No guarantees

Brian Marson expressed the opinion that using guarantees (title insurance) as part of the conveyancing process could reduce both exposure to negligence claims and ultimately the cost of professional indemnity insurance (see [2002] Gazette, 28 February, 16).

There is an alternative view.

The cost of purchasing a guarantee with every conveyancing transaction is not insignificant.

Why should clients accept this additional charge in order to protect themselves against mistakes made by their solicitor? While it could be argued that professional indemnity insurance costs are ultimately passed onto the client anyway, the amount involved is a fraction of the premium payable under a guarantee.

Whether or not an insurer would offer reduced professional indemnity premiums as a result of using guarantees is also debatable.

Even if a discount is offered, the cost to the client is bound to be disproportionate compared to the benefit to the conveyancer.

The advantages of an efficient e-conveyancing system are clear but not the effectiveness of the type of guarantees suggested by Mr Marson.

Conveyancers might also want to consider their reduced role if guarantees ever remove the need for expertise.

It is unlikely that the use of title insurance will ever become widespread in the UK because of the established, well-developed system of professional indemnity insurance and state land registration system.

In addition, legal indemnities are available to cover specific defects in title for individual cases, preventing the scenario where every house buyer is penalised for the cost of an unwarranted guarantee.

Mr Marson predicts the use of guarantees will bring a change where everyone is a winner.

It is doubtful whether many solicitors and clients would share the same conviction.

Jenny Gerrard, marketing communications executive, Countrywide Legal Indemnities