Conveyancers call for wider industry support in the wake of PM Law closure

The personal stories of the impact the PM Law closure has had on home movers has been widely publicised in the national press with families in limbo, and many left paying two mortgages as redemption funds were caught up in the fallout from the stricken firm. 

A Facebook group set up by those affected now has over 1300 members with daily stories of uncertainty over transactions, mortgage offers being updated and withdrawn, and compensation claims for additional fees incurred.

Today’s Conveyancer has also been told piecing together the components of transactions is proving tricky, with uncertainty over who has what information, what has and hasn’t been submitted to HM Land Registry for example, etc. In response HM Land Registry told this publication it is  “currently reviewing applications submitted by PM Law and its affiliates, and considering how it can support customers affected by the firm’s sudden closure.”

One such example highlighted to this publication is from Switalskis Solicitors, in Wakefield, who has taken on clients caught up in the failure of PM Law through the quick action of setting up a helpline for those whose conveyancing transactions had stalled.

They told us from their own experiences, and from what has been written in the Facebook group, it would appear many ex-clients are now near breaking point.

One such example is that of previous PM Law clients whose sale of their late parent’s property, which had gone through probate, was lined up with sale proceeds split between the two children; one of whom had an onward purchase. Contracts had already been exchanged, completion was set for 2nd February and the completion monies had been transferred to PM Law on the morning they closed. The firms on both the sale and the onward purchase were insisting on payment of contractual interest as a result of the failure to complete, even though the “failure” was due to the collapse of PM Law, rather than the actions of the clients themselves.

Switalskis had applied to the Solicitor’s Regulation Authority Statutory Fund (which to their credit was dealt with reasonably speedily) for release of the completion monies but the delays still resulted in the clients facing an additional liability of £2,600 in contractual interest.

It took an “emotionally-worded” email from Alistair McKinlay, Director at Switalskis suggesting it was inappropriate to “weaponise” the situation against his clients, for common sense to prevail and the demand for interest to be dropped, but it highlights the continuing issues clients are facing in many transactions.

As with this case, the conveyancing profession has rallied round those affected and in many cases worked minor miracles to enable transactions to happen. The response brings back memories of SDLT and covid deadlines as the profession worked long hours, and late into the evenings to ensure home moves could go ahead. But there is only so much conveyancers can do and many are now calling on other stakeholders and institutions around the home moving process to help them out.

The plea comes following efforts by membership bodies to engage with the institutions around conveyancing to take a lead in supporting conveyancers.

The SRA has been heavily criticised for its failure to be transparent about the circumstances surrounding its intervention. At the point at which PM Law closed, a statement from the regulator said

“We have had a number of calls on Monday 2 February that suggest Butterworths have not closed in the manner we’d expect. We will be contacting the partners of Butterworths to find out what’s going on and to remind them of their professional obligations. If they are closing, we would expect those affected should be contacted soon.”

It was some days later the SRA confirmed it had intervened. It has now confirmed it is looking into the potential scenario a sizeable fraud was the reason for PM Law’s failure. Details of what steps affected clients might take has also been published on the SRA website.

An open letter, published last week by Bold Legal Group CEO Rob Hailstone has called for further support from the sector on issues including

• Land Transaction Returns potentially not submitted or if they have been submitted, SDLT not paid
• Mortgages not redeemed on sale or Transfer of Equity
• On purchases or Transfers of Equity, Transfers to evidence change of ownership and new Mortgages not registered
• Unexchanged deposits not returned
• Mortgage monies released for completion where completion has not taken place, but clients are expected to pay mortgage payments on a property they do not yet own
• Contracts not exchanged and completions still not effected

The letter goes on to say:

“These are not theoretical problems, they are causing financial and legal harm right now, and thereby also harm to our industry’s/profession’s reputation. Whilst clients have submitted claims to the SRA compensation fund, it seems some are not being processed quickly enough, presumably due to the sheer volume of affected clients and claims being made.”

Hailstone concludes:

“A number of stakeholders have offered help and support (via dedicated helplines etc), however I would like more to do the same, it is not inconceivable this issue will soon end up being dissected on national television and radio. We need to have our ducks in a row if and when Martin Lewis comes knocking to ask how we as an industry have responded and most importantly, protected consumers interests.”

For those wishing to respond please either leave a message in the comments or contact Today’s Conveyancer on press@todaysconveyancer.co.uk.