The conveyancers’ regulator has suggested it may be time to re-examine the thorny issue of firms acting for both sides in a transaction.
Dame Janet Paraskeva (pictured), chair of the Council for Licensed Conveyancers, said current freedom to represent both sides was being ‘abused’ by some practitioners.
The CLC currently requires ‘informed consent’ from both parties and effective Chinese walls between the teams within a firm acting for buyer and seller.
In her first speech as chair, having been appointed in April, Paraskeva said the regulator will consider whether to make any changes to existing rules, having seen instances where practices have continued to act even where there is a substantive conflict of interest.
‘These [failures to meet requirements] are in relation, unsurprisingly, to sellers who are vulnerable for whatever reason, though that reason is generally financial,’ she said.
‘The seller finds themselves in dire straits and may feel pressured to do something that is not in their best interest.’
Paraskeva, a former chief executive of the Law Society, also said the issue of separate representation for borrowers and lenders needs to be addressed.
She explained the question has recently been raised by a major insurer, and that the current regulation allowing dual representation ‘probably reflects the fact that in the majority of cases the borrower’s and the lender’s interests will coincide’.
Paraskeva said there are ‘legitimate grounds for concern’ about potential conflicts of interest between borrower and lender, with the CLC needing to consider what can be done to ensure the ‘appropriate separation of representation’.
On the subject of lender panels, Paraskeva said the CLC understands that banks want to get insight into activity in the marketplace.
But she questioned whether lender panels represent an additional ‘quasi regulatory burden’ on conveyancers in dealing with a range of panel management schemes and fees. The CLC chair said this issue needs ‘examination’.