Friday, 15 April 2011

The emergence of "dumbed-down" lawyers in a post ABS world

David Bott,the new president of the Association of Personal Injury Lawyers (APIL) yesterday warned of the emergence of a new breed of 'dumbed-down, legal-lite' lawyer following the introduction of alternative business structures.

Addressing the Associations annual conference, David Bott predicted that 'potentially massive' new entrants to the personal injury market will be 'very efficient', but 'process-driven'.

‘My view is that the new breed is likely to be dumbed down,' said Bott.

Now………..I will leave to your imagination to work out why the CLC or Law Society have not made similar comments about conveyancing. Answers on a postcard please.

Wednesday, 13 April 2011

Professional services showing signs of financial distress

Corporate recovery experts Begbies Traynor have released their Red Flag Alert, which monitors a series of indicators of company cash difficulties. Professional services is area hard hit, seeing a 61% hike in firms in trouble.

Begbies Traynor Group boss Ric Traynor is quoted by the BBC as saying :
"Over 15,000 firms in the professional services sector are showing signs of significant or critical problems - partly driven by a stale property and corporate deals market - often the drivers for an active professional services community,"

Traynor said that it appeared firms which operated with a high fixed cost base were finding the current market conditions increasingly difficult "as their revenues fail to recover and the scope for further cost reductions becomes more limited".

Tuesday, 12 April 2011

How refreshing…………..someone using the window.

I spoke to a head of a conveyancing team today who advised me that she was looking to take advantage of the slowdown in numbers of transactions by looking at how to improve processes and in particular improving their risk management.

It's a little like the break we had after the Cold War ended. The peace dividend was there, just waiting for us to repurpose our military, our military budget and our military research. We didn't. We wasted the window, wasted the money and didn't rush to fill it with the sort of top-down industrial projects (like finding a cure for deadly diseases or creating new forms of energy).

So, what are you going to do with the extra time ? Surf the web?

Monday, 11 April 2011

Nat West change P2s relating to Shared Ownership

National Westminster Home Loans have just changed their version of Part 2 of the CML handbook relating to Shared Ownership.

Section 5.18.1 now reads “We do not lend on shared ownership properties. For shared equity and affordable housing you need to notify us (as detailed above in 1.11a) giving details of the proposal.

What do conveyancers do if they have exchanged on such a property and are about to send through their COT ? For what it’s worth, I think a disclosure has to made to the Lender.

Conveyancers should make sure their Terms and Conditions cover this situation. Conveyancers should also consider, in light of the increasing number of P2 changes, to make sure the Contract for Sale is conditional upon lenders not withdrawing their mortgage offer as a result of a P2 change.

NHBC - Additional tasks for a purchaser’s conveyancer after completion of a new build property

• The conveyancer should complete the Acceptance form in the Buildmark Acceptance and Offer pack. In order for NHBC to process this care should be taken to include all of the information requested on the form.
• Return the Acceptance form to NHBC - It is vitally important to return the Acceptance form to NHBC in order for the insurance certificate to be issued.
Once the cover note has been issued and the Acceptance form received NHBC will issue the insurance certificate which confirms that the ten year Buildmark cover is in place.
• Forward the NHBC documents to your client
• When you receive the insurance certificates distribute copies to your client (the original), lender (check CML Handbook to see if applicable) and keep the final copy for your files.

Sunday, 10 April 2011

5 reasons why lenders will move quickly against negligent conveyancers

If a lender has suffered losses resulting from of a breach of contract, negligence, fraud by a conveyancing solicitor it can bring a claim against the defendant firm. Lenders will need to act quickly for the following reasons:
1) The solicitors or Licensed conveyancer may be a limited company or LLPs who can enter into administration
2) The said firm may start up as a new phoenix company without any liabilities of the old business.
3) The claim may be out of time – the general rule is that the lender may have six years from when the cause of action accrues to bring a claim. In certain circumstances this can be extended by three years for negligence claims.
4) If a lender has a claim against a conveyancer it should notify the firm immediately. Due to changes to the ARP,if a claim is not notified to the professional’s insurers and the professional ceases trading a claim may not be covered by their insurers.
5) Insurance cover and assets can be eaten up by claims already made, so there is less money available in the pot to pay out claims.

Will leasehold conveyancing be impacted by the Peverel collapse ?

The holding companies behind Britain's biggest property manager – which maintains 190,000 homes, including most McCarthy & Stone retirement properties could impact conveyancing for the following reasons:

1) If redundancies are to be made, obtaining management information could become very difficult. In recent years it can take weeks to obtain crucial management information from Peverel. The time frames involved could be dramatically affected
2) Peverel are specifically named in some leases as a management company. If they go into administration the lease will have to be carefully looked at to see if the landlord is under an obligation to take over the management company’s responsibilities.
3) Many leasehold titles contain restrictions which can only be lifted or complied with where Peverel grant an appropriate letter of consent. It is exceptionally difficult (although no impossible) to register new purchaser of a property or a mew mortgage if the appropriate form of consent is not obtained. With lenders increasingly looking at turn around times for registration of title conveyancers need to be certain that the certificate of compliance will dealt with expeditiously.

