Santander has agreed to pause the ongoing quarterly review of its conveyancing panel and postpone the next review as talks with the Law Society over the process continue.
The Society contacted the bank earlier this month seeking an urgent meeting to raise concerns over the review. It said the review resulted in the removal of hundreds of solicitors from its panel, even after they had paid over £100 to have their membership reviewed.
Discussions with the Society began recently. In a letter to solicitors, seen by the Gazette and due to be published on the Law Society’s website tomorrow, the Society’s chief executive Desmond Hudson says: ‘Whilst that dialogue continues, the bank has agreed an immediate pause in this review process and the next quarterly review has been postponed.’
Santander’s review includes removing firms that fail to meet its transaction volume requirements – a criterion that Hudson says is a ‘blunt instrument’, particularly when a lender looks only at transactions done for itself rather than all conveyancing done by a firm.
While accepting that ‘true dormancy and unexplained reactivation are potential indicators of fraud’, Hudson says banks should consider an applicant firm’s total activity in the market.
According to the letter, the bank has ‘to a degree’ recognised the limitations of its methodology. ‘In our discussions, it recognised that unusual market conditions make it inappropriate to assume that low levels of activity with one particular lender equate to lower activity across the market,’ says Hudson.
The letter says that if Santander recommences its review, firms appearing to be inactive or dormant will not be removed suddenly. Instead, the bank will take a more ‘collaborative’ approach with firms in identifying their wider conveyancing activity.
Hudson tells solicitors that the regulatory environment established by the Financial Services Authority requires lenders to proactively manage their panels, saying that ‘much as we might prefer it otherwise, banks are under no obligation to maintain solicitors on their conveyancing panels’.
‘However, the Law Society has and will continue to ensure bank mortgage customers can choose to be represented by solicitors – high-quality legal advisers,’ he says.
Hudson adds: ‘Dialogue between Santander and the Society is continuing.’