Ahead of the Law Society Special General Meeting (SGM) on 23rd July 2023, the Property Lawyers Action Group (PLAG) has accused the Law Society of trying to introduce Home Information Packs (HIPs) ‘by the back door’ as well as suggesting that conveyancing is being ‘re-engineered to fit the law tech’ in a briefing note circulated to local law societies.
The SGM was confirmed by The Law Society last month after a poll by PLAG garnered the requisite 100 votes to submit the request, saying it would call for a vote of no confidence in Law Society CEO Ian Jeffery, and President Nick Emmerson.
The briefing note outlines the detail of its complaint regarding what it describes as the imposition of material and up front information and the civil and criminal liability on ‘solicitor, their staff and sellers’:
“Based upon our considerable experience as practising property lawyers, only somewhere in the region of 2% of buyers pull out of deals due to legal information supplied. So, it is illogical to penalise 98% of sellers and solicitors by extending their civil and criminal liability, as well as their costs, in an effort to reduce the 2% figure referred to above.”
It also rails against the lack of consultation with practitioners (‘Sadly, TLS has allowed itself to be pressured into accepting MI by the Home Buying and Selling Group‘) and suggests the idea of instructing conveyancers up front is ‘naive’ saying
“estate agents will often in practice send work to the solicitor paying the highest referral fees (some corporate agencies are geared up this way so that offers are only put forward if the buyer/seller has used one of their ‘recommended services’); and people do not want to pay/instruct their conveyancer before they find a buyer just like with HIPS.”
While material and up front information raises serious questions for the profession, the briefing note makes clear PLAG considers wider issues are more cause for concern; pointing the finger of blame for delays at HM Land Registry, unqualified and inexperienced conveyancers, leasehold issues, lenders, fees and ‘speed-crushing red tape emanating from the SRA.’
In response to concerns regarding any liability, the Law Society published a new practice note and ‘frequently asked questions‘ (FAQs) in June, providing guidance on the Consumer Protection from Unfair Trading Regulations 2008 (CPRs) and the implications for conveyancing firms. Although the CPRs will be superseded in due course by the Digital Markets, Competition and Consumers Act 2024, which received royal assent on 24th May 2024, the new legislation makes broadly similar provision. And the Law Society have argued that the legal position of conveyancers is unchanged, but acknowledges CPRs remain largely untested in a court of law.
The (2016) practice note made clear that infringements of the CPRs by solicitors are potentially offences punishable:
- on summary conviction by a fine not exceeding the statutory minimum,
- on conviction on indictment to a fine, or
- by imprisonment for a term not exceeding two years
There is unlikely to be an omission of “material information” (and a solicitor will not, therefore, be in breach of the CPRs) if a solicitor fails to disclose information which:
- is confidential, or
- falls within the caveat emptor principle
The legal position does not appear to the Law Society to have changed.
The expanded information sought by the amended transaction forms fits into the two categories that applied before the forms were amended, that is, concerning:
- potential physical defects
- defects as to legal title
The amendments do not extend civil liability for solicitors acting for either buyers or sellers for either category as a result of having to provide more material information under the CPRs.
Today’s Conveyancer has approached a number of Professional Indemnity Insurers for comment on the alleged risk of increased costs and premiums for firms in the event of inaccurate replies on the updated TA6.
Concluding, PLAG describes the consultation following the decision to delay the introduction of the updated TA6 property information form (5th edition) as ‘disingenuous,’ saying the group had lost ‘whatever remaining trust it previously held in TLS to adequately represent the interests of conveyancers‘; calling on The Law Society to separate the Property Information Form from the ‘malign influence’ of material information.
The Property Lawyer Action Group Briefing Note for Local Law Societies can be read in full here.
7 responses
The new Material Information Guidance issued by trading standards in full in November, is directed at estate agents and the home buying public, and whilst Trading Standards, some agents, and it would seem TLS would like solicitors/conveyancers to be instructed earlier on (in order to assist property sellers and buyers) their is no requirement for that to happen. Although many see that as an opportunity for solicitors/conveyancers to get higher up the food chain earlier on.
So the issue isn’t really MI (is it?) but the fact that the new TA6 has been altered without consultation. If that is the case then, as far as I am aware, a 6-month consultation will begin very soon and the members of the PLAG and others can have their say.
The group says it has lost ‘whatever remaining trust it previously held in TLS to adequately represent the interests of conveyancers‘.” In that case what does the group propose if TLS stepped back from conveyancing altogether? As someone who runs a large group myself, I fully understand how challenging it can be to keep all members happy when their are so many different business models etc. In my opinion, without an overseer like TLS, there would be all out war between the different types of conveyancing providers., and that, would not be a good thing for anyone, especially the home buying and selling public.
Now is surely the time to keep calm heads and not overreact and cause more harm than good?
