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Briefing Note: Special General Meeting of the Law Society to consider a Vote of No Confidence

1     Introduction

A special general meeting (SGM) of members of The Law Society (TLS) will be held on Tuesday 23 July 2024. Members must register with the TLS to attend either in person or online by 9am, on Monday 15 July.

This briefing note, published by The Property Lawyers Action Group (PLAG), shall provide first, an executive summary of key issues, secondly more detailed commentary on the background issues,  thirdly further commentary on the risks of prosecution of solicitors because of inaccurate replies in the TA6 form (TA6) and finally a conclusion.

2     Executive Summary

2.1   Members should read this report in conjunction with the statement lodged with TLS supporting the Requisition.

2.2   By the extension of ‘material information’ (MI) TLS is seeking to unnecessarily impose substantially increased criminal and civil liability on solicitors, their staff and sellers, together with increased costs. This imposition would, like other failed actions, be likely to discourage sellers from putting their property on the market. The refusal of TLS to release its ‘expert advice ‘on consumer protection legislation to its members, is frankly an affront to them, and suggests that the legal advice is unsound.

2.3   Based upon our considerable experience as practising property lawyers, only somewhere in the region of 2% of buyers pull out of deals due to legal information supplied. So, it is illogical to penalise 98% of sellers and solicitors by extending their civil and criminal liability, as well as their costs,  in an effort to reduce the 2% figure referred to above.

2.4   The TA6 is badly drafted, ambiguous and fails to provide critical protection to sellers, solicitors, and their staff.

3     Commentary on MI and the TA6

3.1   Why did the TLS not consult its members on the TA6 and MI? Sadly, TLS has allowed itself to be pressured into accepting MI by the Home Buying and Selling Council (HBSC) as is evident from its own statement dated 20th June.

3.2   The TA6 is almost identical to the ‘BASPI form’ produced by the HBSC. The BASPI is used rarely in practice. Its proponents state that the BASPI, developed by the ‘upfront information working group’ of the HBSC, is a ‘single source of truth’ dataset, designed to include all the information required on a property when it is put on the market for sale.’ The form is too long, and unrealistically expects sellers to investigate matters before providing an answer (some answers are normally disclosed by the usual conveyancing search results).

3.3   It is our view that there has been a deliberate effort from various parties to erode the long-established tried and tested concept of “buyer beware”. Instead, there would be “seller aware” with the risk shifting to a different consumer, the seller. One of the parties that has been encouraging this unwelcome transition has been the HBSC, for example by creating the BASPI. The BASPI has been replicated to a great extent in the TA6, save for two of the more absurd enquiries.

3.4   The MI guidance launched by the National Trading Standards Estate and Letting Agency Team (NTSELAT) was three years in the making. According to a reply to a Freedom of Information request, no solicitors had any input or involvement in this process, only a single unknown delegate of the Law Society.

3.5   Members of the HBSC, like the TLS, are obsessed with the end-to-end digitisation of Homebuying. There needs to be a real debate between TLS and its members over the interrelationship between legal practice and law tech.

3.6   The myth of the infallibility of computer data has been shattered by the biggest miscarriage of justice in British legal history-the Post Office scandal. Post office victims were, according to Mr Bates, giving evidence at the Inquiry, ‘drowning in data.’ The scandal shows that unless there are constant guarantees as to the veracity of computer data, and that such data is openly accessible/verifiable, then it is contrary to the public interest to cede control, or the interpretation of such data, or any other aspect of legal work such as Homebuying, to third parties, such as those in the law tech sector, without the close supervision of independent lawyers. Why is this critical need for solicitors’ dominion over homebuying to be maintained not understood by TLS?

3.7   AI involves ‘large language models’ (LLMs). There are widespread misunderstandings over the use of AI. LLMs do not function similarly to legal databases – the contents are curated/verified by solicitors. LLM-generated content is not subject to human intervention before delivery to the ‘end user.’ Solicitors, not the HBSC, must decide the extent to which digitisation supports Homebuying.

3.8   Under the rule of law, Parliament should not be mandating solicitors, as to how they practice property law.

3.9   Homebuying is a complex process, made up of many different elements. But for most solicitors, ‘process’ is professionally speaking a misnomer. The word connotes a real estate transaction, which is commoditised. Most solicitors don’t act for clients on that basis.

3.10 HBSC is trying to mimic the abandoned concept of HIPS by ‘the back door.’   HIPs did not work in the past as people didn’t want to pay lawyers upfront. The premise of ‘upfront’ information doesn’t provide an explanation of risk to the public, as to what it all means and the fantasy of the ‘perfect complete’ contract pack is also not going to happen.

