The Law Society has introduced a new rule on conflicts of interest during conveyancing transactions – ignoring calls by the Council of Mortgage Lenders (CML) that this would push up house prices.
The Law Society Council voted last week to introduce a rule clarifying the responsibilities of solicitors who jointly represent both the home buyer and the mortgage lender in a house purchase.
The move follows claims by conveyancing solicitors that they were being asked by mortgage lenders to perform “unreasonable” duties and were incurring liability for professional indemnity as a result.
The CML argued that the proposed Law Society rule would increase the cost of buying a home, since stricter conflict of interest rules would mean two solicitors doing what is currently undertaken by one.
The CML last week issued a press release accusing the Law Society of proposing the rule change for reasons of “self-interest rather than the public good”.
It claimed the change would benefit lawyers because it would either reduce the obligations solicitors owed to clients or increase solicitors' fees.
Marsons senior partner Brian Marson – an advocate of low-cost volume conveyancing – slammed the new rule as being like “trying to put out a forest fire with a bucket of water”. He added that it would slow down house sales even further.
Law Society president Michael Mathews said the rule clarification would “provide a proper balance between the interests of home buyers and the commercial interests of lenders”.