Are we pricing ourselves out?

Discussions over the question of a standard retainer meander on between the Law Society and the team representing the interests of the top six lenders.

We are told that agreement has almost been reached which may mean an end to silly instructions. We are promised again that lenders will be forced to start paying for the legal services that conveyancers currently supply to them free of charge.

A figure of £100 has been mentioned around the market for some time as the likely figure that will be suggested to the Council of Mortgage Lenders and its members.

One thing that most lenders have learned over the past five years is that it can pay to have a super panel system of three or four firms which are controlled by the lender client in ways that were unimaginable at the start of this decade.

If I was in charge of any lender, irrespective of size, and told I now had to start paying for legal services I currently enjoyed for free, I know I would seek value for money and would want to control the service provider.

Despite promises made by a variety of people in the Law Society and on its fringes, few seem to have appreciated the fact that a regulation which means lenders have to pay would cost millions.

If everybody thinks an open panel system would continue under those circumstances, then good luck to them.

In fact the future for conveyancing may be so different as to make even the concept of super panels seem like a cosy arrangement.

Some of us older hands will recall discussions in the 1970s about title insurance. Everybody was told how lawyers in some US states had never been involved in conveyancing but the transaction had been insured. But title insurance was not right for the UK then.

Now the story is different. Now a high percentage of titles is computerised by the Land Registry to whom we have on-line communication. Now we can look at the experiment running in the Canadian system for the past two years with much success. The state of Ontario had remarkable similarities with the UK: an overcrowded legal profession; high claims on a self-insured indemnity fund; little business; pressure on conveyancing fees and so on. Major Canadian lenders switched to a title insured product as an alternative to conveyancing solicitors handling the remortgage side of their business.

In Canada today, a member of the public can walk into a bank, sign up for a remortgage and have it completed within five days. The lender redeems the existing loan and is fully protected by insurance.

We talk about being in a service industry but it seems to me to me that when it comes to conveyancing we often do not offer very much by way of service either to the individual client or the institutional client.

If lenders introduce title insurance into the UK as an alternative to using solicitors, who can blame them? An end to using solicitors would be a double bonus. Continued talk about the imposition of fees upon lenders can do no more than accelerate the inevitable.