The last two years or so have been a problematic time for conveyancers as the effects of the recession have seen a fall in transactions, a severe and continuing hardening of mortgage-lending availability and terms, and continuing problems for solicitors in securing access to lenders’ residential conveyancing panels.

I know from my postbag and the calls made to the Society that this has been a time of great anxiety for solicitors, particularly smaller firms. The Society has recognised this as a significant problem and has devoted, and will continue to devote, considerable resource to assisting members.

While there has been some progress, there remains much still to do. Above all, there remain problems and uncertainty for law firms that have had, continue to have, or plan to have, the widest possible lender panel membership. For the majority of firms involved in conveyancing, membership of all panels is a prerequisite to doing business.

At the outset of this problem, the Society sought to engage constructively with all stakeholders, including the government, consumer bodies, and, above all, lenders and their representative bodies – the Council of Mortgage Lenders (CML) and the Building Societies Association.

Of course, we have also considered all available options and weighed carefully the choices open to us, whether that be litigation or a more public campaign. If that becomes necessary, then the Society will not shrink from such action.

I concluded, however, that for a variety of reasons our best course was dialogue and discussion, and a determination to build an understanding of the needs of both parties. We could not lawfully urge the profession to boycott Santander for charging fees – that would be illegal. Nor could we turn to judicial review proceedings, as the lenders are private entities.

With this in mind, the Society put forward proposals to mutually agree an objective set of criteria for the management of panel admission and removal. We sought to work with the Financial Services Authority and lenders to offer practical solutions, and to enable lenders to discharge regulatory obligations about panels in the most efficient and economical way.

Almost two years ago, we told lenders that data needed by them to meet at least in part these obligations would be provided by the Society free of charge. We did so because we believe that maintaining the widest possible panel management arrangements is in the combined interests of lenders, solicitors, regulators and the house-buying public.

Through the Conveyancing Quality Scheme (CQS), we have also sought to build a robust system that will enable the sharing of data to suppress and detect fraud. Although the Law Society has made strides through productive engagement with the CML and its members, progress has been slow and it will only be next month that we pilot a trial of data sharing.

The Society is deeply disappointed by Santander’s decision to begin charging solicitors a fee to apply for panel membership and a subsequent annual compliance check. This is a step in the wrong direction and runs counter to the collaborative efforts of the wider lending and conveyancing community. Since that decision, we have met with the CML and representatives of the other major lenders and reaffirmed our commitment to work for a common solution.

Common approach

The lenders at that meeting confirmed their desire to work for a ­common approach to this issue. Santander’s decision will increase costs for conveyancers and make house-buying more expensive. There were, and are, viable alternatives. Santander, while claiming this is a justified move to guard against risk, has chosen not to take up the Law Society’s offer to freely provide the information it requires from firms, for which it is charging.

While at first glance the £199 fee (and yearly £99 annual fee) might not seem a crippling amount to pay (although for some firms that fee alone will be felt), we have raised the concern with CML that repetition of this fee-charging trend by other lenders could see solicitors having to pay the fees repeatedly to provide exactly the same information to each lender to which they apply for panel membership.

In that scenario, the outcome could see solicitors applying for several panels, paying hundreds if not thousands of pounds to provide the same information to individual lenders.

This will not only affect solicitors - there will be a knock-on effect for consumers, as firms will have little choice but to increase the fees they charge to clients for conveyancing work to cover the cost of these fees. At a time when those taking out a mortgage are seeing high mortgage administration costs imposed on them by lenders, further cost increases are damaging.

As we continue to talk to lenders, we hope they will take up our offer of providing the information they require for panel membership for free, via CQS for example, instead of charging solicitors.

This move comes despite the fact that we are about to begin the pilot in data sharing with lenders - a process that will see the Society provide data on firms for free. I want to make clear that we will be willing to provide data to any lenders with solicitors’ panels free of charge - and we will be keen to discuss how we go about that with lenders.

One of the concerns we have expressed relates to the uncoordinated tests some lenders are applying about frequency of completing a mortgage security with them over the last 12 months. The current position, where a small firm is removed from Lender X’s panel because it has not completed enough transactions but may have done countless others with lenders Y and Z, is clearly unfair and misconceived.

Assessment of ‘inactivity’ on a lender-by-lender basis is in no one’s interest. We argue that if inactivity is to be a criterion, it should be in relation to a firm’s total transactions rather than specifically with one lender. Sharing data via CQS, for example, could avoid this deeply unsatisfactory situation. Lender panel cuts have not gone away and the decisions over which firms are cut remain unclear if not arbitrary.

So, in the meantime, we plan to operate on a number of levels. We have established with some lenders appeals processes against panel removal. We have also taken the issue of lender panel management to business secretary Vince Cable, setting out details of lender panel removal, highlighting the potential consequences for small and medium-sized solicitors’ firms.

In particular, we have expressed concerns about the reliance by some lenders on numerical criteria rather than quality of service provided by these firms, as well as the detriment to the consumer in being prevented from choosing the solicitor of their choice.

These concerns have also been directed at MPs via a briefing pack on the matter, for which firms themselves can highlight the issues to their own MPs, while the launch of the CQS itself has been done with wide support from the mortgage and property sectors.

CQS is helping to restore confidence in the sector and has gone beyond our expectations in its success. We set ourselves a target of 600 accredited firms by the end of the year. We have already passed that number. Of course, high numbers in accreditations is not a panacea for the problems in the market, but lenders are taking notice, and it is possible professional indemnity ­insurers are as well.

Most importantly, it seems that consumers are taking notice of CQS. Many CQS firms are reporting that their business has increased since securing CQS. Our marketing campaign is measuring the number of online searches for CQS firms, while media coverage of the scheme is the highest of any Law Society-related matter this year.

There are naysayers, querying the scheme’s success, even though it is in its infancy, but when you look where the criticism is coming from it is clear that CQS is already seen as a threat to other parts of the conveyancing market. The fact that CML issued a memo to its members recently, listing all CQS-accredited firms and reminding them that only firms regulated by the Solicitors Regulation Authority can apply for CQS, is clear evidence that the scheme continues to gain recognition in the residential conveyancing sector.

Even criticism of its lack of client focus falls down. A central pillar of CQS is its Client Care Charter, which is thorough and a key reflection of a more customer-focused era in legal services. Even Santander’s move to make CQS a prerequisite for new panel applicants is another boost for CQS members.

The Society will continue to represent and protect its members’ interests when it comes to lender panels, and maintain open channels of communication with the lenders.

We have come a long way from the beginning of the arbitrary, large-scale lender panel cuts, but, especially while the property market remains quiet, there is more work to be done with the lenders. Through CQS we can further build the reputation of solicitors as the advisers for the house-buying and -selling public. Our ability to build, via CQS, a practical resource, which places solicitors as the trusted adviser of house-buyer and lender alike is there to be seized by the profession.

Together, the profession and the Society can do so.

Desmond Hudson is chief executive of the Law Society