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CML voices concern over separate representation move

13 July 2012

Additional cost and delay to borrowers is likely to result from any requirement that separate firms of solicitors act for borrowers and lenders in mortgage transactions, according to the Council of Mortgage Lenders.

The CML has responded to a move by the Law Society of Scotland to set up a working party to take forward the proposal, which is supported by a growing number of solicitors. It was discussed at the Society's recent AGM, where speakers made points relating to the growing imbalance of power in favour of lenders and the increasing risk to solicitors from mortgage fraud.

In its latest fortnightly e-newsletter, the CML says that while it has recently issued new instructions (covering England & Wales) for cases of separate representation, "It is important to remember, however, that in the overwhelming majority of transactions the interests of lenders and borrowers are aligned, so the same conveyancer can act for both." It acknowledges the changes in lender practice – especially restrictions on which solicitor firms are approved to act for them – that have made separate representation more likely, but believes this should still only occur in a "small number of cases".

The CML adds: "We are concerned, however, about the recent decision by the Law Society of Scotland to consider moving to compulsory separate conveyancing representation for lenders and buyers in every transaction. In our view, separate representation is only necessary for the kinds of reasons cited above, or in cases where the buyer’s and lender’s choice of conveyancer differs.

"As in the rest of the UK, we favour joint representation wherever possible. It is cheaper and more efficient for the lender and buyer, and enables transactions to be completed as quickly and smoothly as possible. Joint representation therefore remains the best option for lenders and borrowers in the overwhelming majority of cases."

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Campbell Read

Sunday July 15, 2012, 16:07

If CML don't want separate representation then they must call their members into line. Restricted conveyancing panels threaten the survival of many law firms and are at heart anti-competitive. I would not welcome the introduction of compulsory separate representation but I think it is a necessary evil to prevent lenders from arbitrarily destroying large sections of our profession.