Towards the end of last year, I penned an article – “Joining the dots in the home moving process” – in which I referred to a conveyancing transaction having many moving parts.
This article looks at what dots have been joined since that article and what the next steps might be towards a fully digital home moving process.
In so doing, I consider the lessons to be learned from the growth of the railroads in the nineteenth century to demonstrate that there is no benefit to be gained from laying multiple tracks going generally in the same direction. That did not work with the expansion of the railways and it will not work now.
A significant step
The recent announcement of the outcome of the Project Meridian project was a major step towards secure digital communication.
The prototype, which was the result of collaboration between the Bank of England, HM Land Registry and the Bank of International Settlements with input from a specialist UK company, proves that the way property payments are currently conducted can be greatly improved so as to benefit consumers and the wider property market.
Using Distributed Ledger Technology (“DLT”), the Meridian prototype allows two of the most important connecting points in a conveyancing transaction (namely the transfer of funds and title registration) to be more efficiently connected.
The essential simplicity of the new digital synchronised settlement prototype is that it is not proprietary to any one body. Instead it is an example of a commitment of the parties involved in the project to lay the necessary track over which traffic can flow in a safe and secure manner – for the benefit of all in the home moving process. The involvement of the Bank of England and HM Land Registry is hugely important as it demonstrates leadership and confidence in the way forward.
Digital identity
The Government – in particular, the Department for Science, Innovation and Technology – is to be commended for taking the lead on this important subject. The digital identity clauses in the Data Protection and Digital Information (No.2) Bill have now passed through Committee Stage in the House of Commons.
As part of the process, Government amendments to provide safeguards to data held by the tax authorities in Scotland and Wales were tabled and approved. The draft legislation has a couple more stages to pass through in the House of Commons (with the timings for these yet to be confirmed) and it then needs to go through the House of Lords before gaining Royal Assent.
This is a very significant step towards citizens having control of their digital identities and thus save on what has become a very time-consuming and varied process of proving you are who you say you are. Once the citizen has an approved digital ID, that will be portable and save time and money and avoid what is often the same exercise being carried out on multiple occasions.
Secure digital signatures
Linked to the broader subject of digital identity will hopefully be steps towards citizens having secure digital signatures which, it is suggested, must be digital signatures which meet the Qualified Electronic Signature (“QES”) requirements.
There is now a market for all levels of electronic signatures. Solicitors in Scotland have had secure digital signatures since 2015 as part of the Law Society’s Smartcard project. The Requirements of Writing (Scotland) Act 1995 was updated in 2012 so as to provide that a secure digital signature was the equivalent of a wet signature.
When the Smartcard project was started, it was ahead of its time. Electronic execution of documents was still an idea for the future and the new technology of advanced and qualified electronic signatures was, for most, as far away from everyday operations as the moon.
That is not the case now, however, principally due to COVID-19. Digital signatures are here to stay. The pandemic has only accelerated the process across the profession and not getting on board means getting left behind.
More needs to be done to spread the use of QES to people’s everyday business. The Law Society of England and Wales is also on a journey towards the use of QES in property transactions. The ultimate goal however is for citizens to have their own QES – possibly embedded in a “Home Card” or equivalent which is issued along with a registered title. Given the progress made in recent years, is this such a difficult thing to envisage?
So what next?
It is suggested that we need to adopt a trusted framework approach in the home moving process. It is horizontal integration rather than vertical integration which is required. There is no benefit to be gained from information being loaded vertically into a third party platform when the information ought really to be flowing in a secure manner among the various participants in the process. We must avoid a silo mentality if we are to facilitate effective change.
What is needed is a common standard that everyone can use to communicate. We should have a governing body which would set the policies and standards for onboarding and maintenance of the practitioner network in a digital conveyancing world. The governing body would set Model Operating Rules and a Participation Agreement for those involved in conveyancing and registration of title. We do not need to re-invent the wheel to create such a body as there are international examples which we could learn from – without wholesale adoption of a foreign scheme.
The recent announcement that HM Land Registry is to come under the ambit of The Department for Levelling Up, Housing and Communities (“DLUHC”) is significant. DLUHC supports communities across the UK to thrive with the goal of making them great places to live and work.
What better place to start than by improving the home moving process and build on the work of the Home Buying & Selling Group. It is suggested that DLUHC be encouraged to use their powers to regulate and promote the use of open networks in the property market.
An open network that shows the way is Coadjute, a world leader in the use of DLT in the property industry and the technology firm behind Project Meridian. Coadjute have a live network rolling out in the UK that uses DLT behind the scenes to connect existing systems in a secure manner and thus offers one view across a property transaction without the need for new CRMs or platforms, just additional, secure functionality. One connection to such an open network connects the participant to everyone on the network, plus without any effort, every new person who joins the network.
Government is ideally placed to provide the necessary stimulus to ensure that adoption of networks such as Coadjute are accelerated, and, in so doing, help make the UK be one of the best places in which to transact in a secure digital manner. The UK can be a leader in the field.
Looked at another way, if we were starting today with a blank piece of paper would we design the home moving process the way it has developed over the years? The answer must surely be no.
Equally, while the encouragement of innovation across the home moving process is essential, we have to have an over-arching plan or else we risk development being fragmented and able to be thwarted by inertia and, unfortunately, vested interests.
It is much better to get everyone “inside the tent” as HB&SG has done and then build out from there in as direct a line as possible. It is time for Government to back the HB&SG initiatives with legislative intervention as required.
Perhaps the Law Societies of England & Wales and Scotland might also lead the way by identifying the essential points along the digital highway? It is accepted that it is too radical to suggest that we completely change the processes which are in place. Instead, we should identify what works and what doesn’t and use that information to formulate the direction of travel and thus avoid following a “long and winding road”.
Article written Professor Stewart Brymer of the University of Dundee and the Scottish Conveyancers Forum. He is a participant in the Home Buying & Selling Group – https://homebuyingandsellinggroup.co.uk/
The views expressed in this article are the personal views of the author.
