The following statement was issued yesterday by the Law Society of Scotland to Scottish Solicitors with an interest in conveyancing.
Dear colleague
I am writing to you about a serious and developing issue which is important for all firms carrying out residential property work. I have written separately to all cash room partners, asking them to pass this information to those members within their firms which work in conveyancing.
Last autumn, we were advised by the Council of Mortgage Lenders (CML) about a new conveyancing panel management solution facilitated by a company called Decision First. Decision First will provide a "gateway" between solicitors and banks involved in the scheme for the purpose of panel management. The objective is to help lenders streamline the panel management application process for the benefit of both solicitors and lenders.
Decision First has now developed a single interface called 'Lender Exchange'. This system will allow panel firms to keep lenders up to date with any changes to their practice. The scheme means that conveyancing panel members only need to provide their details and supporting documentation once to those lenders involved in the scheme. Lenders will then use information from this database to make their own decisions about membership of their conveyancing panels.
We know that Decision First will charge panel firms a single annual fee for use of the Lender Exchange system.
We are deeply concerned about such a charge which we believe presents an unnecessary cost to process information. The Society already holds this kind of information about solicitors and we have openly expressed our willingness to provide this information free of charge to lenders. This would save our members from having to process this material again and prevent them from having to pay the fee to Decision First.
Lloyds Banking Group wrote to the senior partners of all firms on its conveyancing panel at the end of November 2013. They advised that all firms on their conveyancing panel would have to provide the required information via the Lender Exchange interface by the end of quarter 1 2014 if they were to remain on the panel. Santander has also written in similar terms to firms on its conveyancing panel.
I would like to make it clear that we continue to have deep concerns about this new system of panel management.
We worked with our colleagues at the Law Society of Northern Ireland and wrote a joint letter last December to all UK lenders in which we stated our serious concerns about the proposed new conveyancing panel management solution and requested that lenders who plan to implement this solution delay doing so until they can be appraised of our concerns.
We also carried out an online survey of our members in November 2013. The main issues of concern raised were the clear increased administrative burden, increased costs and no guarantee that by participating in the scheme solicitors will get onto lenders panels.
We have recently received a copy of the draft Terms and Conditions from Decision First which members would have to agree to and comply with. These were provided to us for our review on a strictly confidential basis with no promise of any views we have being taken into account. We have been pressing Decision First for permission to share them with you and our other members in the interests of transparency. However, Decision First has refused to allow this.
I have been contacted by members over recent days. It concerns me that an impression appears to have been given to suggest that the Law Society of Scotland has somehow approved or endorsed these terms and conditions. This is not the case.
Whilst we have been given the opportunity to review the Terms and Conditions on behalf of our members we cannot approve them. The Terms and Conditions represent a commercial contract between Decision First and the relevant law firm in which we would have no locus. The Society has however highlighted concerns in relation to jurisdictional and data security issues to Decision First.
We strongly advise our members to be cautious in releasing commercially sensitive and other data to Decision First without sight of the draft Terms and Conditions. Decision First has advised that the latest version of the draft Terms and Conditions will be available at the end of this week. We will publish these on our website once we are in a position to do so.
We are now issuing more regular updates on this and other conveyancing issues to those of our members who have indicated they are involved in residential property work. I would encourage those within your firms who would like to receive these updates and who do not current do so to log on to the members section of our website, tick the appropriate box and ensure they have a specific individual email address on record.
Finally, if you or colleagues have any questions about this then please contact my colleague Alison Mackay from our professional practice team by telephone 0131 476 8353 or by email alisonmackay@lawscot.org.uk
With best wishes,
Lorna Jack
Chief Executive
Law Society of Scotland
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