Conveyancing solicitors on a mortgage lender’s approved panel normally act for the buyer and lender but the conveyancing system can facilitate property fraud as the solicitor involved is responsible for ensuring that money reaches the right party and that a charge is registered against the relevant property. Lending mutual Co-operative Financial Services has been urged by the Law Society to reconsider a decision to cut around 3, 600 sole practitioners from its conveyancing panel in the wake of the merger between the organisation and Britannia Building Society. The enlarged business has nine million customers, more than 12, 000 employees, 300 branches.
Co-operative Financial Services wrote to the Law Society last week to advise the organisation that it was giving a month's notice to all of the sole practitioners that they would be removed from its panel with effect form the end of September 2009. The lender said that it had been left with "no option" but to remove more than 3, 600 sole practitioners from its conveyancing panel. The move, which has drawn criticism from The Law Society, came after the Manchester-based organisation said its insurers had insisted on the move
Law Society president Robert Heslett has written back to the organisation stating that although it understood the need for the society to manage risk, he was “shocked and saddened that such a step should be taken in the depths of the most severe recession since the Second World War”. The Council of Licensed Conveyancers has also called for a meeting to discuss the situation.
The decision taken by Co-operative Financial Services will be of concern to many sole practitioner conveyancing solicitors. Conveyancing solicitors will hope that this is not the start of a trend of lenders starting to trim their panels of conveyancing solicitors.