Future climate risk reports are becoming increasingly standard in homebuying reports, according to practitioners working at the forefront of the field.
In a plenary session at the Law Society Property Conference on Wednesday, Keith Davidson, partner at Irwin Mitchell, Sarah Sargent, partner and head of residential property at Flint Bishop, and panel chair Warren Gordon, senior knowledge counsel at CMS, discussed the impact of climate in the context of the practice note issued earlier this year.
The panel were clear that introducing the discussion on climate-based issues is not intended to impose a new burden on solicitors. The speakers also stressed conveyancers are not responsible for advising on physical risk and should make this clear to clients, with a disclaimer advising as such when reporting the results and suggesting the client consults the search provider or a relevant specialist for further guidance.
In response to feedback from solicitors since the note was published, the Law Society have agreed to remove the requirement to seek client approval before ordering climate risk reports.
However, the panel advised if environmental searches are obtained, there is a duty of care for property lawyers to highlight the findings to clients.
Davidson referred to solicitors’ duty to warn and disclose information: ‘Think of it like seeing a dentist’, he suggested. ‘If you visit for a filling and the dentist also sees a broken tooth, they won’t just do the filling and say nothing about the tooth’.
Although a show of hands indicated just a handful of audience members were asked about climate risk by clients, the panel said reports are increasingly required by lenders.
Future climate risk data is already being requested by banks for commercial transactions, they explained, with lenders increasingly expecting to see environmental risk in residential reports. Barclays, NatWest and Santander all asked search provider Groundsure to include a climate risk index in reports as standard, with more expected to follow suit.
And, at the end of September, David Bailey, the executive director of the Prudential Regulation Authority wrote to the chief financial officers of the largest banks, saying ‘we encourage firms to continue to enhance this identification of climate risk drivers’.
When asked by an audience member how the property market will continue to function if most reports are highlighting some level of climate risk, the panel advised that solicitors should just direct clients to specialists for further help.
‘You have to take the practice note seriously or you could be in trouble’, stressed Sargent, suggesting conveyancers should engage with search providers and experts in to ensure good practice.
7 responses
I am very sorry but the Law Society has got this completely wrong.
I am a former member of the Environmental Law Foundation and cannot understand why the Law Society is persisting with this. I have also been part of a team which was engaged in a large environmental claim against a chemical company.
Climate change must be excluded from a retainer from day one. There is no middle way.
Equally environmental reports are also professionally risky. Their severe limitations must also be highlighted from day one.
The fundamental issue is a jurisprudential one. The judiciary is inclined to favour the public when it comes to professional negligence claims.
Stephen,
If the lawyer is not the correct person to be handling this type of risk, who is and when should it be carried out?
I don’t have a firm stand point but my opinion is that it needs to be carried out upfront and therefore it probably falls with the estate agent.
I believe the lender has a duty of care and the guidance strongly recommends climate change risk should fall within their due diligence. However, I personally think it’s too late by the time an offer has been accepted.
If this type of risk potentially affects the physical aspects of the property, then surely it’s a surveyor/valuer thing, not a lawyer thing?
Hi Alison,
Yes the surveyor probably should be the one to deliver this, but it needs to be available from day one and how many surveyors are instructed at this stage today? Probably low single figures. That’s why the government’s proposed changes to include home condition surveys, as upfront information, make perfect sense.
Before everyone starts to chip in, if all sellers have to do it, there will be no issue around who’s going to pay, or it will put people off marketing their property…blah blah blah…!
We just need to get this moving and change the process to fit the digital 21st century that we live in. Consumers do not want to be left in the dark, they want transparency. They don’t want to go blind into the biggest purchase of their lives, they want to make educated decisions, based on as much relevant information as possible.
Conveyancers are not surveyors. Conveyancers are trained in dealing with legal titles and legal issues. Our job has consistently been blurred over the years. People expect us to deal with boiler reports, electrical reports, issues for your legal advisors in surveys, be policemen and check SOF SOW PEP’s Sanctions, EPC’s, be rental agents when buying properties subject to tenancies etc. etc. etc. I am not a surveyor, I have no willingness to become a surveyor. I question at times as to why we are looking at environmental searches full stop. Frankly, there are firms out there that give the clients options as to whether environmental searches are asked for. People need to realise and realise quickly the more that is put on Conveyancers the slower matters will get, the more we will charge and the more liability we will try and escape from in retainers. Putting all of this on Conveyancers is not good for clients and is not good for Conveyancing chains. If we stuck to our job solely, then matters would take half as long to go through.
Christian Woodhouse, consider this: if buyers don’t want to pay for surveys, what makes you think sellers want to?
Why are Councils allowing developers to build on known flood-plains? (Pointless putting up badly built properties that are going to be flushed away in probably less than 60 years?) Then consider this – the conveyancer will get the blame because the client does not want to listen to reason and still go ahead and buy such property (because it has a sparkly new bathroom and kitchen). Surveyors do not want to be liable to third parties for their reports. Just like with boiler certificates that may have been done in 2025, you still can’t rely on someone who is appointed by the Seller to be honest – it could be their mate Dave down the pub who has produced this certificate.
Finally, I have been told by a senior surveyor that the data sets by Groundsure are causing him real headaches on mortgages because they are not accurate. His own purchase has brought up that property is in a known flood risk area, so of course I have provided him with the usual advice but have been batted away with this information by someone ‘in the know’.
Buyers carry out surveys where they want to know what’s wrong if anything, with the property. If you don’t isn’t that your problem? Just like buying a car, if you’re not an expert but don’t get someone with expertise to look at it for you, you might end up with a dud.
Finally, you and your tech buddies still continue to avoid the question of liability. Who is going to be liable if this data is ‘hacked’ or suddenly becomes ‘unreliable’. It can happen. Just as with mobile phones being stolen, data can be stolen too. What are the tech guys putting in place to protect the public? What professional indemnity insurance do they have if there is a problem? I will not allow Conveyancers to continue to be scape goats.
Estate agents also don’t appear to know much about the law and are basically telling people what they want to hear to get a deal ‘secured’.
It’s not just a case of getting a transaction through ‘quickly’ – even Amazon Prime has stopped delivering next day.
I see Today’s Conveyancer are also censoring previous comments . . .