Separate legal representation for homebuyers and mortgage lenders could reduce solicitors’ share of the conveyancing market and hand work ‘on a plate’ to other sectors, the Law Society has warned.
Changing solicitors’ practising rules to require separate representation in residential conveyancing work has been proposed as a possible response to lenders’ moves to restrict the size of their legal panels. But the Law Society said this week that pressing for such a change to be made for solicitors would push lenders and purchasers towards non-solicitor conveyancers who would not be bound by the same rule.
Chief executive Desmond Hudson said that few lenders would wish to go down the route of requiring separate representation, and if it were to be introduced, the majority would instead turn to other sectors. ‘Does the profession really want to hand residential conveyancing work on a plate to their competitors?’ said Hudson.
Even if licensed conveyancers and their regulator also opted to go down the separate representation route, Hudson said there would still be a threat from others who might enter the market without being regulated by either the Solicitors Regulation Authority or the Council for Licensed Conveyancers. ‘This is the reality of the Legal Services Act,’ said Hudson. ‘It has created competition and we, the Society, are looking at how to meet that challenge, not make it harder for our members.’
Chancery Lane also warned that separate representation would be detrimental for consumers by increasing costs and introducing delays as two sets of legal advisers would have to look over the same work.
Hudson said: ‘In the old days separate representation looked like the most appealing option, but in the new legal services market it would be detrimental and not provide the answer for our members.’
The warning came as the Law Society and lender Santander continued to discuss concerns over Santander’s panel review, which resulted in hundreds of firms being removed for failing to meet the bank’s membership criteria.