The problem of evidence-based marketing to conveyancers

I have come to the conclusion that lawyers do not like evidence based marketing. It may work for scientists but not for lawyers. That's how science works. Thesis, test, evidence, conclusion. All testable and rational.

Here's the conversation that needs to happen before one invests a lot of time in evidence-based marketing in the face of sceptical lawyers: "What evidence would you need to see in order to change your mind?"

Of course, evidence isn't the only marketing tactic that is effective to conveyancers. In fact, it's often not the best tactic. What would change his mind, what would change the mind of many people resistant to evidence is a series of eager testimonials from other lawyers who have changed their minds. The best example of this is Chancel search and Chancel Insurance. When a critical mass of lawyers clearly and loudly proclaim that they've changed their minds, a ripple effect starts. First, peer pressure tries to repress these flip-flopping outliers. But if they persist in their new mindset, over time others may come along. Soon, the majority flips. In the legal world it's slow, but it happens. It’s why solicitors will eventually embrace change whether it is by joining the likes of QS or adopt new risk management tools .

Thursday, 7 April 2011

TUPE regulation impact on commercial leases ?

Commercial property conveyancers beware !

It may be possible for TUPE to apply to a lease termination situation. For example, a tenant single occupier of a building employs a caretaker to manage the building. If the tenant's lease is forfeited or terminated, does TUPE apply to the caretaker? If so, should an indemnity be given to the landlord in respect of any TUPE obligations he may have in relation to the caretaker?

A few conveyancing questions for you :

* Arm’s length Transactions. When is it permissible to act for both parties? Do you understand the rules?
* Are you familiar with the types of instruction that may be acceptable from a lender, in compliance with R.3?
* Guidance on Conflicts and Confidentiality
* Identification issues: what is acceptable to the Lender? How are the requirements different for Licensed Conveyancers?
* What warranties are you giving to the lender in the Certificate of Title?
* Valuation issues
* What searches must be carried out and when might you exercise professional judgement?
* Building Regulations and Planning Control: essential advice for the purchaser and lender’s requirements
* Powers of Attorney: do you know what is acceptable to the lender?
* Leasehold management companies: must they be a party to the lease? What is acceptable to the Lender?
* Insolvency considerations: best practice
* Professional Consultant’s Certificates: what is acceptable?
* Road and Sewer agreements: Lender’s requirements
* Transfers of Equity
* Registration formalities. How do the BSA instructions differ from the CML part 1?
* When a lender changes their P2 or Specific Requirements

If you immediately know the answers to the above questions you probably don't need to use LENDERmonitor.

Get a Grip

Every lawyer in the UK would recognise that one of the stark new realities facing Partners within law firms across the UK is a dramatic increase in the risk of significant liabilities that can affect their firms.

High profile cases against lawyers in connection with Money Laundering and other forms of fraud are a clear reminder of the potential vulnerability of law firms to the actions or mistakes of individual partners and their support staff. Yesterday’s article in the FT Adviser Fraudsters 'played musical chairs' with lawyers highlights such a case.

Don’t be fooled into thinking that the risks facing law firms are limited the problem of criminal activity.

The commoditisation of certain areas of law, especially in the field of conveyancing, has resulted in the slow but gradual extinction of qualified lawyers from residential conveyancing. The net result is poor quality work the knock on effect that negligence claims will inevitably start to emerge.

Traditionally, law firms relied on a common culture and shared sense of quality standards among their partners to address these issues. And, in a time when
firms were relatively small and when partners were "home grown," learning their craft from senior Lawyer who mentored them, the system worked well enough.
Today, the situation is far different.

To become ‘risk averse’ a Law firms now need to focus on technology to supplement the lack of technical knowledge as well as enable them to have to auditing functionality to see who within their firm is “pushing the envelope” .

Tuesday, 5 April 2011

Cutting out the bad apples

On the 20th October 2010 Michael Coogan Director of the CML advised at the Property in Practice Conference “…. we do not yet know if CQS will meet our expectations for monitoring, supervision and auditing or that it will have an annual budget to ensure it is robust. And robust is not just record-keeping firm details – vetting – but also cutting out the bad apples – selective surgery.”

Yesterday Mr Coogan was quoted as stating “….Any conveyancing firm which wants to continue to act on behalf of lenders should expect the CQS to become an important new criterion for panel management, and expect to be asked by their clients whether their firm has been accredited.”

So here is my question: What has happened between October and today? As far as I am aware the Law Society have not as yet turned down any application. Has there been any selective surgery?