The head of the Council of Mortgage Lenders (CML) has warned that lenders will proceed with the controversial Standard Mortgage Instructions (SMIs) for conveyancing transactions with or without the support of the Law Society.
CML director-general Michael Coogan issued the threat last week at Eversheds' annual seminar for lenders in London, where he accused the Law Society of doing “its best to discourage SMIs”.
CML and the Law Society have been trying to forge a set of SMIs to standardise instructions between solicitors and vendors for two years.
But a final agreement has suffered a series of setbacks.
In April, the Office of Fair Trading threatened to scupper a draft agreement because of the fixed-price element of SMIs.
And, in July, indemnity insurance specialist and Reynolds Porter Chamberlain partner Clare Jaycock told the Solicitors Indemnity Fund that SMIs shifted the burden of liability on to solicitors and were a bad deal.
Coogan said that CML would await the outcome of the Law Society's consultation on separate representation before making a final decision on how to proceed with SMIs.
But he warned: “Having taken so much time developing standard instructions, which we as lenders believe should become the norm in the market, they will have to be launched in due course.”
Coogan said that standard instructions between solicitors and lenders would end confusion over who had responsibility for what, leading to a drop in the number of negligence court cases. And he was confident that solicitors would sign up to SMIs even if their own professional body did not.
But the Law Society said that despite Coogan's warning, agreement over SMIs was close.
The Law Society's land law and succession committee secretary Neil Gower said that the outlook for SMIs was far from bleak.
The Law Society has just sent CML its latest SMI amendments reflecting recent case law and believes if these are agreeable the way is open for the scheme to proceed.
“The Law Society is very supportive of the concept of SMIs,” said Gower.
