Britannia retreats on sole practitioners

By Neil RoseThe Britannia Building Society has become the first to cave in to solicitors' pressure and reinstate sole practitioners on its conveyancing panel.And other lenders may soon have to explain their continued refusal to instruct sole practitioners to the Office of Fair Trading (OFT).The Britannia was among a series of lenders warned by the Law Society in April that their refusal is anti-competitive and could be referred to the OFT.Britannia spokeswoman Lise Bulloch said the change was made because 'it is in the interests of our customers to offer them more choice and let sole practitioners on to our panel'.She denied that the shift resulted from solicitors' pressure, saying that several customers had asked to use sole practitioners.

The issue was particularly relevant in more outlying areas, she added.The April letter said the practice is anti-competitive for restricting borrowers' choice of representative.

It may also be indirectly discriminatory as a high proportion of solicitors from ethnic minorities practise as sole practitioners, it suggested.Russell Wallman, director of the Law Society's policy development unit, welcomed the Britannia's move, but said the Society will be watching closely to see how it works in practice.

He added: 'Although one or two lenders have modified their positions, we expect that a complaint [to the OFT] will be made shortly in respect of those who have not.'Fiona Hoyle, senior legal adviser at the Council of Mortgage Lenders (CML), stressed that 'there is a large number of lenders that do appoint sole practitioners to their panels, and there is a general recognition of their value'.Lenders refusing to use sole practitioners do so because of their own and others' experience of fraud and negligence, Ms Hoyle explained.

Various sources of data, such as the Solicitors Indemnity Fund, indicated that sole practitioners are a greater risk, she added.Ian Lithman, chairman of the Sole Practitioners Group, contended that lenders were mainly concerned with the problem of recovering money after frauds.

Whereas other partners in a larger firm often make up a default, those defrauded by sole practitioners have to apply to the Solicitors Compensation Fund, from which payments are discretionary.Ms Hoyle confirmed that the CML will make a submission to the current review of the fund's operation.Mr Lithman said the vast majority of sole practitioners are as good and honest as partners, if not more so.

'It's like a man living on his own,' he said.

'He has to do it all and do it well if he's going to survive.'l The Sole Practitioners Group is calling for solicitors to send it letters of complaint from clients who have been prejudiced by lender discrimination as evidence for the OFT.