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Letter: challenging factors' rates
12 Jun 19
Should higher charges close to settlement be challenged as duress?
A well known Scottish property factor has changed its apportionment fee structure, with inbuilt hazards for solicitors.
Historically, this factor charges £75. Now, if apportionment is requested within 14 days of settlement the fee will be £150. In the covering letter the factor “trusts that the solicitor agrees” on behalf of his/her client to this charge. The danger is that the solicitor does agree, expressly or inferred by payment, without indicating duress, and the client will be stuck with that charge. Without specific instruction, the solicitor is then open to a claim.
The other hazard is that the solicitor is not able (as missives are not concluded), or otherwise fails, to request apportionment on time, costing the client a further £75 and spawning another complaint.
With three clients currently affected, I telephoned another well known Scottish factor, to be told that apportionment normally takes 15-20 minutes, and 70-75% of instructions arrive within 14 days of settlement. Given the usually late conclusion of missives, this percentage is no surprise.
Basic arithmetic suggests the first factor is feeing at the rate of £450-£600 per hour in three quarters of instructions. I believe this level is unwarranted, should be challenged, and (subject to instruction), the augmented charge paid under duress.
Unresolved complaints regarding factoring matters can be made to the Housing & Property Chamber, First-tier Tribunal for Scotland.
Ed Wright, Black & McCorry, Livingston