Stronger regulation of the high-volume, low-value conveyancing sector will be required to ensure the success of reforms aimed at improving the speed and efficiency of the conveyancing process, the Chartered Institute of Legal Executives (CILEX) says.
A review into the current fee structure for conveyancing work is also needed to ensure that quality of advice is not sacrificed in the move to a more streamlined service, the organisation added.
CILEX highlights the “inefficiencies and process bottlenecks” caused by high-volume, low-fee operating models that place conveyancing lawyers under substantial pressure, as well as the “frustration and disjointed communication” that can occur between different representatives in complex chains. It recommends “collaborative regulatory action” carried out by the Legal Services Board with support from frontline regulators to “ensure that service quality and protection is not compromised”.
A review of conveyancing fees should be undertaken to support the reforms, with changes that enable firms not to over-commit to extremely high caseloads and so ensure the consumer is receiving the client care they deserve. This, alongside other measures, would mitigate against the “unprecedented strain, relentless workloads and tight profit margins” faced by many conveyancing lawyers, CILEX said, with the value of better client care and efficiency outweighing any increase in costs.
The recommendations have been put forward in CILEX’s response to the Ministry of Housing, Communities and Local Government consultations on home buying and selling reform and the provision of material information in property listings, which closed on 29 December.
CILEX supports the mandatory provision of upfront information when marketing a property, stressing the importance of consumer education on the consequences of providing inaccurate details. It also agrees with the introduction of digital logbooks, arguing that this must be backed by legislation. It considers that binding conditional contracts would be beneficial but says more work is required to establish the practicalities of this approach outside chain-free transactions.
Responsibility for anti-money laundering should be discharged to those who first engage with the consumer – generally a mortgage broker or lender, CILEX believes, to remove this “heavily burdensome administrative task” from conveyancers. “Given the recently announced plans for the Financial Conduct Authority to take over the supervision of AML compliance from legal regulators, this would avoid conveyancers being subject to dual regulation and the need for consumers to verify source of funds more than once in a transaction,” the organisation said.
Alongside government implementation of Regulation of Property Agents (ROPA) measures, CILEX is also calling for an urgent review of referral fees amid concerns that many estate agents are not adhering to transparency requirements, to the detriment of consumers. CILEX supports the introduction of a code of practice for estate agents, along with mandatory training or certification in relation to the provision of material information.
“We need a faster and more reliable conveyancing process that keeps pace with technological advances, holds all professionals involved to high standards and engenders the trust and confidence of consumers, ” said CILEX president Sara Fowler.
“It is imperative that in pursuit of speedier transactions there is no compromise on quality of service and that consumers get the expert advice they need. The government’s proposals offer much needed change to the sector but if the reforms are to be a long-term success, we need to see strong regulation and education, a review of current fee structures and transparency on referral fees to ensure that consumer protection is at the heart of these reforms.”
2 responses
A disappointing response from Cilex.
Please feel assured it is not the high volume conveyancing firms that create bottle necks in chains and cause delays. I would like to see their data on this element of their response. My experience, is the opposite!
I came across a quote from a high volume conveyancing firm the other day for a transfer of equity/remortgage. Initial quote was half our fees BUT it included a list of 73 additional extras that clients will clearly not understand and the clients will only look at the headline figure. For me, firms like that should not be allowed to trade with those kind of terms of business.
There are Solicitor firms guilty of that as well. I know of a particular Consultant Led Solicitor Firm that has some very questionable additional fees that the regulators seem to turn a blind eye to. How is it that firms are allowed to charge a fee to supply a completed registration to a client? How is it that a firm is allowed to charge a fee (not just disbursement) to do an OS1 and bankruptcy? How is it that a firm is allowed to make profit costs from searches rather than just charging as a disbursement? It is the factory firms doing this with no regulator seeking to protect clients against unfair charging practices.
I tell you what, if factory Conveyancing Firms were completely honest about the charges at the start and all the additional fees that would apply, they would not get any work. Yes their initial quote might be cheaper than non-factory firms but I would happily place a bet that the work non factory lose out on to factory conveyancing firms, the final bill ends up being a good 50% less on the non-factory side.
Let us not pretend that we are holier than thou if we are not a factory conveyancing firm. We are not holier than thou. But if the ultimate goal is to protect clients interests at all costs, how is it that factory conveyancing firms are allowed to get away with some of the stuff they are and then pay agents £300 £400 £500 + VAT in referral fees per matter?