘stagnating a little’. He adds: ‘Some of the more recent processes, such as the electronic notification of discharge (END), have been a nightmare, although the new electronic discharge system, which the Land Registry has been piloting with two lenders, is working well.


He suspects home information packs will be a key topic as experts predict a slowdown in the housing market. ‘The government wants to rush the packs in but they are bound to result in fewer properties coming onto the market, which could cause a lot of problems in a low market. Even if you defray the upfront cost of the packs, which will be about £600 to £1,000, it has to be recouped at some point.’


He says another concern is the risk involved in conveyancing, where a misspelt name can result in a huge claim. ‘I don’t think solicitors factor enough of the risk into their costs. Each residential conveyancing matter is probably costing them between £100 and £150 in insurance premium.’


For Mr Coogan, the conference gives him the opportunity to raise two major issues. ‘The first is to give our current views on the Housing Bill and its implications for home information packs and the conveyancing process. There is a very long list of issues that need to be resolved before it can be implemented. There is a significant question mark whether the government’s proposed January 2007 start date is realistic.


‘The second is a call to arms to solicitors to recognise that e-conveyancing is going to happen and they need to be in the vanguard of those introducing it. From the CML perspective, we will be asking the Lord Chancellor to make it compulsory as soon as possible rather than let it drift in.’



He predicts that one spin-off from e-conveyancing will be that companies – possibly lenders or property companies – will set up ‘chain-breaking services’, so that when a chain is about to break, they will step in and sell the property on later to keep the chain going. ‘They don’t exist at the moment because companies can’t manage the risk. But once you have e-conveyancing, you can see the whole chain of transactions.’


For panellist Helen Davies, chairwoman of the Law Society’s property section and a partner with Cornish high street law firm Peters Langsford Davies, the conference gives solicitors the chance to consider the relationship between lenders and solicitors, which she describes as one of ‘mutual frustration’.


Solicitors often feel they are dealing with ‘faceless’ organisations, via infuriating call centres, she says, adding: ‘I am keen to find ways for mortgage lenders to engage more effectively with the profession as a whole. Part of that is the profession doesn’t always understand what the drivers are for the lenders and vice versa. I hope there will be some interesting debate about issues around redemption, timecales and about working towards e-conveyancing.’


She says her four-partner firm sees e-conveyancing as ‘inevitable’, adding: ‘We don’t compete for work on price – so if e-conveyancing helps us to help our clients, then great. It’s hard to defend the current system to clients.’


Fellow panellist Richard Barnett, senior partner of Stockport bulk conveyancers Barnetts, is also keen to address the relationship between solicitors and lenders.


He says: ‘Solicitors have to adapt to the changing market. We run a very big bulk conveyancing practice and gear a lot of our processes to the requirements of the lenders. That is going to be the future. If we don’t adapt, the profession will lose the work.’


However, he does not see the relationship as being that of master and slave. ‘Not at all. We have let ourselves be slaves in the past when we have had some great, innovative ideas but haven’t communicated them to our clients. From the lenders’ point of view, we are the black hole – they issue an offer and then don’t have a clue what happens until there is a request for draw down.


‘Lenders should be part of that process. We are trying to include them so they can come into our systems at any times to pick up reports electronically and case-track without me having to do anything.


‘My vision of the future is that there will be two types of conveyancer – bulk firms like mine, which give a good service at a reasonably competitive price, and those serving clients who want their hands held during the transaction and are prepared to pay for it. Clients should have that choice. What we can’t do is what we have traditionally tried to do, which is give a bespoke service and charge £200 for it.’


Another issue Mr Barnett wants to raise is referral fees. ‘If the ballot on referral fees comes back saying “no”, there is a massive danger that a lot of solicitors who are doing bulk work will consider becoming licensed conveyancers. If that happens, it could be that the whole of conveyancing is lost to the profession. Referral fees should remain. I want everything out in the open rather than under the carpet as though it is some dirty deed. I am a solicitor and proud of it, but if referral fees aren’t allowed, I would have to consider becoming a licensed conveyancer.’


The final panel member is Peter Collis, Chief Land Registrar and chief executive of the Land Registry. He says: ‘It is always interesting to hear feedback about our service – good or bad. I am not looking to set myself up for an hour of mud-slinging, but I do welcome the chance of hearing directly from those on the other end of our service.’


He says the debate has moved on from asking the question ‘is the future e-conveyancing?’ to ‘how do we make it work as well as possible?’. He says: ‘The Land Registration Act 2002 gives ministers the power to compel people to use e-conveyancing. However, our approach is to try to make it so attractive people will want to use it.’



Grania Langdon-Down is a freelance journalist