It is illogical and perverse for TLS to claim no additional civil or criminal liability for the new property form as it significantly increases the information required to be supplied that so many rightly say is badly drafted, although TLS acknowledge liability under the old form.
The form further fails to give critical civil and criminal protection to solicitors by way of disclaimers that even Birmingham Trading Standards endorsed the use of under similar legislation that implies a complete lack of understanding by those involved in drafting this disastrous form that raises further wider questions on the effectiveness of TLS to represent members interests.
Common sense would indicate property solicitors should vote on any final revised form as unfortunately there is a distinct lack of trust that any consultation will lead to a fair or proper outcome.
Shame all this to appease vested financial interest groups, and those that have no appreciation of the tremendous increase in civil and criminal liability many will face, including sellers under the Digital Markets, Competition and Consumers Act 2024.
The vast majority of solicitors joined a profession to serve, as do doctors, yet unfortunately we have allowed our profession to be preyed upon by vested financial interest groups, and unqualified persons who primary object appears to maximise profits regardless of damage done to others.
The Law Society was wrong to impose NTSELAT Guidance on all CQS accredited solicitors. The implication was that CQS accreditation could be removed for those dissenting, despite the fact that CQS is now a pre-requisite for doing mortgage work, and such action would fatally undermine specialist property law firms.
An iron fist is not the way to bring about consensual change in home buying and selling. The best that can be said of the TA6 5th edition is that it was not fully thought through, and there was inadequate consultation.
The imposition of this new form is the thin edge of a very slippery slope. The Law Society may choose to ignore the criminal liabilities that this places firmly on the shoulders of the Conveyancer, but we on the front line certainly cannot. There was inadequate consultation and it is being ushered through as a result of the loud voices of HBSC, and the CA none of whom represent real front line conveyancers. With their vast resources due to the “sponsorship” such groups enjoy it is no wonder that we are in the state we are in. Over 100 solicitors voted for the motion of no confidence in the Law Society as a result of this and if that does not send a message to those in control, I do not know what will. PLAG members are not against tech, but we are against the dumbing down of conveyancing which is all these vested interests seem to be interested in.
Please can you explain why government has sunk its teeth into the Law Society so conveyancers are being used to police estate agents “through the back door”? (because NTS haven’t got the guts to prosecute conditional selling). The NTS guidance is just that, guidance, not mandatory which Law Society are now making it for conveyancers. Too much room for mistakes to be made and for conveyancers to be held accountable instead of estate agents. (The HBSC appears to be backed by behind the doors uppity civil servants with something to prove. Wonder how they will get on with Labour now that years of Tory corruption has now been booted out?)
We do need HIPS back again. We need to get to the stage where Conveyancers are instructed BEFORE the property is placed on the market for sale. We need to be given a chance to review the title early and to correct errors. I am seeing countless errors with Leases, Plans, Property Descriptions, Restrictions, Names etc…Trying to sort out those problems during the process is leading to countless delays and problems for us all especially when there are unqualified persons out there who do not know what they are doing.
For me, the problem comes down to the consumer. They can put the property on the market with an agent for no cost. Why then would they spend good money on a Conveyancer? The consumer sadly wants something for nothing. The public do not know and understand the problems that come with incorrect deeds and the issues it causes. As an industry we are exceptionally bad at communicating with consumers and advising them through the process. If the consumer does not understand, that means we have not communicated effectively enough. If we are unable to do that, someone needs to legislate it. If the consumer won’t pay, then perhaps they are not serious about selling. Do we then just work with those that are serious?
I am fed up of hearing complaints from consumers that the process is taking too long because of X problem because of Y problem. Well if they had their deeds checked, professionally, before marketing it would not take that long. I would go as far as saying 90% of enquiries would be resolved before the property goes to market. It would surely reduce the amount of ‘abortives’. That would surely please agents which the Law Society seems to want to bend over backwards for.
I would welcome legislation stating that a property cannot be marketed without HIPs. But to do that they need to overhaul regulation in respect of searches and Management Companies etc.
Not only that, if clients instruct Conveyancers before marketing, surely that will reduce the amount of referral fees paid?
The whole mess surrounding the Law Society, NTSELAT etc… was caused by a lack of consultation, a lack of organisation and a lack of respect to Conveyancers. That does not mean the idea itself is not a bad idea that can be worked on and expanded.
Of course some people commenting on here have their own selfish reasons i.e. a business all set up and ready to go as soon as MI gets the full go ahead, so we are not going to get any sensible comments from them, just criticism against the ill-informed who oppose this ridiculous idea. Call me Splinter!
Another thing where is James Munro? Has anyone soon or heard anything from him since he caused all this trouble with his mysterious illogical behaviour? Is he hiding under a rock somewhere or actually trying to do some real good for housebuyers by looking at how to ban referral fees and conditional selling?