It believes intensive regulation is far better than the principles-based approach which the Solicitors Regulatory Alliance (SRA) has recently suggested. The CML believes that the SRA’s approach will fail to address lenders’ concerns over fraud in this area.

In the latest issue of its News & Views, it expressed concern about the amount of fraud involving solicitors and the scale of professional negligence that has emerged in recent years.

The CML said that if confidence in the regulation of solicitors is not quickly restored, lenders are likely to scale down their existing panels and not accept new firms on to them until they have a proven track record.