Austin Mitchell pleased with conveyancing plans

Press, 23 October 1984, Page 14

Austin Mitchell pleased with conveyancing plans

DIANA DEKKER London The British Labour member of Parliament, Mr Austin Mitchell, is “very pleased” ; with the recommendations of the Conservative Government’s conveyancing committee which published its first report late last month. Mr Mitchell, member of Parliament for Grimsby and a former New Zealand television interviewer, has more reason than most to be pleased. He was instrumental in forcing the Government to set up the committee with a view to passing legislation next year to end the legal fraternity’s stranglehold on conveyancing work in Britain. “My only complaints are that Fd have had more relaxed qualifications for conveyancers and I'd have had done things more quickly. It will be next year rather than this year, but the important thing is that we will get it,” he said. Mr Mitchell struck terror into the heart of the Law Society late last year, when he introduced a private member’s bill to end the solicitors’ monopoly on property conveyancing. Solicitors have, in Mr

Mitchell’s opinion, been unashamedly * feathering their nests” for far too long with exorbitant profits from conveyancing. The lawyers’. monopoly goes back to the beginning of the nineteenth century when Parliament, well stocked, as it still is, with lawyers, decided it would be unlawful for anyone other than a lawyer to draw a conveyance, which includes a transfer of registered land. “In recent years,” says the introduction to the conveyancing committee’s report, “pressure has grown to relax the restrictions. It is said that the restrictions have led to unduly high charges and are no longer necessary for consumer protection. A number of conveyancing firms, have been set up by persons who are not solicitors many of which, we are informed, employ qualified people to do that part of the work covered by section 22 of the Solicitors Act, 1984.” Mr Mitchell’s bill, the House Buyer’s Bill, sought to allow building societies, banks and licensed conveyancers to do conveyancing in addition to solicitors. It also sought to allow solicitors to advertise conveyanc-

ing services and aimed to speed up land searches by local authorities and to encourage them to computerise their registers. The Law Society immediately leapt into battle to thwart the bill. The assistance of every single solicitor is needed to lobby members of Parliament, said Mr Christopher Hewetson, the society’s president, in a -letter to solicitors. Solicitors were asked to tell their member of Parliaments of the dangers the bill posed for the public,

how it would affect their firms and the provisions oi legal services in the constitutency if it became law. Mr Hewetsbn accused Mr Mitchell and Mr David Tench, legal officer of the Consumers’ Association, of secrecy over the bill’s contents, with the result that fully informed debate had been prevented. Mr Mitchell was jubilant in mid-December last year when his bill had its second reading. Voting was 96 for and 76 against, with the support of 25 Tory members of Parliament The Government, which decided not to support the bill, announced, with little alternative, that it would introduce its own legislation to break the conveyancing monopoly. The Government announced that it would set up a special committee to consider reforms with the intention of making housebuying simpler and cheaper. The result was the conveyancing committee, and Mr Mitchell was consulted on its composition. ’ The . committee, set up in February, included representatives of banks, building societies, consumer groups, local authority associations, and solicitors. It was headed by Professor Julian Ferrand, a law commissioner. It was given the following terms of reference: 0 To consider what tests or other evidence of competence are needed for nonsolicitor conveyancers in order to provide the public with satisfactory assurance of adequate skill, how any such tests might be administered, and what other requirements should be placed on non-solicitor conveyancers to ensure adequate consumer protection. • To consider the scope for simplifying conveyancing practice and procedure, and any other matters concerning the simplification of house purchase which may be referred to the committee. The report released in September covered the first part. The report suggested tests of competence and controls on non-solicitor conveyancers which would be sufficiently stringent to keep even the Law Society fairly happy. Under the proposals, licenced conveyancers would be a quarter as qualified as solicitors over all, but equally qualified with solici- i tors over domestic convey--anting, according to! Profes-. sor Ferrand. ’

The report proposed that anyone wanting to compete with qualified solicitors on domestic conveyancing work would need an annual licence from a new council for licensed conveyancers. The council would be responsible for examining the competence of non-solicitor conveyancers, would lay down a code of conduct and ensure that licensed conveyancers had adequate insurance and a compensation fund in cases of fraud. The committee recommended that non-solicitors seeking a conveyancing licence should have to pass a written examination set by the conveyancing council. The first part would involve a general knowledge of the law similar to the British A level General Certificate of Education, and the second part would be a more detailed conveyancing paper up to the level of solicitors’ finals. Conveyancers would also have to gain two years experience of domestic conveyancing before becoming eligible for a licence. They could do this while preparing for the examinations. Candidates with at least 10 years experience of domestic conveyancing would be able to apply to the council for an oral test to determine whether they should be exempt from all or part of the written examinations. The rules would also apply to notaries public and barristers who wanted to become licensed conveyancers. After publication of the report, Professor Ferrand said that if licensed conveyancers were allowed to compete with solicitors he

believed conveyancing costs could come down 25 to 30 per cent . The threat, he said, was . already making solicitors more effiency minded and having profound effects on the profession. • Mr Mitchell also maintains there have been, be- . ginning with his House Buyer’s Bill, dramatic changes. “Already the prices of conveyancing have come down an average 25 per cent all over the country,” he said. ■■ “I have seen solicitors’ firms advertising an all-in package deal of £99 (5250) for conveyancing.” Real Estate agents had joined since the introduction of his bill to computerise all of their properties for easier access. “They are much more competitive and much better organised,” he said. Mr Mitchell said Britain was moving “very belatedly” in the direction New Zealand had taken. Home ownership in was at 60 per cent, well behind that of New Zealand. “Home ownership in this country has been almost a middle class ' monopoly. There was until recently a much higher proportion of rental accommodation and it was the middle class people who knew solicitors who bought property. Even for them house buying was difficult, but they' managed. “Now there is a vast market of working class people. It is no longer profitable to rent property. “Buying a house has been a bit like conducting an orchestra when you had to build up your own orchestra. “You had to find the estate agent to find the house, the solicitor to do the conveyancing and the bank to raise the money.” It had been a big job for people and the ideal was to fund one person who could find the house, do the conveyancing and arrange the mortgage. “We are going very slowly towards it,” he said. “What has been holding it up has been the monopoly which segregated the professions.” What was needed was a situation in which conveyancing did not provide feather-bedding for . the legal profession but where it became a service carried out as cheaply as possible. <■ However,-- said Mr Mitchell, the battles 'were . not all over yet. !? i / “There is-still a battle to be fought over the banks and building societies.” ; The Law Society, which accepts the proposal to allow non-solicitor, licensed conveyancers to Undertake house transfers, has already told the committee that Government proposals to allow conveyancing by banks and building societies would lead to the closing of solicitors’ offices, destroying the national network of legal services and depriving the public of legal choice. The society told the committee, that there was an overwhelming danger that the proposals; far from widening the choice to the public and increasing competition, would entrench the vast bulk of conveyancing with about 15 of the larger, more powerful lending institutions. / A senior Law Society council member, Mr Tony Holland, said that a national network of 7500 solicitors’ firms would be replaced by a “powerful cartel of 15 financial giants.” “Solicitors’ offices will close, contract or amalgamate, leaving large sections of the community without easy access to legal services other than conveyancing,” he said. The experiment of having licensed conveyancers would be still born if conveyancing were opened up to financial and other commercial institutions. “No solicitor or licensed conveyancer would be able to compete on equal terms with the big financial institutions,” he said. The conveyancing committee is expected to report again by the end of the year.