The HSBC's recently-announced reduction of its Conveyancing Panel has stripped back the group from one comprising the majority of Solicitors and Licensed Conveyancers firms (many thousands of firms), to only 43 members.
Composition of the HSBC Conveyancing Panel
The panel of 43 law firms is comprised of 39 solicitors practices and 4 licensed Conveyancers - one of which is 'Countrywide Property Services' who will both manage the panel on behalf of HSBC and serve as a member of the panel also.
The cut has been widely reported in the trade and national press and is seen as a highly controversial move on the part of the HSBC, provoking a tidal wave of questions and concerns from home buyers throughout the UK.
Solicitors, The Law Society and the Government. . . .
Understandably, the Law Society has been faced with enormous pressure from the HSBC's relegated ex-panel members - being essentially the majority of the profession.
Losing membership to the HSBC's Conveyancing Panel is a blow to those firms struggling to operate in the decimated property sector, who now look to the Law Society to protect their interests, and reverse this trend before other lenders follow suit.
The Law Society has written to the firms it regulates about “the detriment that is being caused by HSBC’s high handed and arrogant decision” to cut its panel back to just 43 firms.
Subsequently, the Law Society's president, John Wotton, met with Business Secretary Vince Cable to discuss its concerns over the impact of the HSBC Conveyancing Panel on both Solicitors and Consumers.
Key Points in then Law Society's statement 'HSBC Bank PLC - panel management arrangements'
Following the meeting Desmond Hudson, Chief Executive of the Law Society, wrote to all members.
Excerpting the letter, the Law Society:
- does not agree with the HSBC's position that Countrywide maintaining the dual position of panel manager and panel member is not a conflict of interest.
- stated that none of its fund will be placed with any member of the HSBC group.
- will be contacting the CML, FSA and National Fraud Authority to raise its concerns about the detriment caused by the HSBC's decision
- is urging all Solicitors to lobby their MPs
- is considering taking a small stake in the HSBC to provide it with a suitable channel as a shareholder to press its concerns.
Examples of where the HSBC's Restricted Conveyancing Panel have adversely affected client freedom
It has been suggested that the Law Society is bound to protect the interests of its Solicitor members, but such a bias needn't be against the interests of clients. By encouraging a more open HSBC Conveyancing Panel structure, the Law Society would be unambiguously promoting more choice for clients.
Furthermore, having recently awarded over 1, 000 firms the coveted 'Conveyancing Quality Scheme' or CQS status (a pre-requisite for HSBC Conveyancing Panel membership), it is under huge pressure to fight the corner of the other CQS accredited firms (the overwhelming majority) that have been axed from the panel.
Is any of this of interest to Consumers?
It isn’t just Solicitors and their Regulatory body raising the alarm.
Writing for the Law Society Gazette, Johnathan Smithers says of the HSBC’s Conveyancing Panel that it “raises deep concerns for Conveyancing Solicitors and a wider issue for the public, raising serious questions over consumer choice”
Consumer advice organisation Which? has joined the fray, stating that they are “raising our concerns about transparency, consumer choice and competition with HSBC”
But should consumers be concerned or is all of the much reported controversy just an excuse for another round of ‘Bank Bashing’?
It is early days, and unless HSBC and Countrywide Conveyancing back down soon, the debate will almost certainly rage throughout 2012.
Your choice of Conveyancing Solicitor, but at what cost?
For now the HSBC have stated that consumers are at liberty to use their own Solicitors but in doing so they will have to pay a fee of £192 to the HSBC Conveyancing Panel to cover legal costs.
Fees for the Conveyancing service are set out on the HSBC's website.
It is not possible to determine whether there are any additional fees set out in the panel's Terms of Engagement, so it is not possible to fully comment on the competitiveness of their offering at this stage, nor how much extra clients may be expected to pay on top of the initially estimated bill.
Home buyers and sellers should be aware of these issues, and determine for themselves whether their move may be affected by the additional costs, confusion and controversy surrounding the new HSBC Conveyancing Panel.