'Conveyancers will get it in the neck if this goes ahead'
19 March 1996
LAST summer a group of solicitors in Burnley got together to thrash out a set of guideline conveyancing fees.
They are now being investigated by the Office of Fair Trading for alleged fee fixing, although Burnley and Pendle Law Society is confident it has done nothing wrong. It was, after all, following the Law Society's own advice when it called its members together to produce the fee guidelines.
Now Martin Mears' and Robert Sayer's bid to solve the conveyancing crisis at a stroke by using the indemnity fund to secure a hike in fees has failed, less ambitious schemes to tackle the problem are back on the agenda.
That, at least, is the view of Richard Hegarty, chair of the Law Society's property and commercial services committee.
The committee was sidelined during Sayer's energetic, but ultimately fruitless, campaign to deprive cut-price conveyancers of indemnity cover.
Now it is back in the driving seat. While Sayer has been forced to withdraw his consultation paper on conveyancing, the committee was able to press on and issued its own document last Friday.
Proposals to introduce nationwide guideline fees are among the committee's suggestions.
"We were going to put out a consultation paper on recommended fees in the summer," said Hegarty.
"But we pulled it because we felt people would confuse it with John Edge's campaign for a compulsory scale."
In fact several local law societies are already operating a guideline fees system.
Burnley and Pendle Law Society honorary secretary Roger Baldwin stressed that unprofitable fees were likely to mean an unprofessional service for the area's clients.
The guideline fees agreed by the society would help provide both the solicitors and the clients with a useful benchmark.
For the sale of a £60,000 house, for example, the society proposes a £375 fee plus disbursements and VAT.
"I would hope that firms are sticking to it, but it is difficult to tell," said Baldwin.
Critics of the recommended fee option being proposed by Hegarty's committee will say it is typical of the toothless middle-of-the road solutions.
The advantage of the plan, however, is that it may be feasible.
When Sayer was forced to announce the abandonment of his plan at the Law Society Council meeting earlier this month, council members lined up to have a dig at him.
One demanded to know how much Sayer's failed initiative had cost the profession, another sought an assurance that efficient firms which charged low fees would not be punished.
But one of the few speakers to support Sayer did stress that at least the profession must now appreciate the difficulty of finding a solution to the problem.
There is no cavalry just around the corner about to come to the aid of the besieged conveyancers. And the massive support attracted by Bournemouth solicitor John Edge's campaign for a fixed scale illustrates just how many solicitors believed that there was last summer.
For his part, Sayer has promised to continue his search for a solution to a problem. But in the short term he has embarked on a new project.
The Solicitors Indemnity Fund is working on a new risk banding system which would boost insurance premiums for firms which undertake high-risk work such as conveyancing.
Forty of the highest-risk firms will face a maximum increase in their premiums of 200 per cent
"Conveyancing firms are going to get it in the neck if this goes ahead," Sayer predicted.
Now his indemnity insurance working party is looking into the possibility of a "pay as you convey" insurance scheme so firms can spread the cost of their insurance throughout the year.
It is a hark back to the original Mears-Sayer election manifesto, in which they proposed to transfer the cost of indemnity insurance in conveyancing transactions to a "disbursement directly levied on the client".
It is early days, but Sayer hopes a "pay as you convey" scheme will hammer home to firms the need to charge realistic rates.
Meanwhile, Bournemouth solicitor John Edge is showing signs of impatience. He was unavailable for comment. But he told last week's Law Society Gazette that Sayer's plan was "only tinkering with the problem".
Edge's initiative has collected a fighting fund of at least £19,000.
Beleaguered conveyancing solicitors up and down the country are no doubt hoping that Edge has a solution up his sleeve.
Related BriefingsSign up for briefing alerts
Related CPD/EventsSign up for CPD/Events alerts
MBL Seminars Limited