Legal executives could be granted independent rights to provide conveyancing services from next September, if a forthcoming application to the Legal Services Board is successful.
But conveyancing solicitors have questioned the economic logic of encouraging new entrants into an already overcrowded market, where transaction rates have dropped by 50% since the start of the recession.
ILEX Professional Standards (IPS), the regulator of legal executives, launched a consultation last month on its application for ILEX members to be permitted to undertake all conveyancing work, including those aspects that are classified as reserved instrument activities, without the supervision of a solicitor or barrister.
The proposed ‘Conveyancing Certificate’ will enable suitably qualified members to take instructions, prepare documents relating to ‘real and personal estate’, including land transfers or charges under the Land Registration Act 2002, and lodge documents with or make applications to the Land Registry.
It is understood that IPS will make a formal application to the LSB in December, with approval expected in June, and the new rules coming into force in September, in time for the licensing of alternative business structures.
However, conveyancing solicitors voiced concerns over the proposals. Richard Barnett, chair of the Law Society’s conveyancing and land law committee, said: ‘In a market where conveyancing work has halved, I’d question the economic sense in doing this now.
‘There’s a certain inevitability about it, but the LSB will need to look carefully at whether the training will be given to a high enough standard to ensure consumer protection; whether the business model will be sufficiently robust; and whether it can survive in a market that has contracted by 50%.’
Leading conveyancing solicitor Paul Marsh added: ‘I can’t understand the economic sense of it. There is a massive oversupply of conveyancing firms, and professional indemnity insurance is very difficult for some firms to obtain.’
‘I’d have thought that a small firm of two or three legal executives setting up to do conveyancing is doomed to fail, even if the market picks up,’ he added.
Peter Rodd, partner at Boys & Maughan in Kent, questioned how the consumer would benefit from new entrants coming into an already-overcrowded market where prices were at rock bottom.
Law Society president Linda Lee said: ‘We remain confident that the market fully recognises the best people to undertake this type of work are solicitors’ firms. We will do all we can to ensure the public recognise this, and that solicitors suffer no regulatory disadvantage’.
IPS chief executive Ian Watson said: ‘We are applying for conveyancing rights as part of the general strategy to enable ILEX, through IPS, to become a regulator of the full range of legal services and ultimately to make an application to become an [ABS] licensing authority.’
‘The [conveyancing] market is adverse at the moment, but we’re looking to the future. With the Legal Services Act the need is for new ways of providing legal services, and we think our members can contribute to that,’ he said.