3.11 The conveyancing transaction in effect is being re-engineered to fit the law tech, so the HBSC is thinking in simplistic, rigid,  ‘linear’ terms of a single buyer, a single seller, freehold property, and no chain. Hence the genesis of the Law Society’s version of a ‘single statement of truth’.

3.12 The idea that solicitors should be instructed ‘early’ in the process to avoid delays – sounds great but in reality, is naïve. There are two main reasons for this:

  • estate agents will often in practice send work to the solicitor paying the highest referral fees (some corporate agencies are geared up this way so that offers are only put forward if the buyer/seller has used one of their ‘recommended services’); and
  • people do not want to pay/instruct their conveyancer before they find a buyer just like with HIPS.
  • What are the real causes of delay?

These include:

3.13.1     HM Land Registry – cannot clear its backlog and instead focuses     on ‘vanity digitisation’ projects.

  • Inexperienced conveyancers are being put on the front lines of conveyancing, or worse still, are over-reliant on law tech to ‘pick up the pieces’ where there is insufficient staff to assist them.
  • Many conveyancers cannot deal with leaseholds, a situation made worse by the BSA.
  • Lenders prevarication
  • Speed-crushing red tape emanating from the SRA.
  • Most estates constructed within the last twenty years are subject to estate service charges meaning long delays in extracting information from third parties ‘Race to the bottom on conveyancing fees. Fixed fees are rock bottom, SRA ‘transparency’ rules are not quite so transparent – low fees are quoted, hidden by ‘added extras’ which many would consider standard as part of the conveyancing process. Shaun Jardine compiled a list of these ‘extras’ – the list currently stands at 120 ‘extras’.
  • The burdens placed on property solicitors since the stamp duty holiday has led to many senior conveyancers leaving the profession in droves. Referral fees sending the bulk of the work to conveyancing factories, who cannot cope and/or do not have sufficient expertise to deal with matters (e.g. shared ownership).
  • Underlying legal issues in conveyancing have not been fixed by legislation. Continuous pressure being placed on the government to meet housing demand has led to rampant exploitation of purchasers by many national developers. For example, LS has naively provided BSA guidance relying on developer remediation contracts (where clients will still need money to sue, and many don’t have this).

4     Increased Criminal and Civil liability for Solicitors, Employees, and  sellers  

4.1   False, misleading, or not providing information can lead to increased criminal and civil liability for solicitors, staff, and sellers, since under similar legislation, a person or body ‘owns’ information merely by passing it on.

4.2   The offence is a ‘strict liability’ one, so even ‘innocent’ mistakes are caught, with criminal convictions having horrendous consequences for individuals and firms.

4.3   TLS practice advice has confirmed similar forms produced by NAEA will increase civil liability for sellers, so it is illogical for TLS to claim otherwise for its own forms.

4.4   Badly drafted forms by not providing a full set of answer options (including ‘not known’) and leaving only a binary  ‘yes’ or ‘no’ answer increases substantially the risks of criminal and civil liability.

4.4   Critically important protective measures, and clauses accepted by the courts are completely missing from the forms and guidance published by TLS.

4.5   While TLS now seek to claim that there is no additional civil or criminal liability based on ‘expert’ advice, TLS refuses to disclose Counsel’s advice to solicitors. Many see this as illogical, as a tremendous amount of additional information is being required, so additional liability follows. It is perverse for the TLS to claim otherwise, and sadly demonstrates a complete lack of appreciation for similar legislation.

5 Conclusion:

Criminalising solicitors and their staff is highly likely to discourage solicitors undertaking residential property matters. PI premiums for residential conveyancing are already high, the new form will simply exacerbate the situation, increasing the same whilst at the same time putting smaller firms out of business and driving clients into the arms of factory outfits. This cannot be in the best interests of the consumer.

In the view of PLAG, there has been a deliberate effort to attempt to pass off mere guidance from NTSELAT as both a legal requirement and a guide to best practice for conducting property transactions. Neither of these assumptions are based on fact. Owing to TLS’s refusal to listen to the profession over the course of several months until eventually forced to do so by PLAG, PLAG has lost whatever remaining trust it previously held in TLS to adequately represent the interests of conveyancers, hence the vote of no confidence. However, it also follows that PLAG cannot trust TLS’ purported consultation, which we believe to be disingenuous. It appears virtually certain, that the 5th edition will be forced upon the profession irrespective of whatever occurs during the consultation.

It is our view that the Property Information Form must be entirely independent from the malign influence of Material Information. Irrespective of one’s own opinion on the concept, it is intended for estate agents and not for conveyancers. Indeed, there will be many transactions in which there is no estate agent involved, rendering an MI-centric form entirely farcical. Anecdotally, most agents still appear to be ignoring the guidance almost entirely, making it even more absurd that TLS is attempting to force it upon solicitors.

Dated 30.06.2024.

The Property Lawyers Action Group

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