HSBC has set up a conveyancing panel containing only 43 law firms for the whole of the UK and there is unconfirmed information that only 4 firms will be allocated to Scotland. We have received other unconfirmed information that another major lender is about to follow suit. This, of course, has been widely predicted since other lenders started down the same road last year but then seemed to think again when challenged.
There might be an argument against this policy in respect that it artificially restricts the consumer's freedom of choice in the appointment of a solicitor by making the solicitor of his first choice more expensive by virtue of not being on the lender's panel.
More practicaly, however, the exclusion of the High Street solicitor obstructs the public policy of prevention of money laundering because the solicitor's personal knowledge of his client is the best possible defence againt the identity deception which enables money laundering to be effected. The commoditisation of conveyancing services around a small number of big players seems likely to impersonalise the operation and to promote the opportunity for mortgage fraud. There will. for example, in many cases be no opportunity for face to face meeting between client and solicitor and a clever villain with resources can easily provide all the passports, driving licences and utility statements that his purposes require. However, once that sort of faceless dealing becomes acceptable, it may well become also the norm because of the immediate advantages of speed and economy. Also, even when there are no villains involved, one has to consider how many problem files achieved that status in conjunction with and possibly because of there having been no or insufficient personal contact with the client for all necessary issues to be addressed.
It seems ironic that, just as we are waking up to the conclusion that the near (hopefully) destruction of the international economy was brought about at least in part by allowing banks to become "too big to fail", a small number of big players in the mortgage market are able to use their domination of that market to implement a policy which restricts choice in the market place, promotes money laundering and drives down the standards to which customers have become accustomed. The previous placing of loans, regardless of toxicity, to meet targets and fund bonuses may come to be replaced by the throughput of conveyancing business, regardless of clients' and the public interests, again to boost profit margins and bonuses - two huge outlays which the client market has not previously required to fund.
These events turn our minds again to the measures that may be required to prevent the suppliers of mortgage funds from having a virtual power of appointment of solicitors up and down the country.