Some of the arguments against Seperate Representation appear to be rather late in the day given the detailed analysis that was undertaken in respect of the issue by the Law Society working party on Sep Rep, its excellent subsequent report and a previous SGM where there was overwhelming support for the motion on Sep Rep. Following up on Ken Swinton’s excellent article yesterday on “The Conflict of Interest is Real” I would like to remind those who have been looking at this issue of the true position here by making a number of points.
1. Level Playing Field and Competition
Sep Rep was the brainchild of Lenders. There are currently many one and two Partner Firms up and down the land who are not on lender panels because they are too small. They have had Sep Rep imposed on them by Lenders without any choice in the matter. The move to Sep Rep will provide a truly level playing field and competition.
2. Small firms disadvantaged.
Many of these one and two Partner Firms are still in business but have had to reach an agreement with another Solicitor who is on the lender’s panel for the other solicitor to represent the Lender. However it is has made a difference to their bottom line as they are effectively sharing their fees with another Solicitor.
3. Guilty without a Hearing
There are also Solicitors who have been removed from Lender’s panels because a client of theirs has been dishonest or fraudulent. My advice has been sought as an LDU Director on two occasions about this and on neither occasion was it possible to persuade the Lender to the effect that the Solicitor was innocently caught up in this and that he should be put back on the panel after removal. In fact one lender did not reply at all and the other said that they were under no obligation to give any reason for taking anyone off the panel.
4. Off one panel and off the lot.
In many of the Lender’s reapplication forms completed each year or so they ask whether you have been ever removed from any other lender’s panel. If you have been removed unjustly you are likely to end up being removed from all of these panels. This is grossly unfair. The truth is there is not a Firm amongst us large or small which is not vulnerable and powerless to this kind of lender behaviour.
At the February meeting of the new Glasgow Conveyancers Forum, before a debate on Sep Rep we heard from John Logan of Stewart Title Limited who indicated that Title Indemnity Insurance could plug the gap if there was a move to Sep Rep. At that time the premium indicated for a £100,000.00 house was around £50.00 and for a house up to £200,000.00 around £70.00. The average house price is within these ranges so the costs are clearly not the issue opponents are suggesting.
One and two Partner Firms up and down the land have coped with separate Solicitors acting for Lenders and all appear to be managing without complaining of “chaos” which our opponents seem to suggest will occur. Particularly if the insurance indemnity route is taken then we see little cause for delay. Whatever route the profession is well able to adapt to this change and make Sep Rep work in practice. Seminars on “SEPREP - making it work” will follow if the motion is carried.
7. Last chance
This is the single most important vote that conveyancers are likely to face for many years. The one thing I can predict is that if Sep Rep does not win the day, then CML will do nothing. Our entire negotiating position will be gone. I urge Solicitors not to lose the sight of that.
Ian C. Ferguson
Council Member of Scottish Law Agents Society and Partner with Mitchells Roberton, Glasgow..