Thursday, 6 March 2014

Concerns Raised by Law Society Over Lloyds Conveyancing Panel Conditions

Lloyds has upped the ante for its conveyancing  panel members and The Law Society of Scotland doesn’t like it.

What Decision First, the Lloyds Conveyancing Panel Manager, has done is made the simple act of acting for any mortgage lender in the Lloyds Banking Group an assumed acceptance of the lender’s Terms. Only nonacceptance required to be communicated along with return of any instructions. In other words, you’re in until and unless you actively opt out.
The Scottish Law Society is concerned that one of the conditions provides a right to Lloyds Banking Group to inspect all conveyancing documents and files relating to transactions carried out on behalf of any lender within the Lloyds group. The Society's concern is that this wording may set up a contractual obligation that might not otherwise apply. If a solicitor was to refuse access to all files where this term has been accepted there might be a difficulty in defending an action for access to the files either on a contractual basis or in terms of Section 1 of the Administration of Justice (Scotland) Act 1972 even though separate files had been established as to what belongs to the borrower client as opposed to the lender.

Another concern is that the Terms require the provision of information about the firm and its employees as may reasonably be required by Lloyds Banking Group . This could prove problematic in relation to credit checks and searches against current employees. I would certainly be interested to hear from employment lawyers as to whether there are any employment issues here. The ex-lawyer in me would force me to take a close look whether a firm’s employment contract allows for such checks to be made in order to be on lender panels or accreditation schemes.
The conditions also allow for Lloyds Banking Group to change the Terms from time to time subject to at least 14 days' notice.
The Professional Practice Committee of the Scottish Law Society have urged all solicitors on the Lloyds conveyancing panel of the need to consider carefully the implications of the terms of membership, particularly given the assumption of tacit or implied acceptance.
Perhaps Lloyds need to consider the benefit of these onerous conditions with the cost of a smaller number of solicitors on its panel.

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