Lenders review solos

Sole practitioners have received a boost after several mortgage lenders did a u-turn over their refusal to instruct them and have backed calls for the Solicitors Compensation Fund to offer clients greater protection.

The turnaround by Mortgage Express, Portman, Claycross and Prudential/Egg follows months of discussion between lenders, the Law Society and the Sole Practitioners Group (SPG) over concerns that the fund does not offer enough protection in cases of fraud, which lenders contend solos are most prone to.

Last year, Britannia Building Society became the first big name to begin reappointing sole practitioners.

Bernard Clarke, communications manager at the Council of Mortgage Lenders, said there was still reluctance to appoint solos.

'We would like to see improvements to the compensation fund for cases relating to the use of sole practitioners,' he said.

SPG chairwoman Sue Carter agreed that the situation would improve dramatically if the way the fund operates is changed.

'The problem is that it is a discretionary fund of last resort, and does not pay consequential losses,' she explained.

'It will not pay interest, nor in some matters, costs.

Neither will it generally compensate for monies lost through dishonesty, other than the actual monies misappropriated.'

A Law Society report into the operation of the fund is expected later this year.

Welcoming the lenders' moves, policy director Russell Wallman said: 'The great majority of lenders recognise that conveyancing sole practitioners, like other solicitors, are entirely reliable and trustworthy in the work that they do, and are happy to work with them on that basis.'

Paula Rohan