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CML and Scottish lawyers clash on ‘sep rep’

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  • 19/07/2013
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CML and Scottish lawyers clash on ‘sep rep’
Lenders have accused Scottish solicitors of misrepresenting the trade body's views on plans to introduce separate legal representation.

The  Law Society of Scotland is currently consulting on proposals to make borrowers and lenders use different solicitors during the conveyancing process.

In its response to the consultation, the Council of Mortgage Lenders said the document had misrepresented the views of its former director general, Michael Coogan, when it quoted a speech he made in 2010 apparently in favour of the move.

The CML stated: “In the quote attributed to Mr Coogan in the consultation a key sentence has been missed out at the end of the opening paragraph compared to what was actually said in the speech.

“The sentence [was], ‘Let me say at once that members’ views are mixed about the concept, much as I would expect would be the case amongst the profession as a whole.’

“In addition the quote about separate representation has been taken selectively from a major speech delivered to the Council of the Law Society in England and Wales covering a range of issues.”

While the CML has previously made its opposition to separate representation clear, this is the most detailed attack it has published so far.

Supporters of ‘sep rep’ say the move will help borrowers by removing the potential for conflicts of interest.

However, in its response, the lenders’ body argued solicitors were pursuing the move because of increased negligence claims against them: “We do not believe that these claims have been brought about because of conflicts of interest but rather by failure on the part of solicitors to disclose matters to lenders in terms of the Handbook.”

A failure to disclose back-to-back transactions where the proprietor had owned the property for less than six months was one area in which negligence claims had increased, it added.

Law Society of Scotland Property Law Committee convener Ross Mackay said he did not think the society had been overly selective: “The full speech is available on the Law Society’s website and supports that the quote was used in context. It was quite clear in the introductory text of the Law Society consultation that in his 2010 speech, Michael Coogan thought separate representation had become an issue and that he considered it was time to seriously consider whether there was a case for change.

“There has been ongoing debate since – and it shouldn’t be ignored that some of CML’s own members, which are the big banks and building societies, are currently practising separate representation.

“Solicitors who are in favour of change are genuinely concerned that they can no longer represent both parties fairly because of the substantial changes in the housing market and that in the long term, mandatory separate representation will be better for their clients – whether buyer or lender.”

The society had received more than 100 responses so far, he added.

 

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