Solicitors voted earlier this year for the principle of changing the current practice whereby a solicitor can represent both the buyer and the lender. They also agreed that the Law Society should bring forward a specific change to the solicitor practice rules to require mandatory separate representation.
A draft rule change will now be brought to the Society's SGM on 23 September. It follows an extensive consultation over the summer when the Society engaged with solicitors, mortgage lenders and bodies representing consumers. That consultation highlighted differing views, even amongst solicitors, over whether the practice rules should be changed.
Scottish solicitors will now be asked to decide if a proposed rule change, which was extensively revised following the consultation, adequately deals with issues raised in a Law Society working party report and in the responses to its consultation on separate representation.
They will also be asked if the rule change should now go to the Society’s Regulatory Committee, which must formally approve such a rule change, for further consideration.
‘The discussions we have had with members and the responses to our consultation have revealed the strength of feeling within the profession, whether they are for or against the proposed rule change, and have highlighted the sensitivities and complexities of such a proposed change,’ said Bruce Beveridge, President of the Law Society Scotland.
‘That’s why it’s so important at this stage that our members make sure they continue to be part of the debate and ensure they have their say at this year’s meeting. For most of us, buying a home is the biggest purchase we will ever make and it's essential that people get the legal advice they need, that their interests are protected and that solicitors are not compromised in representing their clients,’ he explained.
‘The issues around separate representation have been raised by solicitors who are concerned about the requirements placed on them by the banks and building societies, and which they believe are increasingly onerous and can compromise the relationship that they have with their buyer client,’ he pointed out.
‘Home buyers are generally unaware that their solicitor also has to provide specific legal advice to the lender. As a result of increasingly onerous conditions introduced by lenders, a significant section of the profession believes there is an increased risk of conflict of interest between the buyer and the lender and that the current exception should be removed to provide clarity and ensure that both clients receive independent advice,’ he added.
The Regulatory Committee will consider the outcome of the meeting vote in addition to other factors highlighted during the consultation period and the meeting debate before making a final decision.
‘We want to consider the advantages and the disadvantages that the rule change would bring before we make any final decision. It’s clear that the current situation...
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