Solicitors to challenge cut-price conveyancing
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Legal Affairs Correspondent
The Law Society has been given the go-ahead to try to ban cut-price conveyancing by exploiting a loophole in the law.
A scheme devised by the society's president, Martin Mears, and his deputy, Robert Sayer, would take away insurance from any firm which undercuts recommended fee levels for buying and selling a home.
Members of the society's ruling council will meet this morning to decide their next step.
Elected last year on a commitment to increase the income of high street solicitors, the two had planned to introduce minimum fees which would have more than doubled average conveyancing costs to around pounds 700. Such is the competition for work that some firms are offering conveyancing for under pounds 200, which, Mr Mears argues, must mean they are cutting corners, and risking claims for mistakes.
Under the 1974 Solicitors' Act, which governs the profession, any restrictions imposed on prices have to be approved by the Master of the Rolls, Sir Thomas Bingham, as being in the public interest. Under threat of breaching the law, the society's last ruling council meeting in December decided to seek counsel's opinion about a list of possible ways to stamp out cut- price conveyancing.
David Pannick, QC, advised: "The Law Society would be acting for a proper purpose under [the Act] if it were to decide that low-cost conveyancing is responsible for a disproportionate number of claims on the indemnity fund, and if it were to decide that the best way of maintaining fair, efficient and and actuarily sound arrangements is to require that such low-cost conveyancing should be the subject of separate indemnity rules ... requiring solicitors to take out [other] insurance."
But he said the society would need more evidence than it had produced so far that there was a clear correlation between the number of claims on the indemnity fund and low fees.
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