A conveyancing transaction is a fluid thing with many moving parts. Everyone involved has a view as to where the problems lie but only rarely is an holistic view taken as to how the home moving experience can be improved.
The Home Buying & Selling Group (HB&SG) is the exception to the rule and that body is looking at various elements of a conveyancing transaction with a view to improving the process. Participants are drawn from across the board and, as a result, there is a certain freshness to the analysis being undertaken with the approach being more of “Can we do this?” rather than “Why we can’t do this?”
One of the perennial challenges faced in reforming the home moving process is the lack of structured communication among the various “players”. This article looks at how distributed ledger technology (DLT) might assist the dots to be better connected.
What is a distributed ledger?
The public perception of the term “blockchain” is that it is associated with cryptocurrency. That is not entirely accurate. Essentially, a blockchain serves as an open, distributed ledger that is a record of certain transactions between two parties in a secure and verifiable way. Once recorded, the data in each block cannot be altered retroactively without the alteration of all subsequent blocks without the agreement of others in the chain.
A key distinction for me between public blockchain and enterprise DLT is that the former broadcasts data to all nodes and hides the identity of those involved, whereas enterprise DLT verifies participants and only shares data between those actually involved in the transaction. This is an important distinction from a security point of view.
Given these inherent characteristics, it is surprising that there has not been more use of enterprise DLT by the homemoving industry where there is a requirement for secure online transactions where everyone can see the same information, at the same time, and thereby work together to achieve the same goals.
How can this help the home moving process?
The Land Registries in Estonia, Georgia and Sweden have adopted blockchain at the heart of their digital transformation programmes and it is, without doubt, something that can assist Land Registries as they are the only platforms on which land and property transactions ought to be processed. Any country with a mature system of land registration law and practice, as is the case in the UK, does not require an external third-party owned platform on which transactions can be processed for a fee. Fees are already payable to the Land Registries as part of the registration process and such fees then flow through into better service and future improvements. That is as it should be.
More can be done, however. If you get a group of conveyancers, estate agents, mortgage brokers and others in a room (as the HB&SG does to good effect), you will commonly hear about the poor communication that sometimes exists and the lack of a trusted framework through which information can flow. It is as if the various participants in the process are all talking in different languages when what is required is a form of the language “Esperanto “to enable them to better understand each other.
That may not be the best analogy given that Esperanto has never become a universal language, but it is close enough to help make the point that we need to adopt a trusted framework approach in order that information can flow better between conveyancers and estate agents for example with regard to how transactions are progressing with regard to chains etc.
Such information flow would be across the board. It is horizontal integration rather than vertical integration which is required. What is the need for information to be 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?
Obviously there will be a degree of vertical integration when the application for registration of title is made, but that is the final part of the jigsaw. However, the more immediate issue is that we better join the dots in order that the process works more efficiently. One solution might be to create a common standard that everyone can use to communicate to everyone else. It is suggested that this can be taken to another level, however, if all parties agree to a set of data standards. A fragmented approach where individual parties build their own API connection however would simply result in there being thousands of API connections and not move matters sufficiently forward. Put simply, a set of data standards will not fix the problem. Equally, the prospect of some central hub or platform owned by a commercial entity that holds everyone’s data gets talked about, but that just creates a data monopoly and that is also of no interest as a quantum step forward.
Fortunately, we already have, in Coadjute, a world leader in the use of DLT in the property industry who already work with HB&SG. Coadjute uses DLT behind the scenes to connect existing systems in a secure manner. As is stated on their website, they offer one view across the property transaction without the need for new CRMs or platforms, just additional functionality.
As I understand it, their approach has the advantage of not just limiting the connections people need to build and maintain, but it also allows multi-party data sharing (like a secure WhatsApp group) and for data to be passed from one party to another without losing the proven, verifiable source. Another way of describing what they do (their USP as it were) is that one connection to the Coadjute network connects the participant to everyone on the network, plus without any effort, every new person that joins the network. Surely that is what we and our clients as participants in the home moving process want? Less fuss and more secure co-operation is the key.
Article written Professor Stewart Brymer of the University of Dundee and the Scottish Conveyancers Forum.
2 Responses
I The “traffic light” system proposed by HMLR for electronic conveyancing in the first decade of this century was a distributed ledger.
2 As lawyers (and now quasi lawyers as well) have had an unfair statutory advantage in home moving since 1804, is it not time for a change to stimulate improvements?
It’s only going to work if all conveyancers ‘buy into’ it and work on the same platform. I came across a firm the other day, I almost fell off my chair when the secretary told me they had no case management system and were still using physical tapes instead of digital dictation!