Lloyds Banking Group (LBG) is to review the criteria for membership of its conveyancing panels and reduce the number of firms it instructs using a ‘risk based’ model that it says will allow it to assess firms individually.
The group, which includes Lloyds TSB; Halifax; Bank of Scotland and Birmingham Midshires, told the Law Society it intends to remove firms that have conducted a low volume of transactions on a rolling 12-month period.
It said firms that are to be removed will still be entitled to carry out ‘pipeline cases’ and the panels will remain open to new applicants, who will have to meet the volume threshold within 12 months of membership.
Letters will be sent to those firms affected during the next month.
Following this action, the group said it will look to make further cuts during the rest of 2010 using what the Law Society has been told is a ‘risk based’ model that will enable it to assess firms individually.
Chancery Lane said that although the low-volume threshold would be applied across the board, the group assured it that it will look at each firm on a case-by-case basis to ensure access to solicitors’ advice and representation is maintained in all areas, particularly in rural areas.
Law Society property spokesman Paul Marsh said: ‘The Law Society is disappointed to learn of these decisions by Lloyds Banking Group but recognises that like any client, they are entitled to chose which firms they instruct.
‘We will continue to engage with the Council of Mortgage Lenders, Building Societies Association and individual lenders encouraging them to recognise that a "one-size-fits-all" model is not the best way to address lenders’ concerns in the current economic climate.’
Marsh added that because the Lloyds group provides banking services to a large number of solicitors, this should give it greater understanding of the way firms operate when it comes to carrying out the review.
An LBG spokeswoman said: ‘Following a review of criteria, Lloyds Banking Group has introduced a condition requiring all firms on its conveyancing panel to act on behalf of the group on a regular basis. This ensures that all firms on the panel are fully familiar with the group's policies and processes.
‘We have introduced a volume based threshold to allow us to be satisfied that firms on our panel do a sufficient number of cases to enable them to keep completely up to date with all changes to our processes and requirements. We believe taking this approach is the best way of establishing this. By introducing a specific numerical measure this allows us to apply our criteria fairly and consistently to all firms.’