The Law Society has confirmed solicitors’ overall duty to advise on climate legal risks in transactions and, as many predicted, conveyancers’ initial response has been frosty.
Conveyancers have been consistent in their stance, feeling as though they are being asked to advise on matters regarding which they have no experience or expertise. Indeed, a survey conducted late last year by Today’s Conveyancer in conjunction with the Conveyancing Information Executive found 85% of conveyancers did not feel they were under a duty to advise on climate change risk in transactions.
Stephen Tromans KC’s opinion on the matter in September of last year subsequently received a cold response, as did UK Finance Director of Mortgages Charles Roe following his suggestion that conveyancers are seen as lenders’ “in-house lawyers”.
Conveyancers’ reaction to the Law Society’s guidance has largely followed suit. While solicitors have been told they “should not advise on climate change physical risks where it is outside their knowledge or qualification”, the overall duty to advise on climate legal risk remains.
Despite this, the exact steps conveyancers should take when advising clients – whether inside or outside their expertise – remain uncertain.
It is also unknown whether conveyancers will be able to exclude climate issues from their retainer to some extent. What looks certain, however, is that many conveyancers will do so should this be an option*:
‘Enough is enough’
“This is another kick in the teeth for conveyancers on the back of the ongoing building safety catastrophe,” said Rob Hailstone, CEO, BLG. While he noted it’s still “early days” following the guidance, he said the reactions he has received are “somewhat negative, and on occasion hostile”:
He added firms must “take time to consider their position”: “Many will wait to see how lenders and professional indemnity insurers react.” However, according to Hailstone, one Derbyshire-based firm has already said:
“I have limited our retainer and included a paragraph in our Property Report identifying the potential risks and stating that we are not qualified to advise but there are third parties they could instruct if they want further advice.”
Hailstone added:
“I have been saying for some time now that the number of issues and amount of work that conveyancers must deal with and report on is becoming unsustainable. This is one of the main reasons that transactions times are getting longer.
Whilst conveyancers should not be being treated as beasts of burden, it does seem like they are at times. Common sense says that the more you load on to the back of such an animal, the slower it will become. Enough is enough!”
Conveyancers’ sentiment is clear to see across social media. One solicitor said on LinkedIn:
“Whilst we are at it, should all conveyancers just be guarantors for clients’ mortgages. [The guidance] is pretty sad to read.”
Another – perhaps tongue-in-cheek – said it is “good to see the Law Society continuing to champion the interests of the profession”. “I believe that the Law Society has been influenced primarily by public policy here, rather than any consideration for their members,” read another comment. One user asked: “What are we now – weather forecasters?”
Conveyancers’ frustrations have been echoed by their colleagues in the estate agency sector. Matthew Baldock, Director of Chelmsford-based agency Charles David Casson, said:
“Any agents thinking of moaning about having to deal with the upcoming ‘material information’ changes should be grateful they aren’t conveyancers who now have to become meteorologists and surveyors all in one by advising their clients on climate legal risks.”
Baldock suggested the move could further delay transactions and was worried it could lead to firms deciding not to act on certain properties – such as those near the coast – whatsoever.
“This seems to me to be one in a long line of issues that could be dealt with upfront as opposed to after a sale has been agreed.
If climate change is such a big issue, surely this should be a dealt with upfront – via a specialist survey, perhaps – rather than sales being agreed, and firms refusing to act, as we are currently seeing with the Building Safety Act.”
‘Only the beginning, but a very important start’
Opposition to the Law Society’s guidance is not, however, unanimous. Environmental law barrister Stephen Tromans KC of 39 Essex Chambers, whose opinion on the matter divided opinion last year, said:
“As well as the physical impacts [of climate change], there will be economic effects on property values, the ability to sell property and raise finance on it, and to insure it.
These must surely be risks which engage a solicitor’s general duty to protect his or her clients’ interests, to inform, to warn, and to help interpret available information, if necessary in conjunction with other specialists and experts.
It is therefore greatly to be welcomed that the Law Society has produced guidance on this issue. This is undoubtedly only the beginning of lawyers having to grapple with these issues, but it is a very important start.”
Search companies have also broadly welcomed the guidance. Groundsure – who published Tromans’ opinion – said it will be working closely with the Law Society to support the roll-out of the guidance. Their CEO, Dan Montagnani, said:
“Climate risks – be they physical, transition, or liability risks – are already affecting the value of land and buildings in England and Wales. The impact these risks have on values is only going to increase. Solicitors will need to ensure that they understand the duties and take practical steps to discharge them.”
Chris Loaring, Managing Director, Landmark Information (Legal), commented:
“We welcome the Law Society guidance and see it as an important milestone to bring greater clarity to homebuyers on potential climate change risks.
From our market research, 79% of home-movers were concerned about the effect of climate change on their property purchase. But as an industry, it has been unclear who should provide guidance. When we interviewed conveyancers, only 21% said it should lie on their shoulders (41% stated environmental specialists, 15% surveyors, 23% a combination), and 84% stated they were waiting for additional guidance from the Law Society, which is now here.
In reality, we all need to play our part and the published guidance is a positive starting point. However, it’s clear practical next steps that conveyancers need now in order to really forge change.”
Welcoming the guidance, James Sherwood-Rogers, Chair of the Council of Property Search Organisations (CoPSO) said:
“Perhaps the key sentence in the guidance is that solicitors ‘may have to look beyond the narrow scope of instruction by a client to consider whether and to what extent climate legal risks are relevant’. As the key distribution mechanism for climate change reports, CoPSO members have a key role to play in presenting solicitors with important information to discharge this responsibility.”
CoPSO said all members are required to be subscribers to the Search Code which is independently regulated by the Property Codes Compliance Board (PCCB).
Sherwood-Rogers added:
“The protection that the Search Code provides homebuyers and the lawyers acting for them, as well as mortgage lenders, is vitally important in providing reassurance for all parties when discharging the responsibilities that the guidance outlines.”
*Today’s Conveyancer social media poll. The 98 respondents’ role as a conveyancer was verified.
5 responses
Hopefully mortgage lenders won’t be pressured into asking conveyancers to pay the public’s good money for pointless ‘climate change’ searches. Because watch which search company brings out the first one out [emoji slow headshake]. Profit making agenda – of course not.
Yet again third parties such as search providers express delight at the increased burden placed on conveyancers. Presumably there will be an unconnected search offering from such providers which we will be encouraged to offer to clients based upon potential future risks ie fear, which will make money for search providers, do little for the client and place us and our PII at risk.
Whoopee Doo!!
“Search companies have also broadly welcomed the guidance. Groundsure – who published Tromans’ opinion – said it
will be working closely with the Law Society to support the roll-out of the guidance.”
As I understand it Tromans was originally instructed d by Groundsure for that opinion and so simply saying “published” does not really give the full picture.
Whilst I can empathise with some of the sentiment expressed by others in their replies here – we (Groundsure) are doing our bit in offering a full climate risk analysis in our core products at no additional fee. No extra search required. An adjusted perspective is to consider whether having flood risk information is useful? Answer: Yes / No. If Yes then is it useful to have a “today view” on flooding only or better to have a “complete view” that considers today and 30 years from now?
No extra search required and no additional cost. This is about doing things better in the face of a changing and increasing set of risks.
The Climate Change search reports have been available to solicitors for over a year now and so they are not new to table. I think as a property buyer, I would definitely be interested in having the information to make an informed decision. As far as I see, it should just sit alongside the usual reports when investing in property. The reports themselves are relatively cheap and the due diligence reporting should be passed on or buyers and referred to the data specialist providers.