Law Society ‘in showdown’ with Abbey over 7000 sacked solicitors move

The Law Society of Scotland are all a fluster over the move by Abbey which sacked up to 7000 solicitors across the UK from their approved conveyancing panel of legal firms.

Desperate to protect what little business the legal profession has left, the Law Society has issued the following Press Release, which their in-house magazine “JournalOnline” reports as “Society in showdown at the Abbey” (I can hear the banks quaking in their boots at the O.K. Corral right now – Ed)

Law Society of Scotland to protest against Abbey decision to remove solicitors from approved panels

Abbey is to contact 7,000 UK conveyancing solicitors with information on how they can be reinstated to its approved panels if they can make a case for ongoing business with the bank.

It follows strong protest from the Law Society of Scotland and The Law Society of England and Wales against an Abbey decision to strike the 7,000 solicitors from across the UK from its approved panels without any prior consultation or warning for firms.

The move appears to have particularly impacted on smaller firms, and the Society has expressed concern about the numbers of Scottish solicitors affected as many, especially those practising in rural areas, operate in small partnerships or as sole practitioners.

In an attempt to rationalise the combined Abbey/ Alliance & Leicester panel, the bank had recently written to the 7,000 solicitors to inform them that they had been removed because they had handled a low number of Abbey lending transactions during the past year. Panel members are instructed by Abbey to put mortgages in place, generally the firm already acting for the purchaser.

Janette Wilson, convenor of the Law Society of Scotland conveyancing committee, said: “Firms removed from the panel could be facing a significant loss of business and we believe that this move reduces consumer choice and may be anti-competitive. This is also highly likely to impact on clients as the solicitor’s fee for putting the mortgage in place is normally included in the fee for the purchase. If additional solicitors have to be instructed, buyers will be charged another fee.

“We remain very concerned about this and will be writing to Abbey to express our strong concerns. We are also planning to join LSEW at a meeting with the bank and are urging our members to contact the Society if they have been removed from Abbey National’s panel as well as contacting the bank directly.

“We want to ascertain the impact of this on Scottish conveyancers who have already been hard hit by the serious downturn in the property market.

Solicitors with any queries should contact John Scott in professional practice. johnscott@lawscot.org.uk

ENDS 27 APRIL 2009

Law Society of Scotland fumes over Abbey ditching 7000 panel solicitors in cost cutting move

The decline in the housing market has hit the legal profession in many ways, but now there is a double blow as Abbey, the mortgage lender, has dumped some 7000 solicitors across the UK including Scotland from their conveyancing business.

Letters received by solicitors, reports the BBC went something like this : "Given the low volume of transactions dealt with by your firm during the past 12 months, I regret to inform you that your panel appointment has been revoked with immediate effect"

The Law Society of Scotland claims it will damage the consumer, damage home buyers, and damage competition in the market, but in truth, the solicitors were sacked by Abbey for simply not doing enough work for the money … (even banks have to cut costs in a recession to survive, so maybe the solicitors should have charged less to stay on the panel ? – Ed)

You can read the Journal Online’s version of the story with some desperate sounding quotes from Law Society officials HERE

BBC News reports :

Abbey in snub to 7,000 solicitors

Abbey has told 7,000 local solicitors it will no longer let them handle the bank's side of the conveyancing process when they act for house buyers.

The Law Society has protested to the bank, describing its move as "grave", and is in talks with Abbey.

It means house buyers will have to pay the cost of an extra set of solicitors to look after the lender's interest.

The bank says the solicitors have not been doing enough work for it during the past 12 months.

The decision to ditch the firms from the bank's "panel" of approved solicitors came out of the blue last week.

"Given the low volume of transactions dealt with by your firm during the past 12 months, I regret to inform you that your panel appointment has been revoked with immediate effect," said an Abbey letter to one firm of solicitors in Fleetwood, Lancashire.

Extra costs

Normally, solicitors on the approved panel of any lender would act not only for the buyer who was taking the mortgage, but would be relied upon by the lender to look after its interests in the deal as well.

That would mean ensuring the mortgage money was passed to the seller or their solicitor, and ensuring that the bank's mortgage was registered as a charge on the property at the Land Registry.

If a buyer now chooses a solicitor who is not on Abbey's panel, then the bank will insist on another firm of lawyers being involved just to look after its side of the paperwork, with the extra costs being paid for by the borrower.

That could add an extra £200 to £250 to the legal costs involved.

Worried

The Law Society is trying to persuade the bank, one of the UK's biggest mortgage lenders, to change its mind.

The Society's president, Paul Marsh, said neither the Council of Mortgage Lenders nor the Building Society's Association was aware of Abbey's decision before it was announced.

"I want to assure all members of the grave importance that we attach to this matter and the actions of the Abbey National," he wrote in a letter to solicitors.

The Society said it was particularly worried about the impact on the business of small firms.

"We have written to a number of firms that have undertaken few or no transactions with us over the past year to advise them that we will be removing them from our panel," said an Abbey spokesman.

"We have put in place a process to deal with requests for reinstatement and each request will be evaluated on its merits," he added.

The slump in the property market, which has seen sales slump by more than half in the past year, has already led to hundreds of solicitors being made redundant by the conveyancing departments of some of the UK's biggest solicitors' firms.