Scottish solicitors split over separate representation


Survey suggests small majority opposes conflict rule change

Whichever way a decision goes on the future of separate representation for property buyers and lenders in Scotland next month, it is likely to prove unpopular with a large number of solicitors, a survey has revealed.

Law Society of Scotland members will be polled on a rule change at a special general meeting on 23 September after deciding in March to put it to a vote. If the change is approved, the current exception to the conflict of interest rules allowing joint representation will be removed.

A pre-vote survey found opinions for and against altering the rules which allow the same solicitor to act for both the buyer and the lender were evenly divided, with 49% in favour and 51% against the proposed rule as drafted in a consultation document.

The survey received 279 responses. It found institutions – which included the Council of Mortgage Lenders (CML), Which? and banks and building societies – tended to favour the rule change more than individual solicitors. Among individuals the breakdown was that 47.5% were in favour and 52.5% against, whereas 59.1% of organisations supported the change and 40.9% were against.

The society’s vice president, Alistair Morris, observed that support for a change to the status quo had grown in recent years and said it was an “essential debate”. It was important that home buyers were protected “and that solicitors are not compromised in representing their clients”.

He said the CML had responded to a consultation saying that it was opposed to the change, “although some of their members are already practising separate representation”. In March the CML accused Scottish solicitors of being ‘protectionist’ in seeking to require separate representation.

Mr Morris said Which? responded that it believed consumers should be better informed on the issue and there should be further discussion over whether solicitors should only be able to act for banks on an ‘execution only’ basis, in which they do not provide legal advice to the bank.

He continued: “We are well aware of the fears that have been raised around potential for delay or possible increased costs for the borrower. While these issues have to be considered, we have calculated that any potential cost increase would be a small percentage at around 0.1% of the overall price of buying a new home – if indeed the lenders do decide to pass on costs to their customers.”

He noted that in the Republic of Ireland separate representation was mandatory and banks were legally prohibited from passing on their legal fees to purchasers.

 




Leave a Comment

By clicking Submit you consent to Legal Futures storing your personal data and confirm you have read our Privacy Policy and section 5 of our Terms & Conditions which deals with user-generated content. All comments will be moderated before posting.

Required fields are marked *
Email address will not be published.

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Blog


Five key issues to consider when adopting an AI-based legal tech

As generative AI starts to play a bigger role in our working lives, there are some key issues that your law firm needs to consider when adopting an AI-based legal tech.


Bulk litigation – not always working in consumers interests

For consumers to get the benefit, bulk litigation needs to be done well, and we are increasingly concerned that there are significant problems in some areas of this market.


ABSs, cost and audits – fixing regulation after Axiom Ince

A feature of law firm collapses and frauds has sometimes been the over-concentration of power in outdated and overburdened systems of control.


Loading animation