Separate Representation in Conveyancing: But Only for the Many
- AuthorPaul Hajek
When you buy a property with mortgage finance, it has been the custom for the Lender to appoint the same conveyancing solicitor to act for it in the completion of the mortgage.
HSBC: The World's "Non" Local Bank:
This will now change for mortgage customers of HSBC Bank.
HSBC the world's "local bank" as the advert boasts has decided to cut out any semblance of local when it comes to choosing a Conveyancing Solicitor.
You, the consumer will be pushed (let's make no bones about it) into using one of 40 law firms in England and Wales on a new HSBC approved panel to carry out the Conveyancing on your home move.
Of course, you will be able (at additional cost and time delay) to use the Conveyancing Solicitor of your choice, the difference now is that big brother HSBC's lawyers will be in charge of deciding how quickly you move. If you want to move in a week after exchanging contracts (most people do) for example - you can forget about it! - you must wait a minimum of 11 working days.
And with such a limited panel, the Bank's solicitors are unlikely to be local enough for your conveniencel.
How has it come to this?
The Banks have taken a hammering; their own excesses in poor lending (and we don't mean HSBC in particular) and continuing property fraud has lead all Banks, with a big nudge from the Financial Regulator, to examine their risk profiles.
The Solicitors Regulation Authority also sparked a revolt amongst Lenders by suggesting they may need to have their own insurance. HSBC may have got their retaliation in first by creating such a limited panel.
It is not a surprise perhaps that in order to protect their own backs, The Banks have gone on the defensive.
Sledgehammer to crack a nut:
But as with most big business they do not have the subtleties to examine and listen to people who know what they are talking about. They just resort to the sledgehammer and get on with it.
Bit like the Labour Government with HIPs - they never listened.
The loser of course will be consumers who will encounter greater cost and greater delays in future.
Conveyancing Quality Scheme (CQS):
Introduced last April there are now over 1000 solicitor law firms who attained the Conveyancing kite mark.
All firms on the panel are members of the Scheme but many conveyancing firms who have been accredited with the conveyancing kite mark like Clutton Cox have been excluded from the panel.
What about other Lenders?
HSBC has only 5% of the mortgage market, but it would not surprise if others followed suit.
LloydsTSB are content at the moment for open panels and would like to have at least one firm geographically in line with their branch network - keep it local in other words.
The Nationwide and Santander have begun to purge their panels of law firms who only carry out conveyancing on an occasional basis. Good for them, I have no problem with creating a more relevant panel.
The Future of Separate Representation:
Separate Representation is not a new phenomenon, as a small firm we sometimes are not on a Lenders panel and have to work with another firm. Normally, it works smoothly, but we are not able to force speed and must join in the bureaucracy of it all.
Separate representation may never become the norm, but with such a move by HSBC it is now a possibility.
The financial world has changed for ever post 2008 and Conveyancing Solicitors are the latest to be caught in the cross fire.
The pity is that with lessons learned the Conveyancing process as carried out by 1000's of Conveyancing Solicitors has high public satisfaction.
Satisfaction levels are so much higher with Solicitors than Banks, which are at an all time low.
We seem to be in a relentless push into Big Law; just as High Street shops have been ousted by the Supermarkets, so small conveyancing firms may be choked off by large warehouse conveyancing.
It's only a convenience when it's not there any more.
Consumer Choice: The Clutton Cox Pledge
We shall certainly advise clients to use other Lenders where possible to avoid the risk of a sale or purchase failing through because of institutionalised delay by HSBC.
And where our clients use HSBC as their only option we will ensure our clients do not suffer financially.
And we will offer one "blow out of the water" guarantee: you our client will only pay us what you think we are worth if you are not satisfied with our service to you.
Now, that is something you will find HSBC won't be able to match!